EXECUTION VERSION
FIFTH AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment"), dated as of December 31, 1999, is entered into by and among:
(1) BELL MICROPRODUCTS INC., a California corporation
("Borrower");
(2) Each of the financial institutions listed in Schedule I to
the Restated Credit Agreement referred to in Recital A below (the
"Banks");
(3) CALIFORNIA BANK & TRUST, a California banking corporation,
as administrative agent for the Banks (in such capacity,
"Administrative Agent"); and
(4) UNION BANK OF CALIFORNIA, N.A., a national banking
association, as collateral agent for the Banks (in such capacity,
"Collateral Agent").
RECITALS
A. Borrower, the Banks, Administrative Agent and Collateral Agent are
parties to a Third Amended and Restated Credit Agreement dated as of November
12, 1998, as amended by (i) that certain First Amendment to Third Amended and
Restated Credit Agreement dated as of May 13, 1999, (ii) that certain Second
Amendment to Third Amended and Restated Credit Agreement dated as of July 21,
1999, (iii) that certain Third Amendment to Third Amended and Restated Credit
Agreement dated as of October 15, 1999 and (iv) that certain Fourth Amendment to
Third Amended and Restated Credit Agreement dated as of December 8, 1999 (as
amended, the "Restated Credit Agreement").
B. Borrower has requested the Banks, Administrative Agent and
Collateral Agent to amend the Restated Credit Agreement in certain respects.
C. The Banks, Administrative Agent and Collateral Agent are willing so
to amend the Restated Credit Agreement upon the terms and subject to the
conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, the Banks, Administrative Agent and Collateral Agent
hereby agree as follows:
1. Definitions, Interpretation. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Restated Credit Agreement, as
amended by this Amendment. The rules of construction set forth
1
in Section I of the Restated Credit Agreement shall, to the extent not
inconsistent with the terms of this Amendment, apply to this Amendment and are
hereby incorporated by reference.
2. Amendment to Credit Agreement. Subject to the conditions set forth
in paragraph 4 below, the Restated Credit Agreement is hereby amended so as to
incorporate all of the changes set forth in the marked version of the Restated
Credit Agreement attached hereto as Attachment A.
3. Representations and Warranties. Borrower hereby represents and
warrants to Administrative Agent, Collateral Agent and the Banks that, on the
date of this Amendment and after giving effect to the amendment set forth in
paragraph 2 above, the following are and shall be true and correct on the
Effective Date (as defined below):
(a) The representations and warranties set forth in Paragraph
4.01 of the Restated Credit Agreement are true and correct in all
material respects;
(b) No Default or Event of Default has occurred and is
continuing; and
(c) Each of the Credit Documents is in full force and effect.
4. Effective Date. The amendment to the Restated Credit Agreement
effected by paragraph 2 above shall become effective on December 31, 1999 (the
"Effective Date"), subject to receipt by the Banks, Administrative Agent and
Collateral Agent on or prior to the Effective Date of the following, each in
form and substance satisfactory to the Banks, Administrative Agent, Collateral
Agent and their respective counsel:
(a) This Amendment duly executed by Borrower, the Banks,
Administrative Agent and Collateral Agent;
(b) A letter in the form of Attachment B hereto appropriately
completed, dated the Effective Date and duly executed by each
Guarantor;
(c) A Certificate of the Secretary or an Assistant Secretary
of Borrower, dated the Effective Date, certifying that (i) the Articles
of Incorporation and Bylaws of Borrower, in the form delivered to
Administrative Agent on the Closing Date, are in full force and effect
and have not been amended, supplemented, revoked or repealed since such
date, (ii) that the resolution of Borrower, in the form delivered to
Administrative Agent on the Closing Date, is in full force and effect
and has not been amended, supplemented, revoked or repealed since such
date, and (iii) the incumbency, signatures and authority of the
officers of Borrower authorized to execute, deliver and perform the
Credit Agreement, this Amendment, the other Credit Documents and all
other documents, instruments or agreements relating thereto executed or
to be executed by Borrower; and
(d) Such other evidence as Administrative Agent, Collateral
Agent or any Bank may reasonably request to establish the accuracy and
completeness of the
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representations and warranties and the compliance with the terms and
conditions contained in this Amendment.
5. Effect of this Amendment. On and after the Effective Date, each
reference in the Restated Credit Agreement and the other Credit Documents to the
Restated Credit Agreement shall mean the Restated Credit Agreement as amended
hereby. Except as specifically amended above, (a) the Restated Credit Agreement
and the other Credit Documents shall remain in full force and effect and are
hereby ratified and confirmed and (b) the execution, delivery and effectiveness
of this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power, or remedy of the Banks, Administrative Agent or
Collateral Agent, nor constitute a waiver of any provision of the Restated
Credit Agreement or any other Credit Document.
6. Miscellaneous.
(a) Counterparts. This Amendment may be executed in any number
of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for
all purposes.
(b) Headings. Headings in this Amendment are for convenience
of reference only and are not part of the substance hereof.
(c) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
3
IN WITNESS WHEREOF, Borrower, the Banks, Administrative Agent and
Collateral Agent have caused this Amendment to be executed as of the day and
year first above written.
BORROWER: BELL MICROPRODUCTS INC.
By: /s/ Remo E. Canessa
------------------------------------
Name: Remo E. Canessa
Title: Vice President of Finance
and CFO
By: /s/ W. Don Bell
------------------------------------
Name: W. Don Bell
Title: President & CEO
ADMINISTRATIVE AGENT: CALIFORNIA BANK & TRUST,
As Administrative Agent
By: /s/ Stephen C. Bellicini
------------------------------------
Name: Stephen C. Bellicini
Title: Senior Vice President
By: /s/ Carmen Sanz
------------------------------------
Name: Carmen Sanz
Title: Assistant Vice President
COLLATERAL AGENT: UNION BANK OF CALIFORNIA, N.A.,
As Collateral Agent
By: /s/ William E. Hinch
------------------------------------
Name: William E. Hinch
Title: Vice President
By:
------------------------------------
Name:
Title:
4
BANKS: CALIFORNIA BANK & TRUST,
As a Bank
By: /s/ Stephen C. Bellicini
------------------------------------
Name: Stephen C. Bellicini
Title: Senior Vice President
By: /s/ Carmen Sanz
------------------------------------
Name: Carmen Sanz
Title: Assistant Vice President
UNION BANK OF CALIFORNIA, N.A.,
As a Bank
By: /s/ William E. Hinch
------------------------------------
Name: William E. Hinch
Title: Vice President
By:
------------------------------------
Name:
Title:
SANWA BANK CALIFORNIA,
As a Bank
By: /s/ Clifford M. Wallace
------------------------------------
Name: Clifford M. Wallace
Title: Vice President
COMERICA BANK - CALIFORNIA,
As a Bank
By: /s/ Scott T. Smith
------------------------------------
Name: SCOTT T. SMITH
Title: VICE PRESIDENT
5
U.S. BANK NATIONAL ASSOCIATION,
As a Bank
By: /s/ Michael Powell
------------------------------------
Name: Michael Powell
Title: Vice President
By:
------------------------------------
Name:
Title:
IBM CREDIT CORPORATION,
As a Bank
By: /s/ Thomas S. Curcid
------------------------------------
Name: Thomas S. Curcid
Title: Manager of Credit
6
ATTACHMENT A
MARKED VERSION OF RESTATED CREDIT AGREEMENT
7
DRAFT CONFORMED COPY
(Through 5th Amendment)
- --------------------------------------------------------------------------------
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THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
among
BELL MICROPRODUCTS INC.
and
THE BANKS NAMED HEREIN
and
CALIFORNIA BANK & TRUST,
as Administrative Agent for the Banks
November 12, 1998
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CREDIT AGREEMENT
Table Of Contents
Page
SECTION I. INTERPRETATION.............................................................................2
1.01. Definitions....................................................................................2
1.02. GAAP...........................................................................................2
1.03. Headings.......................................................................................2
1.04. Plural Terms...................................................................................2
1.05. Time...........................................................................................2
1.06. Governing Law..................................................................................2
1.07. Construction...................................................................................2
1.08. Calculation of Interest and Fees...............................................................2
1.09. Other Interpretive Provisions..................................................................3
SECTION II. CREDIT FACILITIES..........................................................................3
2.01. Revolving Loan Facility........................................................................3
2.02. Amount Limitations, Commitment Reductions, Etc.................................................6
2.03. Fees...........................................................................................7
2.04. Prepayments....................................................................................8
2.05. Other Payment Terms............................................................................9
2.06. Notes and Interest Account....................................................................10
2.07. Loan Funding..................................................................................10
2.08. Pro Rata Treatment............................................................................11
2.09. Change of Circumstances.......................................................................12
2.10. Taxes on Payments.............................................................................14
2.11. Funding Loss Indemnification..................................................................16
2.12. Security......................................................................................16
SECTION III. CONDITIONS PRECEDENT......................................................................17
3.01. Conditions Precedent to Initial Revolving Loans...............................................17
3.02. Conditions Precedent to Each Credit Event.....................................................17
3.03. Covenant to Deliver...........................................................................18
SECTION IV. REPRESENTATIONS AND WARRANTIES............................................................18
4.01. Borrower's Representations and Warranties.....................................................18
4.02. Reaffirmation.................................................................................23
SECTION V. COVENANTS.................................................................................23
5.01. Affirmative Covenants.........................................................................23
5.02. Negative Covenants............................................................................26
SECTION VI. DEFAULT...................................................................................29
6.01. Events of Default.............................................................................29
6.02. Remedies......................................................................................30
SECTION VII. THE AGENTS AND RELATIONS AMONG BANKS......................................................31
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Table Of Contents
(continued)
Page
7.01. Appointment, Powers and Immunities............................................................31
7.02. Reliance by Agents............................................................................31
7.03. Defaults......................................................................................32
7.04. Indemnification...............................................................................32
7.05. Non-Reliance..................................................................................32
7.06. Resignation or Removal of Administrative Agent................................................33
7.07. Resignation or Removal of Collateral Agent....................................................33
7.08. Agents in their Individual Capacity...........................................................34
7.09. Co-Agents.....................................................................................34
SECTION VIII. MISCELLANEOUS.............................................................................34
8.01. Notices.......................................................................................34
8.02. Expenses......................................................................................35
8.03. Indemnification...............................................................................36
8.04. Waivers; Amendments...........................................................................36
8.05. Successors and Assigns........................................................................37
8.06. Setoff; Security Interest.....................................................................40
8.07. No Third Party Rights.........................................................................40
8.08. Partial Invalidity............................................................................40
8.09. Arbitration...................................................................................41
8.10. Jury Trial....................................................................................42
8.11. Counterparts..................................................................................42
SECTION IX. EFFECTIVE DATE OF RESTATED CREDIT AGREEMENT...............................................43
9.01. Effective Date................................................................................43
9.02. Loans Under Existing Credit Agreement.........................................................43
9.03. Effect........................................................................................43
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Table Of Contents
(continued)
Page
SCHEDULES
I Banks (Preamble)
II Pricing Grid
1.01 Definitions (1.01)
3.01 Effective Date Conditions Precedent
4.01(g) Material Litigation
4.01(q) Subsidiaries
5.01(j) Documents to be Delivered by Borrower on or Prior
to the Tenex Data Acquisition Effective Date
EXHIBITS
A Notice of Revolving Loan Borrowing (2.01(b))
B Notice of Revolving Loan Conversion (2.01(d))
C Notice of Revolving Loan Interest Period Selection (2.01(e))
D Revolving Loan Note (2.07(a))
E Third Amended and Restated Security Agreement (2.13(a), 9.03)
F Third Amended and Restated Pledge Agreement (2.13(a), 9.03)
G Bell Canada Guaranty (2.13(a))
H Bell Canadian Pledge Agreement (2.13(b))
I Bell Tenex/Bell Future-Tech Guaranty (2.13(b), 2.13(c))
J Bell-Tenex/Bell Future-Tech Security Agreement (2.13(b),
2.13(c))
K Borrowing Base Certificate (5.01(a))
L Assignment Agreement (8.05(c))
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CONFORMED COPY
THROUGH 5TH AMENDMENT
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this "Restated Credit
Agreement"), dated as of November 12, 1998, is entered into by and among:
(1) BELL MICROPRODUCTS INC., a California corporation
("Borrower");
(2) Each of the financial institutions from time to time
listed in Schedule I hereto, as amended from time to time (such
financial institutions to be referred to herein collectively as the
"Banks");
(3) CALIFORNIA BANK & TRUST (formerly known as Sumitomo Bank
of California), a California banking corporation ("CB&T"), as
administrative agent for the Banks (in such capacity, "Administrative
Agent");
(4) Prior to the First Amendment Effective Date,
Administrative Agent, as collateral agent for the Banks (in such
capacity, "Collateral Agent"), and on and after the First Amendment
Effective Date, UNION BANK OF CALIFORNIA, N.A., a national banking
association, as Collateral Agent; and
(5) COMERICA BANK-CALIFORNIA, a California banking
corporation, as co-agent for the Banks.
RECITALS
A. Borrower, Administrative Agent and the Banks are parties to a Second
Amended and Restated Credit Agreement dated as of May 23, 1995 (as amended to
the date hereof, the "Existing Credit Agreement"), pursuant to which the Banks
have provided to Borrower (i) a revolving line of credit facility in the
principal amount of $100,000,000 and (ii) a letter of credit sub-facility in the
amount of $10,000,000 (collectively, the "Existing Credit Facility").
B. Borrower has requested Administrative Agent and the Banks to amend
the Existing Credit Agreement so as to make certain changes.
C. Administrative Agent and the Banks are willing so to amend the
Existing Credit Agreement upon the terms and subject to the conditions set forth
herein. For convenience of reference, the parties hereto wish to restate the
Existing Credit Agreement as so amended in its entirety.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants contained herein, the parties hereto hereby agree that the Existing
Credit Agreement shall be amended and restated as of the date hereof to read in
its entirety as follows:
SECTION I. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Restated Credit
Agreement or any other Credit Document, each term set forth in Schedule 1.01,
when used in this Restated Credit Agreement or any other Credit Document, shall
have the respective meaning given to that term in Schedule 1.01 or in the
provision of this Restated Credit Agreement or other Credit Document referenced
in Schedule 1.01.
1.02. GAAP. Unless otherwise indicated in this Restated Credit
Agreement or any other Credit Document, all accounting terms used in this
Restated Credit Agreement or any other Credit Document shall be construed, and
all accounting and financial computations hereunder or thereunder shall be
computed, in accordance with GAAP. If GAAP changes during the term of this
Restated Credit Agreement such that any covenants contained herein would then be
calculated in a different manner or with different components, Borrower, the
Banks and the Agents agree to negotiate in good faith to amend this Restated
Credit Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating Borrower's financial condition to substantially the same
criteria as were effective prior to such change in GAAP; provided, however,
that, until Borrower, the Banks and the Agents so amend this Restated Credit
Agreement, all such covenants shall be calculated in accordance with GAAP as in
effect immediately prior to such change.
1.03. Headings. Headings in this Restated Credit Agreement and each of
the other Credit Documents are for convenience of reference only and are not
part of the substance hereof or thereof.
1.04. Plural Terms. All terms defined in this Restated Credit Agreement
or any other Credit Document in the singular form shall have comparable meanings
when used in the plural form and vice versa.
1.05. Time. All references in this Restated Credit Agreement and each
of the other Credit Documents to a time of day shall mean San Francisco,
California time, unless otherwise indicated.
1.06. Governing Law. This Restated Credit Agreement and each of the
other Credit Documents shall be governed by and construed in accordance with the
laws of the State of California without reference to conflicts of law rules.
1.07. Construction. This Restated Credit Agreement is the result of
negotiations among, and has been reviewed by, Borrower, each Bank, each Agent
and their respective counsel. Accordingly, this Restated Credit Agreement shall
be deemed to be the product of all
2
parties hereto, and no ambiguity shall be construed in favor of or against
Borrower, any Bank or any Agent.
1.08. Calculation of Interest and Fees. All calculations of interest
and fees under this Restated Credit Agreement and the other Credit Documents for
any period (a) shall include the first day of such period and exclude the last
day of such period and (b) shall be calculated on the basis of a year of 360
days for actual days elapsed.
1.09. Other Interpretive Provisions. References in this Restated Credit
Agreement to "Recitals," "Sections," "Paragraphs," "Subparagraphs," "Exhibits"
and "Schedules" are to recitals, sections, paragraphs, subparagraphs, exhibits
and schedules herein and hereto unless otherwise indicated. References in this
Restated Credit Agreement and each of the other Credit Documents to any
document, instrument or agreement (a) shall include all exhibits, schedules and
other attachments thereto, (b) shall include all documents, instruments or
agreements issued or executed in replacement thereof, and (c) shall mean such
document, instrument or agreement, or replacement or predecessor thereto, as
amended, modified and supplemented from time to time and in effect at any given
time. The words "hereof," "herein" and "hereunder" and words of similar import
when used in this Restated Credit Agreement or any other Credit Document shall
refer to this Restated Credit Agreement or such other Credit Document, as the
case may be, as a whole and not to any particular provision of this Restated
Credit Agreement or such other Credit Document, as the case may be. The words
"include" and "including" and words of similar import when used in this Restated
Credit Agreement or any other Credit Document shall not be construed to be
limiting or exclusive. Notwithstanding references herein and in the other Credit
Documents to each of the financial institutions listed from time to time on
Schedule I hereto as a "Bank," such references are not intended to indicate, and
should not be construed to mean, that each of such financial institutions is in
fact a federally regulated "bank".
SECTION II. CREDIT FACILITIES.
2.01. Revolving Loan Facility.
(a) Revolving Loan Availability. Subject to the terms and
conditions of this Restated Credit Agreement (including the amount
limitations set forth in Paragraph 2.03 and the conditions set forth in
Section III), each Bank severally agrees to advance to Borrower from
time to time during the period beginning on the Effective Date and
ending on May 31, 2001 (the "Revolving Loan Maturity Date") such loans
as Borrower may request under this Paragraph 2.01 (individually, a
"Revolving Loan"); provided, however, that the (i) aggregate principal
amount of all Revolving Loans made by such Bank at any time outstanding
shall not exceed such Bank's Revolving Loan Commitment at such time and
(ii) the aggregate principal amount of all Revolving Loans made by all
Banks at any time outstanding shall not exceed the Total Revolving Loan
Commitment at such time. All Revolving Loans shall be made on a pro
rata basis by the Banks in accordance with their respective
Proportionate Shares, with each Revolving Loan Borrowing to be
comprised of a Revolving Loan by each Bank equal to such Bank's
Proportionate Share
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of such Revolving Loan Borrowing. Except as otherwise provided herein,
Borrower may borrow, repay and reborrow Revolving Loans until the
Revolving Loan Maturity Date.
(b) Notice of Revolving Loan Borrowing. Borrower shall request
each Revolving Loan Borrowing by delivering to Administrative Agent an
irrevocable written notice in the form of Exhibit A, appropriately
completed (a "Notice of Revolving Loan Borrowing"), which specifies,
among other things:
(i) The principal amount of the requested Revolving
Loan Borrowing;
(ii) Whether the requested Revolving Loan Borrowing
is to consist of (A) Revolving Loans which bear interest as
provided in clause (i) of Subparagraph 2.01(c) (individually,
a "Revolving Prime Rate Loan") or (B) Revolving Loans which
bear interest as provided in clause (ii) of Subparagraph
2.01(c) (individually, a "Revolving LIBOR Loan");
(iii) If the requested Revolving Loan Borrowing is to
consist of Revolving LIBOR Loans, the initial Interest Period
selected by Borrower for such Revolving Loans in accordance
with Subparagraph 2.01(e); and
(iv) The date of the requested Revolving Loan
Borrowing, which shall be a Business Day.
Borrower shall give each Notice of Revolving Loan Borrowing to
Administrative Agent at least three (3) Business Days before the date
of the requested Revolving Loan Borrowing in the case of a Revolving
Loan Borrowing consisting of Revolving LIBOR Loans and at least one (1)
Business Day before the date of the requested Revolving Loan Borrowing
in the case of a Revolving Loan Borrowing consisting of Revolving Prime
Rate Loans. Each Notice of Revolving Loan Borrowing shall be delivered
by first-class mail or facsimile to Administrative Agent at the office
or facsimile number and during the hours specified in Paragraph 8.01;
provided, however, that Borrower shall promptly deliver to
Administrative Agent the original of any Notice of Revolving Loan
Borrowing initially delivered by facsimile. Each Revolving Loan
Borrowing consisting of Revolving Prime Rate Loans shall be in the
minimum amount of $100,000 or an integral multiple of $100,000 in
excess thereof. Each Revolving Loan Borrowing consisting of Revolving
LIBOR Loans shall be in the minimum amount of $500,000 or an integral
multiple of $100,000 in excess thereof. Administrative Agent shall
notify each Bank no later than 5:00 p.m. California time on the date of
receipt of each such Notice of Revolving Loan Borrowing of the contents
thereof and of the amount and Type of each Revolving Loan to be made by
such Bank as part of the requested Revolving Loan Borrowing.
(c) Revolving Loan Interest Rates. Borrower shall pay interest
on the unpaid principal amount of each Revolving Loan from the date of
such Revolving Loan until the maturity thereof, at one of the following
rates per annum:
4
(i) During such periods as such Revolving Loan is a
Revolving Prime Rate Loan, at a rate per annum equal to the
Prime Rate, such rate to change from time to time as the Prime
Rate shall change; and
(ii) During such periods as such Revolving Loan is a
Revolving LIBOR Loan, at a rate per annum equal at all times
during each Interest Period for such Revolving Loan to the
LIBO Rate for such Interest Period plus the Applicable Margin
therefor, such rate to change from time to time during such
Interest Period as the Applicable Margin shall change;
provided, however, that each of the rates set forth in clauses (i) and
(ii) of this Subparagraph 2.01(c) shall be increased by one percent
(1.00%) per annum on the date an Event of Default occurs and shall
continue at such increased rate unless and until such Event of Default
is waived in accordance with this Restated Credit Agreement. All
Revolving Loans in each Revolving Loan Borrowing shall, at any given
time prior to maturity, bear interest at one, and only one, of the
above rates.
(d) Conversion of Revolving Loans. Borrower may convert all
Revolving Loans in any Revolving Loan Borrowing consisting of Revolving
Prime Rate Loans into Revolving LIBOR Loans and all Revolving Loans in
any Revolving Loan Borrowing consisting of Revolving LIBOR Loans into
Revolving Prime Rate Loans; provided, however, that any conversion of
Revolving LIBOR Loans into Revolving Prime Rate Loans shall be made on,
and only on, the last day of an Interest Period for such Revolving
LIBOR Loans. Borrower shall request such a conversion by an irrevocable
written notice to Administrative Agent in the form of Exhibit B,
appropriately completed (a "Notice of Revolving Loan Conversion"),
which specifies, among other things:
(i) The Revolving Loan Borrowing which is to be
converted;
(ii) The Type of Loans into which such Revolving
Loans are to be converted;
(iii) If such Revolving Loans are to be converted
into Revolving LIBOR Loans, the initial Interest Period
selected by Borrower for such Revolving Loans in accordance
with Subparagraph 2.01(e); and
(iv) The date of the requested conversion, which
shall be a Business Day.
Borrower shall give each Notice of Revolving Loan Conversion to
Administrative Agent at least three (3) Business Days before the date
of the requested conversion in the case of a conversion into Revolving
LIBOR Loans and at least one (1) Business Day before the date of the
requested conversion in the case of a conversion into Revolving Prime
Rate Loans. Each Notice of Revolving Loan Conversion shall be delivered
by first-class mail or facsimile to Administrative Agent at the office
or to the facsimile number and during the hours specified in Paragraph
8.01; provided, however, that Borrower shall promptly.
5
deliver to Administrative Agent the original of any Notice of Revolving
Loan Conversion initially delivered by facsimile. Administrative Agent
shall notify each Bank no later than 5:00 p.m. California time on the
date of receipt of each such Notice of Revolving Loan Conversion of the
contents thereof and of the amount and Type of each Revolving Loan to
be converted by such Bank as part of the requested Revolving Loan
Conversion.
(e) Revolving LIBOR Loan Interest Periods.
(i) The initial and each subsequent Interest Period
selected by Borrower for a Revolving LIBOR Loan shall be
thirty (30), sixty (60), ninety (90), one-hundred twenty
(120), one-hundred fifty (150) or one-hundred eighty (180)
days; provided, however, that (A) any Interest Period which
would otherwise end on a day which is not a Business Day shall
be extended to the next succeeding Business Day unless such
next Business Day falls in another calendar month, in which
case such Interest Period shall end on the immediately
preceding Business Day; (B) any Interest Period which begins
on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end
on the last Business Day of a calendar month; and (C) no
Interest Period shall end after the Revolving Loan Maturity
Date.
(ii) Borrower shall notify Administrative Agent by an
irrevocable written notice in the form of Exhibit C,
appropriately completed (a "Notice of Revolving Loan Interest
Period Selection"), at least three (3) Business Days prior to
the last day of each Interest Period for Revolving LIBOR Loans
of the Interest Period selected by Borrower for the next
succeeding Interest Period for such Revolving LIBOR Loans.
Each Notice of Revolving Loan Interest Period Selection shall
be given by first-class mail or facsimile to the office or the
facsimile number and during the hours specified in Paragraph
8.01; provided, however, that Borrower shall promptly deliver
to Administrative Agent the original of any Notice of
Revolving Loan Interest Period Selection initially delivered
by facsimile. If Borrower fails to notify Administrative Agent
of the next Interest Period for Revolving LIBOR Loans in
accordance with this Subparagraph 2.01(e), such Revolving
Loans shall automatically convert to Revolving Prime Rate
Loans on the last day of the current Interest Period therefor.
Administrative Agent shall notify each Bank no later than 5:00
p.m. California time on the date of receipt of each such
Notice of Revolving Loan Interest Period Selection of the
contents thereof and of the Interest Period selected for each
Revolving Loan.
(f) Scheduled Revolving Loan Payments. Scheduled Revolving
Loan Payments. Borrower shall repay to each Bank on the Revolving Loan
Maturity Date the unpaid principal amount of each Revolving Loan made
by such Bank. Borrower shall pay accrued interest on the unpaid
principal amount of each Revolving Loan on the last Business Day in
each month and upon prepayment (to the extent thereof) and at maturity.
6
(g) Purpose. Borrower shall use the proceeds of the Revolving
Loans made by the Banks on or after the Effective Date (i) to refinance
the loans outstanding under the Existing Credit Agreement on the
Effective Date and (ii) for Borrower's working capital and general
corporate needs (including acquisitions approved by the Banks from time
to time in their sole discretion).
2.02. Letter of Credit Sub-facility.
(a) Letter of Credit Availability. Subject to the terms and
conditions of this Restated Credit Agreement (including the amount
limitations set forth in Paragraph 2.03), Issuing Bank shall issue on
behalf of Borrower from time to time during the period beginning on the
Fifth Amendment Effective Date and ending on the date which is fifteen
(15) days prior to the Revolving Loan Maturity Date (the "LC Facility
Expiration Date") such letters of credit as Borrower may request under
this Paragraph 2.02 (individually, a "Letter of Credit"); provided,
however, as follows:
(i) The aggregate amount available for drawing under
all Letters of Credit at any time outstanding shall not exceed
Ten Million Dollars ($10,000,000) (such amount, as reduced
from time to time pursuant to this Restated Credit Agreement,
to be referred to herein as the "LC Commitment").
(ii) Each Letter of Credit shall be an irrevocable
standby Letter of Credit and the beneficiary or beneficiaries
under each the Letter of Credit shall be the lender or lenders
providing the Canadian dollar revolving line of credit
facility to be entered into by Bell-Tenex in a aggregate
principal amount not to exceed the equivalent of Ten Million
Dollars ($10,000,000).
(iii) Each Letter of Credit shall expire on or prior
to the LC Facility Expiration Date.
(iv) Each Letter of Credit shall be governed by the
Uniform Customs and Practices for Documentary Credits as most
recently published by the International Chamber of Commerce
(the "UCP") prior to the date of issuance of such Letter of
Credit and the terms of the UCP are hereby incorporated by
reference with respect to each Letter of Credit.
(v) Each Letter of Credit shall be in a form
reasonably acceptable to Issuing Bank.
Except as otherwise provided herein, Borrower may request Letters of
Credit, cause or allow Letters of Credit to expire and request
additional Letters of Credit until the LC Facility Expiration Date.
(b) LC Application. Borrower shall request each Letter of
Credit by delivering to Issuing Bank (with a copy to Administrative
Agent) an irrevocable written application in a form reasonably
acceptable to Issuing Bank (it being understood that
7
such form shall not contain terms inconsistent with the terms set forth
in this Restated Credit Agreement), appropriately completed (an "LC
Application"), which specifies, among other things:
(i) The stated amount of the requested Letter of
Credit;
(ii) The name and address of the beneficiary of the
requested Letter of Credit;
(iii) The expiration date of the requested Letter of
Credit if such date is prior to the LC Facility Expiration
Date;
(iv) The documentary conditions for drawing under the
requested Letter of Credit;
(v) The date of issuance for the requested Letter of
Credit, which shall be a Business Day; and
(vi) The aggregate amount which will be available for
drawing under all outstanding Letters of Credit (including the
requested Letter of Credit), which amount shall not exceed the
LC Commitment.
Borrower shall give each LC Application to Issuing Bank at least three
(3) Business Days before the proposed date of issuance of the requested
Letter of Credit. Each LC Application shall be delivered by an
established express courier service, first-class mail or facsimile to
Issuing Bank with a copy thereof to Administrative Agent at their
respective offices or facsimile numbers and during the hours specified
in Paragraph 8.01; provided, however, that Borrower shall promptly
deliver to Issuing Bank the original of any LC Application initially
delivered by facsimile. Administrative Agent shall promptly notify each
Bank of the contents of each LC Application. In the event of any
conflict between the terms of this Restated Credit Agreement and the
terms of any LC Application, the terms of this Restated Credit
Agreement shall control.
(c) Disbursement and Reimbursement.
(i) Disbursement. Issuing Bank will notify Borrower
by facsimile forthwith upon receipt of the presentment of any
demand for payment under any Letter of Credit, together with
notice of the amount of such payment and the date such payment
shall be made; provided, however that Issuing Bank shall incur
no liability to Borrower or any third party for failure to so
notify. Subject to the terms and provisions of such Letter of
Credit, Issuing Bank shall make such payment (a "Drawing
Payment") to the appropriate beneficiary.
(ii) Time of Reimbursement. Not later than 11:00 a.m.
on the day each Drawing Payment is to be made by Issuing Bank,
Borrower shall make or cause to be made to Issuing Bank a
payment in the amount of such Drawing Payment (a
8
"Reimbursement Payment"); provided, however, that Borrower
shall make such Reimbursement Payment to, or cause such
Reimbursement Payment to be made to, Administrative Agent for
the benefit of the Banks if, prior to the time such
Reimbursement Payment is made, Issuing Bank has notified
Borrower that it has requested the Banks pursuant to clause
(ii) of Subparagraph 2.02(d) to pay to Issuing Bank their
respective Proportionate Shares of the Drawing Payment made by
Issuing Bank. If any such Reimbursement Payment is made to
Administrative Agent, Administrative Agent shall promptly pay
to each Bank which has paid its Proportionate Share of the
Drawing Payment, such Bank's Proportionate Share of the
Reimbursement Payment and shall promptly pay to Issuing Bank
the balance of such Reimbursement Payment.
(iii) Reimbursement Obligation Absolute. The
obligation of Borrower to reimburse Issuing Bank or the Banks,
as the case may be, for Drawing Payments (such obligation to
be referred to herein as a "Reimbursement Obligation") shall
be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this
Restated Credit Agreement under and without regard to any
circumstances, including, without limitation (A) any lack of
validity or enforceability of any of the Credit Documents, (B)
the existence of any claim, setoff, defense or other right
which Borrower may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any Persons for
whom any such beneficiary or transferee may be acting),
Issuing Bank, Administrative Agent, Collateral Agent, any Bank
or any other Person, whether in connection with this Restated
Credit Agreement, the transactions contemplated herein or in
the other Credit Documents, or in any unrelated transaction,
(C) any breach of contract or dispute between Borrower, any
beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such beneficiary or transferee may be
acting), Issuing Bank, Administrative Agent, Collateral Agent,
any Bank or any other Person, (D) any demand, statement or
other document presented under any Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect
or any statement therein proving to be untrue or inaccurate in
any respect, (E) payment by Issuing Bank under any Letter of
Credit against presentation of a demand for payment which does
not comply with the terms of such Letter of Credit provided
that Issuing Bank has used reasonable care in examining all
documents presented to it in connection with such demand in
accordance with the UCP, (F) any non-application or
misapplication by any beneficiary or any transferee of any
Letter of Credit (or any Persons for whom any such beneficiary
or transferee may be acting) of the proceeds of any drawing
under such Letter of Credit or (G) any delay, extension of
time, renewal, compromise or other indulgence or modification
granted or agreed to by Issuing Bank, Administrative Agent,
Collateral Agent or any Bank, with or without notice to or
approval by Borrower (unless such notice or approval is
required by this Restated Credit Agreement or applicable law),
with respect to Borrower's indebtedness under this Restated
Credit Agreement; provided, that this Subparagraph 2.02(c)
shall not abrogate any
9
right which Borrower may have to seek to enjoin any drawing
under any Letter of Credit or to recover damages from Issuing
Bank, Administrative Agent, Collateral Agent or any Bank
pursuant to Subparagraph 2.02(e).
(d) Bank Participations; Revolving Loan Funding.
(i) Participation Agreement. Each Bank severally,
unconditionally and irrevocably agrees with Issuing Bank to
participate in the extension of credit arising from the
issuance of each Letter of Credit in an amount equal to such
Bank's Proportionate Share of the stated amount of such Letter
of Credit from time to time, and the issuance of each Letter
of Credit shall be deemed a confirmation by each such Bank of
such participation in such amount.
(ii) Participation Funding. Issuing Bank may request
the Banks to fund their participations in Letters of Credit by
paying to Issuing Bank all or any portion of any Drawing
Payment made or to be made by Issuing Bank under any Letter of
Credit. Issuing Bank shall make such a request by delivering
to Administrative Agent (with a copy to Borrower), at any time
after the drawing for which such payment is requested has been
made upon Issuing Bank, a written request for such payment
which specifies the amount of such Drawing Payment and the
date on which such Drawing Payment is to be made or was made;
provided, however, that Issuing Bank shall not request the
Banks to make any payment under this Subparagraph 2.02(d) in
connection with any portion of a Drawing Payment for which
Issuing Bank has been reimbursed from a Reimbursement Payment
by Borrower unless such Reimbursement Payment has been
thereafter recovered by Borrower. Administrative Agent shall
promptly notify each Bank of the contents of each such request
and of such Bank's Proportionate Share of the applicable
portion of such Drawing Payment. Promptly following receipt of
such notice from Administrative Agent, each Bank shall pay to
Administrative Agent, for the benefit of Issuing Bank, such
Bank's Proportionate Share of the applicable portion of such
Drawing Payment.
(iii) Funding Through Revolving Loans. At any time
any Reimbursement Obligations are outstanding, Administrative
Agent may or, upon the written request of Issuing Bank (if
Borrower is not then the subject of a bankruptcy proceeding),
shall (subject to the terms and conditions of this
Subparagraph 2.02(d)), initiate a Revolving Loan Borrowing in
an amount not exceeding the aggregate amount of such
outstanding Reimbursement Obligations and use the proceeds of
such Loan to repay all or a portion of such Reimbursement
Obligations. Administrative Agent shall initiate such a
Revolving Loan Borrowing by delivering to each Bank (with a
copy to Borrower) a written notice which specifies the
aggregate amount of outstanding Reimbursement Obligations, the
amount of the Revolving Loan Borrowing, the date of such
Revolving Loan Borrowing and the amount of the Loan to be made
by such Bank as part of such Revolving Loan Borrowing. Each
Bank shall make
10
available to Administrative Agent funds in the amount of its
Proportionate Share of such Loan as provided in Subparagraph
2.09(a). After receipt of such funds, Administrative Agent
shall promptly disburse such funds to Issuing Bank and the
Banks, as appropriate, in payment of the outstanding
Reimbursement Obligations.
(iv) Obligations Absolute. Each Bank's obligations to
fund its participations under this Subparagraph 2.02(d) shall
be absolute, unconditional and irrevocable and shall not be
affected by (A) the occurrence or existence of any Default or
Event of Default, (B) any failure to satisfy any condition set
forth in Section III, (C) any event or condition which might
have a Material Adverse Effect, (D) the failure of any other
Bank to make any payment under this Subparagraph 2.02(d), (E)
any right of offset, abatement, withholding or reduction which
such Bank may have against Issuing Bank, Administrative Agent,
Collateral Agent, any other Bank or Borrower, (F) any event,
circumstance or condition set forth in Subparagraph 2.02(c) or
Subparagraph 2.02(e), or (G) any other event, circumstance or
condition whatsoever, whether or not similar to any of the
foregoing; provided, that nothing in this Paragraph 2.02 shall
prejudice any right which any Bank may have against Issuing
Bank for any action by Issuing Bank which constitutes gross
negligence or willful misconduct.
(e) Liability of Issuing Bank, Etc. Borrower agrees that none
of Issuing Bank, Administrative Agent, Collateral Agent or any other
Bank (nor any of their respective directors, officers or employees)
shall be liable or responsible for (i) the use which may be made of any
Letter of Credit or the proceeds of any drawing thereunder or for any
acts or omissions of any beneficiary or transferee thereof in
connection therewith; (ii) any reference which may be made to this
Restated Credit Agreement or to any Letter of Credit in any agreements,
instruments or other documents relating to obligations secured by such
Letter of Credit; (iii) the validity, sufficiency or genuineness of
documents, or of any endorsement(s) thereon, even if such documents
should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged or any statement therein prove to be
untrue or inaccurate in any respect whatsoever; (iv) payment by Issuing
Bank against presentation of documents which do not comply with the
terms of any Letter of Credit, including failure of any documents to
bear any reference or adequate reference to any Letter of Credit,
provided that Issuing Bank has used reasonable care in examining all
documents presented to it in connection with a demand on any Letter of
Credit in accordance with the UCP; or (v) any other circumstances
whatsoever in making or failing to make payment under any Letter of
Credit, except only that Issuing Bank shall be liable to Borrower for
acts or events described in clauses (i) through (v) above, to the
extent, but only to the extent, of any damages suffered by Borrower
(excluding consequential damages) which Borrower proves were caused by
(A) Issuing Bank's willful misconduct, bad faith or gross negligence in
determining whether a drawing made under any Letter of Credit complies
with the terms and conditions therefor stated in such Letter of Credit
or (B) Issuing Bank's willful misconduct, bad faith or gross negligence
in failing to pay under any Letter of Credit after a drawing by the
beneficiary thereof strictly complying with the terms and conditions of
such Letter of Credit. Without limiting the foregoing,
11
Issuing Bank may accept a drawing that appears on its face to be in
order, without responsibility for further investigation. The
determination of whether a drawing has been made under any Letter of
Credit prior to its expiration or whether a drawing made under any
Letter of Credit is in proper and sufficient form shall be made by
Issuing Bank in its sole discretion, which determination shall be
conclusive and binding upon Borrower to the extent permitted by law.
Borrower hereby waives any right to object to any payment made under
any Letter of Credit with regard to a drawing request that is in the
form provided in such Letter of Credit but which varies with respect to
punctuation, capitalization, spelling or similar matters of form.
(f) Reports of Issuing Bank. While any Letter of Credit is
outstanding, Issuing Bank shall on a monthly basis provide to
Administrative Agent or any Bank such information regarding the Letters
of Credit as Administrative Agent or such Bank may reasonably request,
including the Letters of Credit outstanding, the stated amounts of
outstanding Letters of Credit, the expiration dates of outstanding
Letters of Credit, the names of the beneficiaries of outstanding
Letters of Credit, the amounts of unpaid Reimbursement Obligations and
the amounts and times of Drawing Payments and Reimbursement Payments.
(g) Purpose. Borrower shall use the Letters of Credit solely
as provided in clause (ii) of Subparagraph 2.02(a).
2.03. Amount Limitations, Commitment Reductions, Etc.
(a) Borrowing Base.
(i) The aggregate principal amount of all Revolving
Loans outstanding at any time, the aggregate amount available
for drawing under all Letters of Credit then outstanding and
the aggregate amount of all Reimbursement Obligations then
outstanding (such sum to be referred to herein as the
"Outstanding Facilities Credit") shall not exceed an amount
(the "Borrowing Base") equal to the lesser of:
(A) The Total Revolving Loan Commitment at
such time; and
(B) The sum at such time of:
(1) eighty percent (80%) of
Eligible Accounts; and
(2) The lesser of (y) forty percent
(40%) of Eligible Inventory and (z)
$60,000,000.
(ii) For the purposes of this Restated Credit
Agreement, the Borrowing Base on any date of determination
shall be presumed to be the Borrowing Base determined pursuant
to the most recent of (A) the latest Borrowing Base
Certificate delivered by Borrower prior to such date of
determination and (B) the
12
latest audit conducted by or on behalf of any Agent or any
Bank prior to such date of determination.
(b) Reduction or Cancellation of Commitments. Borrower may,
upon three (3) Business Days written notice to Administrative Agent
(and, in the case of the LC Commitment, to Issuing Bank), permanently
reduce the Total Revolving Loan Commitment or the LC Commitment by the
amount of One Million Dollars ($1,000,000) or an integral multiple of
One Million Dollars ($1,000,000) in excess thereof or cancel the Total
Revolving Loan Commitment or LC Commitment in its entirety; provided,
however, that:
(i) Borrower may not reduce the Total Revolving Loan
Commitment prior to the Revolving Loan Maturity Date, if,
after giving effect to such reduction, the Outstanding
Facilities Credit would exceed the Total Revolving Loan
Commitment; and
(ii) Borrower may not cancel the Total Revolving Loan
Commitment prior to the Revolving Loan Maturity Date, if,
after giving effect to such cancellation, any Revolving Loans
or Letters of Credit would then remain outstanding.
(c) Effect of Commitment Reductions. From the effective date
of any reduction of the Total Revolving Loan Commitment, the Revolving
Loan Commitment Fees payable pursuant to Subparagraph 2.03(b) shall be
computed on the basis of the Total Revolving Loan Commitment as so
reduced. Once reduced or cancelled, the Total Revolving Loan Commitment
may not be increased or reinstated without the prior written consent of
all Banks. Any reduction of the Total Revolving Loan Commitment
pursuant to this Paragraph 2.03 shall be applied to reduce the Banks'
respective Revolving Loan Commitments pro rata according to their
respective Proportionate Shares at the time of such reduction.
2.04. Fees.
(a) Agent's Fee. Borrower shall pay to Administrative Agent
and the co-agents, for their own account, agent's fees in the amounts
and at the times set forth in the Agent's Fee Letter.
(b) Revolving Loan Commitment Fees. Borrower shall pay to
Administrative Agent, for the benefit of the Banks as provided in
clause (iii) of Subparagraph 2.09(a), nonrefundable commitment fees
(the "Revolving Loan Commitment Fees") of seventeen and one-half basis
points (0.175%) per annum on the daily average Total Unused Revolving
Loan Commitment for the period beginning on the Effective Date and
ending on the Revolving Loan Maturity Date. Borrower shall pay the
Revolving Loan Commitment Fees in arrears on the last Business Day in
each February, May, August and November (commencing November 30, 1998)
and on the Revolving Loan Maturity Date
13
(or if the Total Revolving Loan Commitment is cancelled on a date prior
to the Revolving Loan Maturity Date, on such prior date).
(c) Fee on Increased Commitment. Borrower shall pay to
Administrative Agent, for the benefit of the Banks as provided in
clause (iii) of Subparagraph 2.09(a), a one time nonrefundable fee on
the increased commitment of $75,000 (the "Fee on Increased
Commitment"). Borrower shall pay the Fee on Increased Commitment on the
Effective Date.
(d) Letter of Credit Fees.
(i) Letter of Credit Usage Fee. Borrower shall pay to
Administrative Agent, for the ratable benefit of the Banks as
provided in clause (iv) of Subparagraph 2.09(a), a
nonrefundable usage fee for the Letters of Credit (the "LC
Usage Fee") in an amount equal to $100,000.00 per year payable
on each anniversary of the issuance of the Letter of Credit,
$5,000 of which shall be the LC Issuance Fee for the sole
benefit of Issuing Bank as provided in clause (ii) of this
Subparagraph 2.04(d).
(ii) Letter of Credit Issuance Fees. Borrower shall
pay to Administrative Agent, for the sole benefit of Issuing
Bank, nonrefundable issuance fees for the Letters of Credit
(the "LC Issuance Fees") in an amount equal to $5,000 per year
payable on each anniversary of the issuance of the Letter of
Credit.
(iii) Other Letter of Credit Fees. In addition to the
LC Issuance Fees, Borrower shall pay to Agent, for the sole
benefit of Issuing Bank, other standard reasonable fees of
Issuing Bank for drawings under, transfers of and amendments
to any Letter of Credit and other administrative actions
performed by Issuing Bank in connection with any Letter of
Credit, payable at such times and in such amounts as are
consistent with Issuing Bank's standard fee policy at the time
of such amendment or other action.
2.05 . Prepayments.
(a) Terms of all Prepayments. Upon the prepayment of any
Revolving Loan (whether such prepayment is an optional prepayment under
Subparagraph 2.05(b), a mandatory prepayment required by Subparagraph
2.05(c) or a mandatory prepayment required by any other provision of
this Restated Credit Agreement or the other Credit Documents,
including, without limitation, a prepayment upon acceleration),
Borrower shall pay to the Bank which made such Revolving Loan (i) all
accrued interest to the date of such prepayment on the amount prepaid,
and (ii) if such prepayment is the prepayment of a Revolving LIBOR Loan
on a day other than the last day of an Interest Period for such
Revolving LIBOR Loan, all amounts payable to such Bank pursuant to
Paragraph 2.12.
14
(b) Optional Prepayments. At its option, Borrower may, upon
one (1) Business Day notice to Administrative Agent, prepay the
Revolving Loans in any Revolving Loan Borrowing in part, in an
aggregate principal amount of $100,000 or more, or in whole.
(c) Mandatory Prepayments. If, at any time, the Outstanding
Facilities Credit exceeds the Borrowing Base at such time, Borrower
shall immediately prepay Revolving Loans and/or Reimbursement
Obligations then outstanding, and, to the extent necessary, provide to
Administrative Agent cash collateral for any then outstanding Letters
of Credit, in an aggregate amount equal to such excess.
(d) Application of Principal Prepayments. If no Event of
Default has occurred and is continuing, all prepayments which are
applied to reduce the principal amount of Revolving Loans shall be
applied to Revolving Loans as directed by Borrower. If Borrower fails
to direct the application of any such principal prepayments or if an
Event of Default has occurred and is continuing, such principal
prepayments shall be applied first to Revolving Loan Borrowings
consisting of Revolving Prime Rate Loans and then to Revolving Loan
Borrowings consisting of Revolving LIBOR in chronological order of
maturity.
2.06. Other Payment Terms.
(a) Place and Manner. Borrower shall make all payments due to
each Bank hereunder by payments to Administrative Agent, for the
account of such Bank and such Bank's Applicable Lending Office, at
Administrative Agent's office, located at the address specified in
Subparagraph 8.01(a), in lawful money of the United States and in same
day or immediately available funds not later than 10:00 a.m. on the
date due. Amounts received after 10:00 a.m. shall be deemed to have
been received on the next Business Day. Administrative Agent shall
promptly disburse to each Bank no later than 1:00 p.m. California time
on the date of such receipt each such payment received by
Administrative Agent for such Bank. Borrower hereby requests, directs
and authorizes Administrative Agent to effect the payment of all
regularly scheduled principal, interest and fee payments payable by
Borrower under this Restated Credit Agreement or any other Credit
Document and all fees and expenses payable by Borrower pursuant to
Paragraph 8.02 by debiting any deposit account maintained by Borrower
with CB&T for the amounts thereof when due.
(b) Date. Whenever any payment due hereunder shall fall 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 be included
in the computation of interest or fees, as the case may be.
(c) Late Payments. If any amounts required to be paid by
Borrower under this Restated Credit Agreement or the other Credit
Documents (including, without limitation, principal or interest payable
on any Revolving Loan, any fees or other amounts) remain
15
unpaid after such amounts are due, Borrower shall pay interest on the
aggregate, outstanding balance of such amounts from the date due until
those amounts are paid in full at a per annum rate equal to the Prime
Rate plus two percent (2.00%), such rate to change from time to time as
the Prime Rate shall change.
(d) Application of Payments. All payments hereunder shall be
applied first to unpaid fees, costs and expenses then due and payable
under this Restated Credit Agreement or the other Credit Documents,
second to accrued interest then due and payable under this Restated
Credit Agreement or the other Credit Documents and finally to reduce
the principal amount of outstanding Revolving Loans.
(e) Failure to Pay Administrative Agent. Unless Administrative
Agent shall have received notice from Borrower at least one (1)
Business Day prior to the date on which any payment is due to the Banks
hereunder that Borrower will not make such payment in full,
Administrative Agent may assume that Borrower has made such payment in
full to Administrative Agent on such date and Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each Bank
on such due date an amount equal to the amount then due such Bank. If
and to the extent Borrower shall not have so made such payment in full
to Administrative Agent, such Bank shall repay to Administrative Agent
forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed
to such Bank until the date such Bank repays such amount to
Administrative Agent, at the Federal Funds Rate. A certificate of
Administrative Agent submitted to any Bank with respect to any amounts
owing by such Bank under this Subparagraph 2.06(e) shall be conclusive
absent manifest error.
2.07. Notes and Interest Account.
(a) Revolving Loan Notes. The obligation of Borrower to repay
the Revolving Loans made by each Bank and to pay interest thereon at
the rates provided herein shall be evidenced by a promissory note in
the form of Exhibit D (individually, a "Revolving Loan Note") which
note shall be (i) payable to the order of such Bank, (ii) in the amount
of such Bank's Revolving Loan Commitment, (iii) dated the Effective
Date and (iv) otherwise appropriately completed. Borrower authorizes
each Bank to record on the schedule annexed to such Bank's Revolving
Loan Note the date and amount of each Revolving Loan made by such Bank
and of each payment or prepayment of principal thereon made by
Borrower, and agrees that all such notations shall constitute prima
facie evidence of the matters noted, provided that a failure to so
record shall not affect Borrower's obligations to repay each Revolving
Loan, interest thereon and all other amounts payable hereunder, under
such Revolving Loan Note or under any other Credit Document. Borrower
further authorizes each Bank to attach to and make a part of such
Bank's Revolving Loan Note continuations of the schedule attached
thereto as necessary.
(b) Interest Account. Borrower authorizes Administrative Agent
to record in an account or accounts maintained by Administrative Agent
on its books (the "Interest
16
Account") (i) the interest rates applicable to all Revolving Loans and
the effective dates of all changes thereto, (ii) the Interest Period
for each Revolving LIBOR Loan, (iii) the date and amount of each
principal and interest payment on each Revolving Loan and (iv) such
other information as Administrative Agent may determine is necessary
for the computation of interest payable by Borrower hereunder.
2.08. Loan Funding.
(a) Bank Funding and Disbursement to Borrower. Each Bank
shall, before 11:00 a.m. on the date of each Revolving Loan Borrowing,
make available to Administrative Agent at its office specified in
Paragraph 8.01, in same day or immediately available funds, such Bank's
Proportionate Share of such Revolving Loan Borrowing. After
Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Section III, Administrative
Agent will promptly disburse such funds in same day or immediately
available funds to Borrower. Unless otherwise directed by Borrower,
Administrative Agent shall disburse the proceeds of each Revolving Loan
Borrowing to Borrower by disbursement to the account or accounts
specified in the applicable Notice of Revolving Loan Borrowing.
(b) Bank Failure to Fund. Unless Administrative Agent shall
have received notice from a Bank prior to the date of any Revolving
Loan Borrowing that such Bank will not make available to Administrative
Agent such Bank's Proportionate Share of such Revolving Loan Borrowing,
Administrative Agent may assume that such Bank has made such portion
available to Administrative Agent on the date of such Revolving Loan
Borrowing in accordance with Subparagraph 2.08(a), and Administrative
Agent may, in reliance upon such assumption, make available to Borrower
(or otherwise disburse) on such date a corresponding amount. If any
Bank does not make the amount of its Proportionate Share of any
Revolving Loan Borrowing available to Administrative Agent on or prior
to the date of such Revolving Loan Borrowing, such Bank shall pay to
Administrative Agent, on demand, interest which shall accrue on such
amount until made available to Administrative Agent at rates equal to
(i) the daily Federal Funds Rate during the period from the date of
such Revolving Loan Borrowing through the third Business Day thereafter
and (ii) the Prime Rate thereafter. A certificate of Administrative
Agent submitted to any Bank with respect to any amounts owing under
this Subparagraph 2.08(b) shall be conclusive absent manifest error. If
any Bank's Proportionate Share of any Revolving Loan Borrowing is not
in fact made available to Administrative Agent by such Bank within
three (3) Business Days after the date of such Revolving Loan
Borrowing, Borrower shall pay to Administrative Agent, on demand, an
amount equal to such Proportionate Share together with interest
thereon, for each day from the date such amount was made available to
Borrower until the date such amount is repaid to Administrative Agent,
at the interest rate applicable at the time to the Revolving Loans
comprising such Revolving Loan Borrowing.
(c) Banks' Obligations Several. The failure of any Bank to
make the Revolving Loan to be made by it as part of any Revolving Loan
Borrowing shall not
17
relieve any other Bank of its obligation hereunder to make its
Revolving Loan on the date of such Revolving Loan Borrowing, but no
Bank shall be responsible for the failure of any other Bank to make the
Revolving Loan to be made by such other Bank on the date of any
Revolving Loan Borrowing.
2.09. Pro Rata Treatment.
(a) Borrowings, Commitment Reductions, Etc. Except as
otherwise provided herein:
(i) Each Revolving Loan Borrowing and each
participation in a Letter of Credit shall be made by the Banks
pro rata according to their respective Proportionate Shares at
the time of such Revolving Loan Borrowing or with respect to
such participation in Letters of Credit, in accordance with
Subparagraph 2.02(d)(ii) hereof;
(ii) Each reduction of the Total Revolving Loan
Commitment shall be applied to reduce the respective Revolving
Loan Commitments of the Banks as provided in Subparagraph
2.03(c);
(iii) Each payment of principal of and interest on
Revolving Loans in any Revolving Loan Borrowing shall be made
or shared among the Banks holding Revolving Loans in such
Revolving Loan Borrowing pro rata according to the respective
unpaid principal amounts of such Revolving Loans held by such
Banks;
(iv) Each Reimbursement Payment and interest payable
by Borrower thereon shall be shared among the Banks (including
Issuing Bank) which made or funded the applicable Drawing
Payment pro rata according to the respective amounts of such
Drawing Payment so made or funded by such Banks;
(v) Each payment of Revolving Loan Commitment Fees
and the Fee on Increased Commitment shall be shared among the
Banks pro rata according to their respective Proportionate
Shares provided that in the case of each Bank which becomes a
Bank hereunder after the date hereof, the Revolving Loan
Commitment Fees shall be shared with such Bank commencing on
the date upon which such Bank so became a Bank; and
(vi) Each payment of LC Usage Fees shall be shared
among the Banks (including Issuing Bank in its capacity as a
Bank) pro rata according to their respective Proportionate
Shares provided that in the case of each Bank which becomes a
Bank hereunder after the date hereof, the LC Usage Fees shall
be shared with such Bank commencing on the date upon which
such Bank so became a Bank; and
18
(vii) All other payments under this Restated Credit
Agreement and the other Credit Documents shall be for the
benefit of the Person or Persons specified.
(b) Sharing of Payments, Etc.
(i) If any Bank shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) on account of Revolving Loans or
Reimbursement Obligations owed to it in excess of its ratable
share of payments on account of such Revolving Loans obtained
by all Banks entitled to such payments, such Bank shall
forthwith purchase an assignment from the other Banks entitled
to such excess payments in the Revolving Loans as shall be
necessary to cause such purchasing Bank 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 Bank, such purchase shall be
rescinded and each other Bank shall repay to the purchasing
Bank the purchase price to the extent of such recovery
together with an amount equal to such other Bank's ratable
share (according to the proportion of (i) the amount of such
other Bank's required repayment to (ii) the total amount so
recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of
the total amount so recovered.
(ii) Borrower agrees that any Bank so purchasing an
assignment from another Bank pursuant to this Subparagraph
2.09(b) may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of setoff) with
respect to such assignment as fully as if such Bank were the
direct creditor of Borrower in the amount of such assignment.
2.10. Change of Circumstances.
(a) Inability to Determine Rates. If, on or before the first
day of any Interest Period for any Revolving LIBOR Loan, (i) any Bank
shall advise Administrative Agent that the LIBO Rate for such Interest
Period cannot be adequately and reasonably determined due to the
unavailability of funds in or other circumstances affecting the London
interbank market or (ii) any Bank shall advise Administrative Agent
that the rates of interest for such Revolving LIBOR Loans do not
adequately and fairly reflect the cost to such Bank of making or
maintaining such Revolving LIBOR Loans, Administrative Agent shall
immediately give notice of such condition to Borrower. After the giving
of any such notice and until Administrative Agent shall otherwise
notify Borrower that the circumstances giving rise to such condition no
longer exist, Borrower's right to request the making of or conversion
to, and the Banks' obligations to make or convert to Revolving LIBOR
Loans shall be suspended. Any Revolving LIBOR Loans outstanding at the
commencement of any such suspension shall be converted at the end of
the then current Interest Period for such Revolving LIBOR Loans into
Revolving Prime Rate Loans unless such suspension has then ended.
19
(b) Illegality. If, after the date of this Restated Credit
Agreement the adoption of any Governmental Rule, any change in any
Governmental Rule or the application or requirements thereof (whether
such change occurs in accordance with the terms of such Governmental
Rule as enacted, as a result of amendment or otherwise), any change in
the interpretation or administration of any Governmental Rule by any
Governmental Authority, or compliance by any Bank with any request or
directive (whether or not having the force of law)of any Governmental
Authority (a "Change of Law") shall make it unlawful or impossible for
any Bank to make or maintain any Revolving LIBOR Loan, such Bank shall
immediately notify Administrative Agent and Borrower of such Change of
Law. Upon receipt of such notice, (i) Borrower's right to request the
making of or conversion to, and the Banks' obligations to make or
convert to, Revolving LIBOR Loans shall be terminated, and (ii)
Borrower shall, at the request of any Bank, either (A) pursuant to
Subparagraph 2.01(d) convert any such then outstanding Revolving LIBOR
Loans into Revolving Prime Rate Loans at the end of the current
Interest Period for such Revolving LIBOR Loans, or (B) immediately
repay or convert any such Revolving LIBOR Loans if any Bank shall
notify Borrower that the such Bank may not lawfully continue to fund
and maintain such Revolving LIBOR Loans. Any conversion or prepayment
of Revolving LIBOR Loans made pursuant to the preceding sentence prior
to the last day of an Interest Period for such Revolving LIBOR Loans
shall be deemed a prepayment thereof for purposes of Paragraph 2.12.
(c) Increased Costs. If, after the date of this Restated
Credit Agreement, any Change of Law:
(i) Shall subject any Bank to any tax, duty or other
charge with respect to any Revolving LIBOR Loan, or shall
change the basis of taxation of payments by Borrower to any
Bank on such a Revolving LIBOR Loan or in respect to such a
Revolving LIBOR Loan under this Restated Credit Agreement
(except for changes in the rate of taxation on the overall net
income of any Bank); or
(ii) Shall impose, modify or hold applicable any
reserve, special deposit or similar requirement against assets
held by, deposits or other liabilities in or for the account
of, advances or loans by, or any other acquisition of funds by
any Bank for any Revolving LIBOR Loan; or
(iii) Shall impose on any Bank any other condition
related to any Revolving LIBOR Loan or its Revolving Loan
Commitment;
And the effect of any of the foregoing is to increase the cost to such
Bank of making, renewing, or maintaining any such Revolving LIBOR Loan
or its Revolving Loan Commitment or to reduce any amount receivable by
such Bank hereunder (and, in the case of a Revolving LIBOR Loan, such
increased cost or reduced amount is not fully reflected in the LIBO
Rate applicable to such Revolving LIBOR Loan); then Borrower shall from
time to time, upon demand by such Bank, pay to such Bank additional
20
amounts sufficient to reimburse such Bank for such increased costs or
to compensate such Bank for such reduced amounts. A Bank shall demand
such additional amounts by delivering to Borrower a written certificate
which sets forth in reasonable detail the allocation of the increased
costs or reduced amounts to such Bank's Revolving LIBOR Loans or
Revolving Loan Commitment, as the case may be, and the calculations
from which such costs or amounts were derived, which certificate shall
constitute prima facie evidence of such increased costs or reduced
amounts.
(d) Capital Requirements. If, after the date of this Restated
Credit Agreement, any Bank determines that (i) any Change of Law
affects the amount of capital required or expected to be maintained by
such Bank or any Person controlling such Bank (a "Capital Adequacy
Requirement"), (ii) the amount of capital maintained by such Bank or
such Person which is attributable to or based upon the Revolving Loans,
the Letters of Credit, the Revolving Loan Commitments or this Restated
Credit Agreement must be increased as a result of such Capital Adequacy
Requirement (taking into account such Bank's or such Person's policies
with respect to capital adequacy) and (iii) in the case of increased
capital attributable to or based upon the Revolving Loans, the
increased costs to such Bank or such Person of such increased capital
is not fully reflected in the interest rates applicable to the
Revolving Loans hereunder and such Bank or such Person's capital as a
consequence of its Revolving Loan Commitments or the Revolving Loans
made by such Bank or such Person is reduced to a level below that which
such Bank or such Person, as the case may be, could have achieved but
for the occurrence of any such circumstance; then Borrower shall pay to
such Bank or such Person, upon demand of such Bank, such amounts as
such Bank or such Person shall determine are necessary to compensate
such Bank or such Person for the increased costs to such Bank or such
Person of such increased capital and for such reduction in rate of
return. A Bank shall demand such amounts by delivering to Borrower a
written certificate which sets forth in reasonable detail the
allocation of the increased costs to such Bank's Revolving Loans,
Letters of Credit, Revolving Loan Commitment or this Restated Credit
Agreement, as the case may be, and the calculations from which such
costs were derived, which certificate shall constitute prima facie
evidence of such increased costs.
2.11. Taxes on Payments.
(a) Payments Free of Taxes. All payments made by Borrower
under this Restated Credit Agreement and the other Credit Documents
shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority (except net income taxes and
franchise taxes in lieu of net income taxes imposed on any Agent or a
Bank as a result of a present or former connection between the
jurisdiction of the Governmental Authority imposing such tax and such
Agent or such Bank, excluding a connection arising solely from such
Agent or such Bank having executed, delivered or performed its
obligations or received a payment under, or enforced, this Restated
Credit Agreement or the other Credit Documents) (all
21
such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called "Taxes"). If any
Taxes are required to be withheld from any amounts payable to any Agent
or any Bank hereunder or under the other Credit Documents, the amounts
so payable to such Agent or such Bank shall be increased to the extent
necessary to yield to such Agent or such Bank (after payment of all
Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Restated Credit Agreement and
the other Credit Documents. Whenever any Taxes are payable by Borrower,
as promptly as possible thereafter, Borrower shall send to
Administrative Agent for its own account or for the account of such
other Agent or such Bank, as the case may be, a certified copy of an
original official receipt received by Borrower showing payment thereof.
If Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Administrative Agent the required
receipts or other required documentary evidence, Borrower shall
indemnify the Agents and the Banks for any incremental taxes, interest
or penalties that may become payable by any Agent or any Bank as a
result of any such failure. The agreements in this Subparagraph 2.11(a)
shall survive the termination of this Restated Credit Agreement.
(b) Withholding Exemption Certificates. On or prior to the
Effective Date (or the Assignment Effective Date in the case of any
Bank which becomes a Bank hereunder after the Effective Date), each
Bank which is not incorporated under the laws of the United States of
America or a state thereof shall deliver to Borrower and Administrative
Agent two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 (or successor applicable form), as the case
may be, certifying in each case that such Bank is entitled to receive
payments under this Restated Credit Agreement without deduction or
withholding of any United States federal income taxes. Each Bank which
delivers to Borrower and Administrative Agent a Form 1001 or 4224
pursuant to the immediately preceding sentence further undertakes to
deliver to Borrower and Administrative Agent two further copies of the
said letter and Form 1001 or 4224 (or successor applicable forms), or
other manner of certification or procedure, as the case may be, on or
before the date that any such letter or form expires or becomes
obsolete or after the occurrence of any event requiring a change in the
most recent letter and form previously delivered by it to Borrower and
Administrative Agent, and such extensions or renewals thereof as may
reasonably be requested by Borrower or Administrative Agent, certifying
in the case of a Form 1001 or 4224 that such Bank is entitled to
receive payments under this Restated Credit Agreement without deduction
or withholding of any United States federal income taxes, unless in any
such cases an event (including without limitation any change in treaty,
law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent a Bank from duly completing and
delivering any such letter or form with respect to it and such Bank
advises Borrower and Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United
States federal income tax. Borrower shall not be required to pay any
additional amounts to Administrative Agent or any Bank hereunder to the
extent that the obligation to pay such additional amounts would not
have arisen but for a failure by Administrative Agent
23
or such Bank to comply with the provisions of this Subparagraph 2.11(b)
or the last sentence of Subparagraph 8.05(c).
2.12. Funding Loss Indemnification. If Borrower shall (a)
repay or prepay any Revolving LIBOR Loan on any day other than the last
day of an Interest Period therefor (whether an optional prepayment, a
mandatory prepayment, a payment upon acceleration or otherwise), (b)
fail to borrow any Revolving LIBOR Loan for which a Notice of Revolving
Loan Borrowing has been delivered to Administrative Agent (whether as a
result of the failure to satisfy any applicable conditions or
otherwise) or (c) fail to convert any Revolving Prime Rate Loans into
Revolving LIBOR Loans in accordance with a Notice of Revolving Loan
Conversion delivered to Administrative Agent (whether as a result of
the failure to satisfy any applicable conditions or otherwise),
Borrower shall, upon demand by any Bank, reimburse such Bank and hold
such Bank harmless for all costs and losses actually incurred by such
Bank as a result of such repayment, prepayment or failure. Borrower
understands that such costs and losses may include, without limitation,
losses incurred by a Bank as a result of funding and other contracts
entered into by such Bank to fund or in connection with the funding of
a Revolving LIBOR Loan. A Bank shall demand such reimbursement by
delivering to Borrower a written certificate which sets forth in
reasonable detail the allocation of the costs and losses to such Bank's
Revolving Loans and the calculations from which such costs and losses
were derived, which certificate shall constitute prima facie evidence
of such costs and losses.
2.13. Security
(a) Security Agreements; Guaranties; Etc. on Effective Date On
the Effective Date, the Obligations shall be secured by the following:
(i) A Third Amended and Restated Security Agreement
in the form of Exhibit E, duly executed by Borrower (the
"Borrower Security Agreement");
(ii) A Third Amended and Restated Pledge Agreement in
the form of Exhibit F, duly executed by Borrower (the
"Borrower Pledge Agreement"); and
(iii) A Guaranty in the form of Exhibit G, duly
executed by Bell Canada (the "Bell Canada Guaranty").
(b) Additional Security Agreements; Guaranties; Etc. on the
Tenex Data Acquisition Effective Date On and after the Tenex Data
Acquisition Effective Date, the Obligations shall also be secured by
the following:
(i) A Pledge Agreement substantially in the form of
Exhibit H, duly executed by Bell Canada (the "Bell Canada
Pledge Agreement").
(ii) A Guaranty substantially in the form of Exhibit
I, duly executed by Bell-Tenex (the "Bell-Tenex Guaranty");
23
(iii) A Security Agreement substantially in the form
of Exhibit J, duly executed by Bell-Tenex (the "Bell-Tenex
Security Agreement"); and
(iv) One or more additional security agreements,
pledge agreements, guaranties and other instruments,
agreements, certificates, opinions and documents
(collectively, the "Bell-Tenex Canadian Security Documents")
as either Agent may request to grant, perfect, maintain,
protect and evidence security interests in favor of Collateral
Agent, for the benefit of the Banks, in any or all present and
future personal property of Bell-Tenex located in Canada prior
to the Liens (other than Permitted Liens) or other interests
of any Person.
(c) Additional Security Agreements; Guaranties; Etc. on the
Future Tech Acquisition Effective Date On and after the Future Tech
Acquisition Effective Date, the Obligations shall also be secured by
the following:
(i) A Guaranty substantially in the form of Exhibit
I, duly executed by Bell-Future Tech (the "Bell-Future Tech
Guaranty");
(ii) A Security Agreement substantially in the form
of Exhibit J, duly executed by Bell-Future Tech (the
"Bell-Future Tech Security Agreement"); and
One or more additional security agreements, pledge agreements,
guaranties and other instruments, agreements, certificates, opinions
and documents (collectively, the "Bell-Future Tech Security Documents")
as either Agent may request to grant, perfect, maintain, protect and
evidence security interests in favor of Collateral Agent, for the
benefit of the Banks, in any or all present and future personal
property of Bell-Future Tech prior to the Liens (other than Permitted
Liens) or other interests of any Person.
(d) Further Assurances. Borrower shall deliver to Collateral
Agent, and shall cause each of Bell Canada, Bell-Tenex and Bell-Future
Tech to deliver, such additional security agreements, pledge
agreements, guaranties and other instruments, agreements, certificates,
opinions and documents (including Uniform Commercial Code financing
statements and fixture filings and landlord waivers) as either Agent
may request to:
(i) Grant, perfect, maintain, protect and evidence
security interests in favor of Collateral Agent, for the
benefit of the Banks, in any or all present and future
personal property of Borrower and its Subsidiaries prior to
the Liens or other interests of any Person (other than
Permitted Liens); or
(ii) Otherwise establish, maintain, protect and
evidence the rights provided to Collateral Agent and the Banks
pursuant to the Security Documents.
Borrower shall fully cooperate with the Agents and perform all
additional acts reasonably requested by the Agents to effect the
purposes of this Paragraph 2.13.
24
SECTION III. CONDITIONS PRECEDENT.
3.01. Conditions Precedent to Initial Revolving Loans. The obligations
of the Banks to make the Revolving Loans in the initial Revolving Loan Borrowing
on or after the Effective Date are subject to receipt by Administrative Agent,
on or prior to the Effective Date, of (a) the Notice of Revolving Loan Borrowing
requesting such Revolving Loan Borrowing delivered in accordance with this
Restated Credit Agreement and (b) each item listed in Schedule 3.01, each in
form and substance satisfactory to Administrative Agent, and with sufficient
copies for, Administrative Agent, Collateral Agent and each Bank.
3.02. Conditions Precedent to Each Credit Event. The occurrence of each
Credit Event, including the initial Revolving Loan Borrowing on or after the
Effective Date, is subject to the further conditions that on the date such
Credit Event is to occur and after giving effect to such Credit Event, the
following shall be true and correct:
(a) The representations and warranties set forth in Paragraph
4.01 are true and correct in all material respects as if made on such
date;
(b) No Default or Event of Default has occurred and is
continuing or will result from such Credit Event;
(c) Each of the Credit Documents required to be delivered to
Administrative Agent, Collateral Agent or any Bank on or prior to such
date remains in full force and effect (except as otherwise agreed by
Administrative Agent in writing); and
(d) In the case of Credit Events consisting of Revolving Loan
Borrowings or the issuance of a Letter of Credit (or any amendment of a
Letter of Credit that increases its stated amount or extends its
maturity date), no material adverse change in the Eligible Accounts or
Eligible Inventory which comprises the Borrowing Base shall have
occurred since the later date of (i) the latest audit conducted by or
on behalf of Administrative Agent, Collateral Agent or any Bank, and
(ii) the most recent Borrowing Base Certificate.
The submission by Borrower to Administrative Agent or Issuing Bank, as the case
may be, of each Notice of Revolving Loan Borrowing, each Notice of Revolving
Loan Conversion, each LC Application and each Notice of Revolving Loan Interest
Period Selection shall be deemed to be a representation and warranty by Borrower
as of the date thereon as to the above.
3.03. Covenant to Deliver. Borrower agrees (not as a condition but as a
covenant) to deliver to Administrative Agent or Collateral Agent, as the case
may be, each item required to be delivered to Administrative Agent or Collateral
Agent, as the case may be, as a condition to the occurrence of any Credit Event
if such Credit Event occurs. Borrower expressly agrees that the occurrence of
any such Credit Event prior to the receipt by Administrative Agent or Collateral
Agent, as the case may be, of any such item shall not constitute a waiver by
Administrative Agent, Collateral Agent or any Bank of Borrower's obligation to
deliver such item.
25
SECTION IV. REPRESENTATIONS AND WARRANTIES.
4.01. Borrower's Representations and Warranties. In order to induce the
Agents and the Banks to enter into this Restated Credit Agreement, Borrower
hereby represents and warrants to the Agents and the Banks as follows:
(a) Due Incorporation, Qualification, etc. Each of Borrower
and its Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation; (ii) has the power and authority to own, lease and
operate its properties and carry on its business as now conducted; and
(iii) is duly qualified, licensed to do business and in good standing
as a foreign corporation in each jurisdiction where the failure to be
so qualified or licensed might have a Material Adverse Effect.
(b) Authority. The execution, delivery and performance by each
of Borrower and its Subsidiaries of each Credit Document executed, or
to be executed, by such Person and the consummation of the transactions
contemplated thereby (i) are within the power of such Person and (ii)
have been duly authorized by all necessary actions on the part of such
Person.
(c) Enforceability. Each Credit Document executed, or to be
executed, by each of Borrower and its Subsidiaries has been, or will
be, duly executed and delivered by such Person and constitutes, or will
constitute, a legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general application
relating to or affecting the enforcement of creditors' rights generally
and general principles of equity.
(d) Non-Contravention. The execution and delivery by each of
Borrower and its Subsidiaries of the Credit Documents executed, or to
be executed, by such Person and the performance and consummation of the
transactions contemplated thereby do not (i) violate any Requirement of
Law applicable to such Person; (ii) violate any provision of, or result
in the breach or the acceleration of, or entitle any other Person to
accelerate (whether after the giving of notice or lapse of time or
both), any Contractual Obligation of such Person; or (iii) result in
the creation or imposition of any Lien upon any property, asset or
revenue of such Person (except such Liens as may be created in favor of
any Agent or any Bank pursuant to this Restated Credit Agreement or the
other Credit Documents).
(e) Approvals. No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental
Authority or other Person (including, without limitation, the
shareholders of any Person) is required in connection with the
execution and delivery of the Credit Documents executed by Borrower or
its Subsidiaries and the performance and consummation of the
transactions contemplated thereby.
26
(f) No Violation or Default. Neither Borrower nor any of its
Subsidiaries is in violation of or in default with respect to (i) any
Requirement of Law applicable to such Person; (ii) any Contractual
Obligation of such Person (nor is there any waiver in effect which, if
not in effect, would result in such a violation or default), where, in
each case, such violation or default could have a Material Adverse
Effect. Without limiting the generality of the foregoing, neither
Borrower nor any of its Subsidiaries (A) has violated any Environmental
Laws, (B) has any liability under any Environmental Laws or (C) has
received notice or other communication of an investigation or is under
investigation by any Governmental Authority having authority to enforce
Environmental Laws, where such violation, liability or investigation
could have a Material Adverse Effect. No Event of Default or Default
has occurred and is continuing.
(g) Litigation. Except as set forth (with the dollar amounts
claimed) in Schedule 4.01(g), no actions (including, without
limitation, derivative actions), suits, proceedings or investigations
are pending or, to the knowledge of Borrower, threatened against
Borrower or any of its Subsidiaries at law or in equity in any court or
before any other Governmental Authority which (i) could (alone or in
the aggregate) have a Material Adverse Effect or (ii) seeks to enjoin,
either directly or indirectly, the execution, delivery or performance
by Borrower or any of its Subsidiaries of the Credit Documents or the
transactions contemplated thereby.
(h) Title. Borrower and its Subsidiaries own and have good and
marketable title in fee simple absolute to, or a valid leasehold
interest in, all their respective real properties and good title to
their other respective assets and properties as reflected in the most
recent Financial Statements delivered to Bank (except those assets and
properties disposed of in the ordinary course of business or otherwise
in compliance with this Restated Credit Agreement since the date of
such Financial Statements) and all respective assets and properties
acquired by Borrower and its Subsidiaries since such date (except those
disposed of in the ordinary course of business or otherwise in
compliance with this Restated Credit Agreement). Such assets and
properties are subject to no Lien, except for Permitted Liens.
(i) Financial Statements. The Financial Statements of Borrower
and its Subsidiaries which have been delivered to Administrative Agent
and the Banks, (i) are in accordance with the books and records of
Borrower and its Subsidiaries, which have been maintained in accordance
with good business practice; (ii) have been prepared in conformity with
GAAP; and (iii) fairly present the respective financial positions of
Borrower and its Subsidiaries at such date. Neither Borrower nor any of
its Subsidiaries has any contingent obligations, liability for taxes or
other outstanding obligations which are material in the aggregate,
except as disclosed in the audited Financial Statements of Borrower
dated December 31, 1997, furnished by Borrower to Administrative Agent
and the Banks prior to the date hereof, or in the Financial Statements
delivered to Administrative Agent and the Banks pursuant to
Subparagraph 5.01(a)(ii) or (iii).
27
(j) Equity Securities. The authorized Equity Securities of
Borrower consist of (i) 20,000,000 shares of common stock of which
approximately 8,832,665 shares are duly issued and outstanding, (ii)
10,000,000 shares of preferred stock none of which shares are duly
issued and outstanding, (iii) no warrants to purchase shares of common
stock are issued and outstanding, (iv) the Almo Warrant, (v) options to
purchase 1,720,785 shares of common stock, pursuant to the 1998 Stock
Option Plan, of which approximately 1,395,113 options are outstanding
and (vi) 251,674 shares of common stock reserved pursuant to the
Company's Employee Stock Purchase Plan. All outstanding Equity
Securities (except for the option to purchase common stock) of Borrower
are duly authorized, validly issued, fully paid and non-assessable.
There are no other outstanding subscriptions, options, conversion
rights, warrants or other agreements or commitments of any nature
whatsoever (firm or conditional) obligating Borrower to issue, deliver
or sell, or cause to be issued, delivered or sold, any additional
Equity Securities of Borrower, or obligating Borrower to grant, extend
or enter into any such agreement or commitment. All Equity Securities
of Borrower have been offered and sold in compliance with all federal
and state securities laws and all other Requirements of Law.
(k) No Agreements to Sell Assets. Neither Borrower nor any of
its Subsidiaries has any legal obligation, absolute or contingent, to
any Person to sell all or a substantial portion of the assets of
Borrower or its Subsidiaries (other than sales in the ordinary course
of business), or to effect any merger, consolidation or other
reorganization of Borrower or any of its Subsidiaries or to enter into
any agreement with respect thereto.
(l) Employee Benefit Plans.
(i) Based upon the latest valuation of each "employee
pension benefit plan" (within the meaning of section 3(2) of
ERISA) that either Borrower or any ERISA Affiliate maintains
or contributes to, or has any obligation under (which
valuation occurred within twelve months of the date of this
representation), the aggregate benefit liabilities of such
plan within the meaning of Section 4001 of ERISA did not
exceed the aggregate value of the assets of such plan. Neither
Borrower nor any ERISA Affiliate has any liability with
respect to any post-retirement benefit under any Employee
Benefit Plan which is a welfare plan (as defined in section
3(1) of ERISA), other than liability for health plan
continuation coverage described in Part 6 of Title I(B) of
ERISA, which liability for health plan contribution coverage
will not have a Material Adverse Effect.
(ii) Each Employee Benefit Plan complies, in both
form and operation, in all material respects, with its terms,
ERISA and the Code, and no condition exists or event has
occurred with respect to any such plan which would result in
the incurrence by either Borrower or any ERISA Affiliate of
any material liability, fine or penalty. Each Employee Benefit
Plan, related trust agreement, arrangement and commitment of
Borrower or any ERISA Affiliate is legally valid and binding
and in full force and effect. No Employee Benefit Plan is
being
28
audited or investigated by any government agency or is subject
to any pending or threatened claim or suit. Neither Borrower
nor any ERISA Affiliate nor any fiduciary of any Employee
Benefit Plan has engaged in a prohibited transaction under
section 406 of ERISA or section 4975 of the Code.
(iii) Neither Borrower nor any ERISA Affiliate
contributes to any Multiemployer Plan. Neither Borrower nor
any ERISA Affiliate has incurred any material liability
(including secondary liability) to any Multiemployer Plan as a
result of a complete or partial withdrawal from such
Multiemployer Plan under Section 4201 of ERISA or as a result
of a sale of assets described in Section 4204 of ERISA.
Neither Borrower nor any ERISA Affiliate has been notified
that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of Section 4241 or Section 4245
of ERISA or that any Multiemployer Plan intends to terminate
or has been terminated under Section 4041A of ERISA.
(m) Other Regulations. Neither Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act
of 1940, the Public Utility Holding Company Act of 1935, the Federal
Power Act, any state public utilities code or to any federal or state
statute or regulatory scheme which would limit its ability execute,
deliver and perform any of the Credit Documents executed or to be
executed by it.
(n) Patent and Other Rights. Borrower and its Subsidiaries
own, and have the full right to license without the consent of any
other Person, all patents, licenses, trademarks, trade names, trade
secrets, service marks, copyrights and all rights with respect thereto,
which are required to conduct their businesses as now conducted.
(o) Governmental Charges and Other Indebtedness. Borrower and
its Subsidiaries have filed or caused to be filed all tax returns which
are required to be filed by them. Borrower and its Subsidiaries have
paid, or made provision for the payment of, all taxes and other
Governmental Charges which have or may have become due pursuant to said
returns or otherwise and all other Indebtedness, except such
Governmental Charges or Indebtedness, if any, which are being contested
in good faith and as to which adequate reserves (determined in
accordance with GAAP) have been provided or which could not have a
Material Adverse Effect if unpaid.
(p) Margin Stock. Borrower owns no Margin Stock which, in the
aggregate, would constitute a substantial part of the assets of
Borrower, and no proceeds of any Revolving Loan will be used to
purchase or carry, directly or indirectly, and no Letter of Credit
shall be used to support the purchase of, any Margin Stock or to extend
credit, directly or indirectly, to any Person for the purpose of
purchasing or carrying any Margin Stock.
(q) Subsidiaries, etc. Set forth in Schedule 4.01(q) is a
complete list of all of Borrower's Subsidiaries, the jurisdiction of
incorporation of each, the classes of Equity Securities of each and the
number of shares and percentages of shares of each such class
29
owned directly or indirectly by Borrower. Except for such Subsidiaries,
Borrower has no Subsidiaries, is not a partner in any partnership or a
joint venturer in any joint venture.
(r) Solvency, Etc. Borrower and each of its Subsidiaries is
Solvent and, after the execution and delivery of the Credit Documents
and the consummation of the transactions contemplated thereby, will be
Solvent.
(s) Catastrophic Events. Neither Borrower nor any of its
Subsidiaries and none of their properties is or has been affected by
any fire, explosion, accident, strike, lockout or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or other casualty
that could have a Material Adverse Effect. There are no disputes
presently subject to grievance procedure, arbitration or litigation
under any of the collective bargaining agreements, employment contracts
or employee welfare or incentive plans to which Borrower or any of its
Subsidiaries is a party, and there are no strikes, lockouts, work
stoppages or slowdowns, or, to the best knowledge of Borrower,
jurisdictional disputes or organizing activity occurring or threatened
which could have a Material Adverse Effect.
(t) Burdensome Contractual Obligations, Etc. Neither Borrower
nor any of its Subsidiaries and none of their properties is subject to
any Contractual Obligation or Requirement of Law which could have a
Material Adverse Effect.
(u) No Material Adverse Effect. No event has occurred and no
condition exists which could reasonably be expected to have a Material
Adverse Effect.
(v) Year 2000 Compatibility. Borrower and its Subsidiaries
have reviewed the areas within their business and operations which
could be materially adversely affected by, and are taking all steps
Borrower and its Subsidiaries consider reasonably necessary to address
on a timely basis, the "Year 2000 Problem" (that is, the risk that
computer applications used by Borrower and its Subsidiaries may be
unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date on or after December 31,
1999), and have made related appropriate inquiry of material suppliers
and vendors. Based upon such review and program, Borrower believes that
the "Year 2000 Problem" will not have a Material Adverse Effect.
(w) Accuracy of Information Furnished. None of the Credit
Documents and none of the other certificates, statements or information
furnished to any Agent or any Bank by or on behalf of Borrower or any
of its Subsidiaries in connection with the Credit Documents or the
transactions contemplated thereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.02. Reaffirmation. Borrower shall be deemed to have reaffirmed, for
the benefit of the Banks and the Agents, each representation and warranty
contained in Paragraph 4.01 on and as of the date of each Credit Event.
30
SECTION V. COVENANTS.
5.01. Affirmative Covenants. Until the termination of this Restated
Credit Agreement and the satisfaction in full by Borrower of all Obligations,
Borrower will comply, and will cause compliance, with the following affirmative
covenants, unless Required Banks shall otherwise consent in writing:
(a) Financial Statements, Reports, etc. Borrower shall furnish
to Administrative Agent or if otherwise specified herein, Collateral
Agent (with a copy for each Bank to be forwarded by Administrative
Agent or Collateral Agent, respectively) the following, each in such
form and such detail as Administrative Agent or Collateral Agent, as
applicable, shall reasonably request:
(i) Within fifty (50) days after the last day of each
fiscal quarter of Borrower, (A) a copy of the Financial
Statements of Borrower for such quarter and for the fiscal
year to date (including consolidated Financial Statements for
Borrower and its Subsidiaries), certified by the president or
chief financial officer of Borrower to present fairly the
financial condition, results of operations and other
information reflected therein and to have been prepared in
accordance with GAAP (subject to year-end audit adjustments)
and (B) the Form 10-Q Report filed by Borrower with the
Securities and Exchange Commission for such quarter;
(ii) Within ninety-five (95) days after the close of
each fiscal year of Borrower, (A) copies of the audited
Financial Statements of Borrower for such year (including
consolidated Financial Statements for Borrower and its
Subsidiaries), prepared by independent certified public
accountants acceptable to Bank, (B) copies of the unqualified
opinions (or qualified opinions reasonably acceptable to the
Banks) and management letters delivered by such accountants in
connection with all such Financial Statements, (C)
certificates of all such accountants to Bank stating that in
making the examination necessary for their opinion they have
obtained no knowledge of any Event of Default or Default which
has occurred and is continuing, or if, in the opinion of such
accountants, an Event of Default or Default has occurred and
is continuing, a statement as to the nature thereof (or other
certificates of such accountants reasonably acceptable to
Required Banks) and (D) the Form 10-K Report filed by Borrower
with the Securities and Exchange Commission for such year;
(iii) Contemporaneously with the quarterly and
year-end financial statements required by the foregoing
clauses (i) and (ii), a certificate of the president or chief
financial officer of Borrower in such detail as Administrative
Agent may reasonably request which (A) sets forth the
calculations conducted to verify that Borrower is in
compliance with each of the financial covenants set forth in
Paragraph 5.02(m) and stating that no Event of Default and no
Default has occurred and is continuing, or, if any such Event
of Default or Default has occurred and is continuing, a
statement as to the nature thereof and what action
31
Borrower proposes to take with respect thereto, (B) states
that the Year 2000 remediation efforts of Borrower and its
Subsidiaries are proceeding as scheduled, and (C) indicates
whether an auditor, regulator or third party consultant has
issued a management letter or other communication regarding
any Material Adverse Effect the Year 2000 exposure, program or
progress could have on Borrower and its Subsidiaries taken as
a whole;
(iv) As soon as available and in no event later than
twenty (20) days after the last day of each fiscal month, to
Collateral Agent (A) agings of Borrower's and its
Subsidiaries' accounts receivable and accounts payable as of
the last day of each month, (B) a report of Borrower's and its
Subsidiaries' inventory as of the last day of such month, and
(C) a certificate in the form of Exhibit K (or other form
acceptable to Collateral Agent), appropriately completed (a
"Borrowing Base Certificate"), which sets forth the
calculation of the Borrowing Base as of such last day of such
month, certified by the chief financial officer or treasurer
of Borrower;
(v) As soon as possible and in no event later than
five (5) Business Days after any officer of Borrower knows of
the occurrence or existence of (A) any Reportable Event under
any Employee Benefit Plan or Multiemployer Plan; (B) any
actual or threatened litigation, suits, claims or disputes
against Borrower or any of its Subsidiaries involving
potential monetary damages payable by Borrower or any of its
Subsidiaries of $1,000,000 or more (alone or in the
aggregate); (C) any other event or condition which could
reasonably be expected to have a Material Adverse Effect; or
(D) any Event of Default or Default; the statement of the
president or chief financial officer of Borrower setting forth
details of such event, condition, Event of Default or Default
and the action which Borrower proposes to take with respect
thereto;
(vi) As soon as possible and in no event later than
five (5) Business Days after they are sent, made available or
filed, copies of all registration statements and reports filed
by Borrower with the Securities and Exchange Commission
(including 8Q reports) and all reports, proxy statements and
financial statements sent or made available by Borrower to its
shareholders generally;
(vii) As soon as possible and in no event later than
five (5) Business Days after they are filed, copies of all IRS
Form 5500 reports for all Employee Benefit Plans required to
file such form; and
(viii) Such other instruments, agreements,
certificates, opinions, statements, documents and information
relating to the operations or condition (financial or
otherwise) of Borrower or any of its Subsidiaries, and
compliance by Borrower and its Subsidiaries with the terms of
this Restated Credit Agreement and the other Credit Documents
as any Agent may from time to time reasonably request.
32
(b) Books and Records. Borrower and its Subsidiaries shall at
all times keep proper books of record and account in which full, true
and correct entries will be made of their transactions in accordance
with GAAP.
(c) Inspections. Borrower and its Subsidiaries shall permit
any Person designated by Collateral Agent in its sole discretion
(including without limitation any Bank that so requests, which request
shall not be unreasonably denied), upon reasonable notice and during
normal business hours, to visit and inspect any of the properties and
offices of Borrower and its Subsidiaries, to conduct audits of any or
all of the Collateral at Borrower's expense, to examine the books of
account of Borrower and its Subsidiaries and to discuss the affairs,
finances and accounts of Borrower and its Subsidiaries with, and to be
advised as to the same by, their officers, auditors and accountants,
all at such times and intervals as Collateral Agent may reasonably
request, including, without limitation, an annual audit of the accounts
and inventory of Borrower and its Subsidiaries, the fees and expenses
of which shall be payable by Borrower pursuant to Subparagraph 8.02(b).
Audit fees payable by Borrower in connection with audits of all or any
portion of the Collateral shall be charged at a rate of $750 per day
per person plus direct costs of travel, lodging and out-of-pocket
expenses.
(d) Insurance. Each of Borrower and its Subsidiaries shall (i)
insure its inventory against such risks, in such amounts and with such
insurers satisfactory to the Banks; (ii) carry and maintain additional
insurance of the types and in the amounts customarily carried from time
to time during the term of this Restated Credit Agreement by others
engaged in substantially the same business as such Person and operating
in the same geographic area as such Person, including fire, public
liability, property damage and worker's compensation, such insurance to
be carried with companies and in amounts satisfactory to the Banks;
(iii) name Collateral Agent as additional insured or loss payee, as
appropriate, on all such insurance; and (iv) deliver to Collateral
Agent from time to time, as Collateral Agent may request, schedules
setting forth all insurance then in effect and policy endorsements for
such insurance naming Collateral Agent as additional insured or loss
payee.
(e) Governmental Charges and Other Indebtedness. Borrower and
its Subsidiaries shall promptly pay and discharge before delinquent (i)
all taxes and other Governmental Charges prior to the date upon which
penalties accrue thereon, except such Governmental Charges as may in
good faith be contested or disputed by appropriate proceedings,
provided that in each such case appropriate reserves are maintained in
accordance with GAAP, (ii) all Indebtedness which, if unpaid, could
become a Lien upon the property of Borrower or its Subsidiaries and
(iii) all other Indebtedness which, if unpaid, could have a Material
Adverse Effect, except such Indebtedness as may in good faith be
contested or disputed by appropriate proceedings, or for which
arrangements for deferred payment have been made, provided that in each
such case appropriate reserves are maintained in accordance with GAAP.
33
(f) Use of Proceeds. Borrower shall use the proceeds of the
Revolving Loans only for the purposes set forth in Subparagraph 2.01(g)
and Borrower shall request the issuance of Letters of Credit only for
the purposes set forth in Subparagraph 2.02(a)(ii). Borrower shall not
use any part of the proceeds of any Revolving Loan or any Letter of
Credit, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock or for the purpose of purchasing or carrying
or trading in any securities under such circumstances as to involve
Borrower or Bank in a violation of Regulations T, U or X issued by the
Federal Reserve Board.
(g) General Business Operations. Each of Borrower and its
Subsidiaries shall (i) preserve and maintain its corporate existence
and all of its rights, privileges and franchises reasonably necessary
to the conduct of its business, (ii) conduct its business activities in
compliance with all Requirements of Law and Contractual Obligations
applicable to such Person, the violation of which could have a Material
Adverse Effect, (iii) keep all property useful and necessary in its
business in good working order and condition, ordinary wear and tear
excepted, and (iv) not change its chief executive office and principal
place of business from San Jose, California without ninety (90) days
prior written notice to Collateral Agent.
(h) Landlord Waivers and Consents. Borrower shall use its best
efforts to obtain such landlord waivers and consents, in form and
substance satisfactory to Collateral Agent, as Collateral Agent may
from time to time request pursuant to which each such landlord shall
acknowledge Collateral Agent's and the Banks' senior security interest
in all of Borrower's and its Subsidiaries' inventory stored at such
locations, disclaim any interest in such inventory and agree to provide
Collateral Agent on behalf of the Banks access to remove such
inventory.
(i) Year 2000 Compatibility. Borrower and its Subsidiaries
shall take all acts reasonably necessary to ensure that all software,
hardware, firmware, equipment, goods and systems utilized by or
material to their business, operations or financial condition will
properly perform date sensitive functions before, during and after the
year 2000. At the request of Administrative Agent, Borrower shall
provide to Administrative Agent such certifications or other evidence
of compliance with this Subparagraph 5.01(i) as Administrative Agent
may from time to time require.
(j) Tenex-Data Acquisition. On or prior to the Tenex Data
Acquisition Effective Date, Borrower shall obtain and deliver to
Administrative Agent each item listed in Schedule 5.01(j), each in form
and substance reasonably satisfactory to the Agents, and with
sufficient copies for, the Agents and each Bank.
(k) Inventory Appraisal. Borrower covenants that it will
complete and deliver to the Collateral Agent and the Banks an inventory
appraisal, in form and substance satisfactory to the Collateral Agent
and the Banks, within 90 days of the Fourth Amendment Effective Date.
34
5.02. Negative Covenants. Until the termination of this Restated Credit
Agreement and the satisfaction in full by Borrower of all Obligations, Borrower
will comply, and will cause compliance, with the following negative covenants,
unless Required Banks or Banks, as the case may be, shall otherwise consent in
writing:
(a) Indebtedness. Neither Borrower nor any of its Subsidiaries
shall create, incur, assume or permit to exist any Indebtedness except
for Permitted Indebtedness.
(b) Liens. Neither Borrower nor any of its Subsidiaries shall
create, incur, assume or permit to exist any Lien on or with respect to
any of its assets or property of any character, whether now owned or
hereafter acquired, except for Permitted Liens.
(c) Asset Dispositions. Neither Borrower nor any of its
Subsidiaries shall sell, lease, transfer or otherwise dispose of any of
its assets or property, whether now owned or hereafter acquired, except
in the ordinary course of its business.
(d) Mergers, Acquisitions, Etc. Neither Borrower nor any of
its Subsidiaries shall consolidate with or merge into any other Person
or permit any other Person to merge into it, or acquire all or
substantially all of the assets of any other Person, except that any
wholly-owned Subsidiary of Borrower may merge into Borrower or any
other wholly-owned Subsidiary of Borrower.
(e) Investments. Neither Borrower nor any of its Subsidiaries
shall make any Investment except for Permitted Investments.
(f) Dividends, Redemptions, Etc. Borrower shall not (i) pay
any dividends or make any distributions on its Equity Securities; (ii)
purchase, redeem, retire, defease or otherwise acquire for value any of
its Equity Securities; (iii) return any capital to any holder of its
Equity Securities as such; (iv) make any distribution of assets, Equity
Securities, obligations or securities to any holder of its Equity
Securities as such; or (v) set apart any sum for any such purpose;
except that Borrower may pay Permitted Dividends.
(g) Capital Expenditures. Borrower and its Subsidiaries shall
not pay or incur Capital Expenditures which exceed in aggregate in any
fiscal year $5,000,000.
(h) Change in Business. Neither Borrower nor any of its
Subsidiaries shall engage, either directly or indirectly through
Affiliates, in any business substantially different from and not
incidental to its present business.
(i) Indebtedness Payments. Neither Borrower nor any of its
Subsidiaries shall (i) make any payment on the Subordinated
Indebtedness; (ii) prepay, redeem, purchase, defease or otherwise
satisfy in any manner prior to the scheduled repayment thereof any
other Indebtedness for borrowed money (other than the Obligations) or
lease obligations; (iii) amend, modify or otherwise change the
subordination provisions of any Subordinated Indebtedness; or (iv)
amend, modify or otherwise change the terms of any
35
Subordinated Indebtedness or any other Indebtedness for borrowed money
(other than the Obligations) or lease obligations so as to accelerate
the scheduled repayment thereof.
(j) ERISA. Neither Borrower nor any ERISA Affiliate shall (i)
adopt or institute any Employee Benefit Plan that is an employee
pension benefit plan within the meaning of Section 3(2) of ERISA, (ii)
take any action which will result in the partial or complete
withdrawal, within the meanings of sections 4203 and 4205 of ERISA,
from a Multiemployer Plan, (iii) engage or permit any Person to engage
in any transaction prohibited by section 406 of ERISA or section 4975
of the Code involving any Employee Benefit Plan or Multiemployer Plan
which would subject either Borrower or any ERISA Affiliate to any tax,
penalty or other liability including a liability to indemnify, (iv)
incur or allow to exist any accumulated funding deficiency (within the
meaning of section 412 of the Code or section 302 of ERISA), (v) fail
to make full payment when due of all amounts due as contributions to
any Employee Benefit Plan or Multiemployer Plan, (vi) fail to comply
with the requirements of section 4980B of the Code or Part 6 of Title
I(B) of ERISA, or (vii) adopt any amendment to any Employee Benefit
Plan which would require the posting of security pursuant to section
401(a)(29) of the Code, where singly or cumulatively, the above would
have a Material Adverse Effect.
(k) Transactions With Affiliates. Neither Borrower nor any of
its Subsidiaries shall enter into any Contractual Obligation with any
Affiliate or engage in any other transaction with any Affiliate except
that Borrower and its Subsidiaries may (i) sell assets to each other
for fair value and (ii) engage in other transactions with each other or
with Affiliates upon terms at least as favorable to Borrower and its
Subsidiaries as arms-length transactions with unaffiliated Persons.
(l) Accounting Changes. Neither Borrower nor any of its
Subsidiaries shall change (i) its fiscal year (currently January 1
through December 31) or (ii) its accounting practices except as
required by GAAP.
(m) Financial Covenants. Borrower shall not permit:
(i) Its Quick Ratio to be less than 0.50 to 1.00 for
any fiscal quarter;
(ii) Its Working Capital to be less than $60,000,000
for any fiscal quarter;
(iii) Its Tangible Net Worth, for any fiscal quarter,
to be less than the sum of (1) $70,000,000 plus (2) fifty
percent (50%) of the sum of Borrower's Net Income After Tax
for each quarter (excluding any quarter in which such amount
was negative) beginning with the quarter ending June 30, 1998
plus (3) one hundred percent (100%) of the Net Proceeds
derived from any issuance by Borrower of Equity Securities
minus (4) the net book value assigned to the Almo Warrants in
accordance with GAAP;
36
(iv) Its Leverage Ratio to be greater than 3.50 to
1.00 for any fiscal quarter;
(v) Its Interest Coverage Ratio (A) for the three
quarter period beginning on April 1, 1998 and ending on
December 31, 1998 to be less than 2.00 to 1.00; and (B) for
any consecutive four-quarter period thereafter to be less than
2:00 to 1:00; or
(vi) Its Net Operating Income or Net Income After Tax
to be (1) a loss in excess of $350,000 for any quarter or (2)
a loss of any amount for any consecutive two-quarter period.
SECTION VI. DEFAULT.
6.01. Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:
(a) Borrower shall fail to pay when due any principal,
interest or other payment required under the terms of this Restated
Credit Agreement or any of the other Credit Documents; or
(b) Borrower or any of its Subsidiaries shall fail to observe
or perform any covenant, obligation, condition or agreement set forth
in clause (v)(D) of Subparagraph 5.01(a), Subparagraph 5.01(c) (but
only to the extent Borrower denies such right to conduct inspections to
Collateral Agent acting on behalf of the Banks), Subparagraph 5.01(d)
or Paragraph 5.02; or
(c) Borrower or any of its Subsidiaries shall fail to observe
or perform any other covenant, obligation, condition or agreement
contained in this Restated Credit Agreement or the other Credit
Documents and such failure shall continue for ten (10) days; or
(d) Any representation, warranty, certificate, or other
statement (financial or otherwise) made or furnished by or on behalf of
Borrower or any of its Subsidiaries to any Agent or any Bank in or in
connection with this Restated Credit Agreement or any of the other
Credit Documents, or as an inducement to any Agent or any Bank to enter
into this Restated Credit Agreement, shall be false, incorrect,
incomplete or misleading in any material respect when made or
furnished; or
(e) Borrower or any of its Subsidiaries shall fail to make any
payment when due under the terms of any bond, debenture, note or other
evidence of Indebtedness to be paid by such Person (excluding this
Restated Credit Agreement and the other Credit Documents but including
any other evidence of Indebtedness of Borrower or any of its
Subsidiaries to any Bank) and such failure shall continue beyond any
period of grace provided with respect thereto, or shall default in the
observance or performance of any other agreement, term or condition
contained in any such bond, debenture, note or other
37
evidence of Indebtedness, and the effect of such failure or default is
to cause, or permit the holder or holders thereof to cause Indebtedness
in an aggregate amount of $200,000 or more to become due prior to its
stated date of maturity; or
(f) Borrower or any of its Subsidiaries shall (i) apply for or
consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property,
(ii) be unable, or admit in writing its inability, to pay its debts
generally as they mature, (iii) make a general assignment for the
benefit of its or any of its creditors, (iv) be dissolved or liquidated
in full or in part, (v) become insolvent (as such term may be defined
or interpreted under any applicable statute), (vi) commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or consent
to any such relief or to the appointment of or taking possession of its
property by any official in an involuntary case or other proceeding
commenced against it, or (vi) take any action for the purpose of
affecting any of the foregoing; or
(g) Proceedings for the appointment of a receiver, trustee,
liquidator or custodian of Borrower or any of its Subsidiaries or of
all or a substantial part of the property thereof, or an involuntary
case or other proceedings seeking liquidation, reorganization or other
relief with respect to Borrower or any of its Subsidiaries or the debts
thereof under any bankruptcy, insolvency or other similar law now or
hereafter in effect shall be commenced and an order for relief entered
or such proceeding shall not be dismissed or discharged within sixty
(60) days of commencement; or
(h) A final judgment or order for the payment of money in
excess of $200,000 (exclusive of amounts covered by insurance issued by
an insurer not an Affiliate of Borrower) shall be rendered against
Borrower or any of its Subsidiaries and the same shall remain
undischarged and unpaid for a period of thirty (30) days during which
execution shall not be effectively stayed, or any judgment, writ,
assessment, warrant of attachment, or execution or similar process
shall be issued or levied against a substantial part of the property of
Borrower or any of its Subsidiaries and such judgment, writ, or similar
process shall not be released, stayed, vacated or otherwise dismissed
within thirty (30) days after issue or levy; or
(i) Any Credit Document or any material term thereof shall
cease to be, or be asserted by Borrower or any of its Subsidiaries not
to be, a legal, valid and binding obligation of Borrower or its
Subsidiaries enforceable in accordance with its terms; or
(j) Any Reportable Event occurs which constitutes grounds for
the termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee to administer any Employee Benefit Plan, or
any Employee Benefit Plan shall be terminated within the meaning of
Title IV of ERISA or a trustee shall be appointed to administer any
Employee Benefit Plan; or
38
(k) One or more conditions exist or events have occurred which
might reasonably indicate, or reasonably result in, a Material Adverse
Effect.
6.02. Remedies. Upon the occurrence or existence of any Event of
Default (other than an Event of Default referred to in Subparagraph 6.01(f) or
6.01(g)) and at any time thereafter during the continuance of such Event of
Default, Administrative Agent may, with the consent of the Required Banks, or
shall, upon instructions from the Required Banks, by written notice to Borrower,
(a) terminate the Revolving Loan Commitments, the LC Commitment and the
obligations of the Banks and the Issuing Bank to make Revolving Loans, or issue
Letters of Credit, as the case may be, (b) declare all outstanding Obligations
payable by Borrower hereunder to be immediately due and payable without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the Notes to the
contrary notwithstanding, and/or (c) direct Borrower to deliver to
Administrative Agent funds in an amount equal to the aggregate stated amount of
all outstanding Letters of Credit. Upon the occurrence or existence of any Event
of Default described in Subparagraph 6.01(f) or 6.01(g), immediately and without
notice, (1) the Revolving Loan Commitments, the LC Commitment and the
obligations of the Banks and Issuing Bank to make Revolving Loans or issue
Letters of Credit, as the case may be, shall automatically terminate and (2) all
outstanding Obligations payable by Borrower hereunder shall automatically become
immediately due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived, anything contained
herein or in the Notes to the contrary notwithstanding. In addition to the
foregoing remedies, upon the occurrence or existence of any Event of Default,
Administrative Agent may exercise any right, power or remedy permitted to it by
law, either by suit in equity or by action at law, or both. Immediately after
taking any action under this Paragraph 6.02, Administrative Agent shall notify
each Bank of such action.
SECTION VII. THE AGENTS AND RELATIONS AMONG BANKS.
7.01. Appointment, Powers and Immunities. Each Bank hereby appoints and
authorizes Administrative Agent and Collateral Agent to act as its agent
hereunder and under the other Credit Documents with such powers as are expressly
delegated to Administrative Agent or Collateral Agent by the terms of this
Restated Credit Agreement and the other Credit Documents, together with such
other powers as are reasonably incidental thereto. Neither Administrative Agent
nor Collateral Agent shall have any duties or responsibilities except those
expressly set forth in this Restated Credit Agreement or in any other Credit
Document, be a trustee for any Bank or have any fiduciary duty to any Bank.
Notwithstanding anything to the contrary contained herein, neither
Administrative Agent nor Collateral Agent shall be required to take any action
which is contrary to this Restated Credit Agreement or any other Credit Document
or applicable law. Neither Administrative Agent nor Collateral Agent nor any
Bank shall be responsible to any other Agent or Bank for any recitals,
statements, representations or warranties made by Borrower or any Subsidiary
contained in this Restated Credit Agreement or in any other Credit Document, for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Restated Credit Agreement, or any other Credit Document or for any
failure by Borrower or any Subsidiary to perform their respective obligations
hereunder or thereunder. Administrative Agent and Collateral Agent may employ
agents and attorneys-in-fact and shall
39
not be responsible to any other Agent or Bank for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
Neither Administrative Agent nor Collateral Agent nor any of their respective
directors, officers, employees or agents shall be responsible to any other Agent
or any Bank for any action taken or omitted to be taken by it or them hereunder
or under any other Credit Document or in connection herewith or therewith,
except for its or their own gross negligence or willful misconduct. Except as
otherwise provided under this Restated Credit Agreement, Administrative Agent
and Collateral Agent shall take such action with respect to the Credit Documents
as shall be directed by the Required Banks.
7.02. Reliance by Agents. Administrative Agent and Collateral Agent
shall be entitled to rely upon any certificate, notice or other document
(including any cable, telegram, facsimile or telex) reasonably believed by it in
good faith to be genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by Administrative
Agent and Collateral Agent with reasonable care. As to any other matters not
expressly provided for by this Restated Credit Agreement, neither Administrative
Agent nor Collateral Agent shall be required to take any action or exercise any
discretion, but shall be required to act or to refrain from acting upon
instructions of the Required Banks and shall in all cases be fully protected by
the Banks in acting, or in refraining from acting, hereunder or under any other
Credit Document in accordance with the instructions of the Required Banks, and
such instructions of the Required Banks and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.
7.03. Defaults. Neither Administrative Agent nor any Collateral Agent
shall be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default unless Administrative Agent and Collateral Agent have received
a notice from any other Agent, a Bank or Borrower, referring to this Restated
Credit Agreement, describing such Default or Event of Default and stating that
such notice is a "Notice of Default". If Administrative Agent or Collateral
Agent receives such a notice of the occurrence of a Default or Event of Default,
such Agent shall give prompt notice thereof to the other Agent and the Banks.
Administrative Agent and Collateral Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Banks or all of the Banks if unanimity is required; provided, however, that
until Administrative Agent and Collateral Agent shall have received such
directions, Administrative Agent and Collateral Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as they shall deem advisable in the best
interest of the Banks.
7.04. Indemnification. Without limiting the Obligations of Borrower
hereunder, each Bank agrees to indemnify Administrative Agent and Collateral
Agent, ratably in accordance with their Proportionate Shares, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may at
any time be imposed on, incurred by or asserted against Administrative Agent and
Collateral Agent in any way relating to or arising out of this Restated Credit
Agreement or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof or of any such other documents; provided, however, that
no Bank shall be liable for any of the foregoing to the extent
40
they arise from Administrative Agent's and/or Collateral Agent's gross
negligence or willful misconduct. Administrative Agent and Collateral Agent
shall be fully justified in refusing to take or to continue to take any action
hereunder unless it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.
7.05. Non-Reliance. Each Bank represents that it has, independently and
without reliance on Administrative Agent, Collateral Agent, or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of the financial condition and affairs of Borrower and the
Subsidiaries and decision to enter into this Restated Credit Agreement and
agrees that it will, independently and without reliance upon Administrative
Agent, Collateral Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action under this Restated
Credit Agreement. Neither Administrative Agent nor Collateral Agent nor any Bank
shall be required to keep informed as to the performance or observance by
Borrower or any Subsidiary of the obligations under this Restated Credit
Agreement or any other document referred to or provided for herein or to make
inquiry of, or to inspect the properties or books of Borrower or any Subsidiary.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by Administrative Agent and/or Collateral
Agent hereunder, neither Administrative Agent nor Collateral Agent nor any Bank
shall have any duty or responsibility to provide any other Agent or any Bank
with any credit or other information concerning Borrower or any Subsidiary,
which may come into the possession of any Agent, or such Bank or any of its or
their Affiliates. Administrative Agent and Collateral Agent shall provide each
Bank with copies of any Credit Documents and any other documents, instruments
and agreements delivered to Administrative Agent and/or Collateral Agent in
connection therewith requested by such Bank.
7.06. Resignation or Removal of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, Administrative Agent may resign at any time by giving notice thereof to
the Banks, and Administrative Agent may be removed at any time with or without
cause by the Required Banks. Upon any such resignation or removal, the Required
Banks shall have the right to appoint a successor Administrative Agent, which
Administrative Agent shall be reasonably acceptable to Borrower. If no successor
Administrative Agent shall have been appointed by the Required Banks and shall
have accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation or the Required Banks'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Banks, appoint a successor Administrative Agent,
which shall be a bank having a combined capital, surplus and retained earnings
of not less than U.S. $250,000,000 and which shall be reasonably acceptable to
Borrower. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section VII shall
continue in effect for
41
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Administrative Agent.
7.07. Resignation or Removal of Collateral Agent. Subject to the
appointment and acceptance of a successor Collateral Agent as provided below,
Collateral Agent may resign at any time by giving notice thereof to
Administrative Agent and the Banks, and Collateral Agent may be removed at any
time with or without cause by the Required Banks. Upon any such resignation or
removal, the Required Banks shall have the right to appoint a successor
Collateral Agent, which Collateral Agent shall be reasonably acceptable to
Borrower. If no successor Collateral Agent shall have been appointed by the
Required Banks and shall have accepted such appointment within thirty (30) days
after the retiring Collateral Agent's giving of notice of resignation or the
Required Banks' removal of the retiring Collateral Agent, then Administrative
Agent may, on behalf of the Banks, appoint a successor Collateral Agent, which
shall be a Bank under this Agreement and which shall be reasonably acceptable to
Borrower. Upon the acceptance of any appointment as Collateral Agent hereunder
by a successor Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Collateral Agent's resignation or removal hereunder as Collateral Agent, the
provisions of this Section VII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Collateral Agent.
7.08. Agents in their Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Borrower and its Subsidiaries and affiliates as though
such Agent were not an Agent hereunder. With respect to Revolving Loans made and
Letters of Credit issued, if any, by CB&T or UBOC as a Bank, CB&T and UBOC shall
have the same rights and powers under this Restated Credit Agreement and the
other Credit Documents as any other Bank and may exercise the same as though it
were not an Agent, and the terms "Bank" or "Banks" shall include CB&T and UBOC
in their individual capacity.
7.09. Co-Agents. None of the Banks identified herein as a "co-agent"
shall have any right, power, obligation, liability, responsibility or duty under
this Restated Credit Agreement or any other Credit Document other than those
applicable to all Banks as such. Without limiting the foregoing, none of the
Banks so identified as a "co-agent" shall have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks identified as a "co-agent" in
deciding to enter into this Restated Credit Agreement or in taking or not taking
action hereunder.
7.10. Assignment and Delegation. Collateral Agent may from time to time
(i) assign or transfer all or any portion of its rights, benefits or privileges
as "collateral agent" hereunder or under any of the other Credit Documents to
one or more Banks and/or (ii) delegate to or subcontract with, or authorize or
appoint one or more Banks to perform all or any portion of the duties, covenants
or obligations to be performed by Collateral Agent in its capacity as
"collateral agent" hereunder or under any of the other Credit Documents. Any
such other Bank shall be
42
entitled to all of the indemnities, immunities and other protective provisions
that Collateral Agent is entitled to hereunder as if such other Bank were named
as "Collateral Agent" hereunder. Collateral Agent shall not be responsible to
any other Agent or Bank for the negligence or misconduct of any such other Bank.
SECTION VIII. MISCELLANEOUS.
8.01. Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Borrower, any Bank or any Agent under this Restated Credit Agreement or the
other Credit Documents shall be in writing and faxed, mailed or delivered, if to
Borrower, Administrative Agent or Collateral Agent, at its respective facsimile
number or address set forth below, if to any Bank, at the address or facsimile
number specified beneath the heading "Address for Notices" under the name of
such Bank in Schedule I, or if to Issuing Bank, at the address or facsimile
number indicated in a notice given by Issuing Bank to the other parties from
time to time (or to such other facsimile number or address for any party as
indicated in any notice given by that party to the other party). All such
notices and communications shall be effective (a) when sent by Federal Express
or other overnight service of recognized standing, on the Business Day following
the deposit with such service; (b) when mailed, first class postage prepaid and
addressed as aforesaid through the United States Postal Service, upon receipt;
(c) when delivered by hand, upon delivery; and (d) when sent by facsimile, upon
confirmation of receipt; provided, however, that any notice delivered to
Administrative Agent or Issuing Bank under Section II shall not be effective
until received by such Person.
Administrative Agent: California Bank & Trust
320 California Street, Suite 600
San Francisco, CA 94104
Attn: Relationship Manager - Bell
Microproducts
Telephone: (415) 445-8725
Facsimile: (415) 296-9617
Collateral Agent: Union Bank of California, N.A.
Northern California Commercial Banking Group
350 California Street, 10th Floor
San Francisco, CA 94104
Attention: William Hinch
Vice President
Telephone: (415) 705-7028
Facsimile: (415) 705-7111
43
Borrower: Bell Microproducts Inc.
1941 Ringwood Avenue
San Jose, California 95131
Attention: Mr. Remo Canessa
Vice President, Chief Financial Officer
Telephone: (408) 467-2773
Facsimile: (408) 451-1632
Each Notice of Revolving Loan Borrowing, Notice of Revolving Loan Conversion or,
Notice of Revolving Loan Interest Period Selection or LC Application (or copy
thereof, as the case may be) shall be given by Borrower to Administrative Agent,
and in the case of an LC Application, to Issuing Bank, to the office of such
Person located at the address referred to above during Administrative Agent's
normal business hours; provided, however, that any such notice received by
Administrative Agent after 12:00 noon on any Business Day shall be deemed
received by Administrative Agent on the next Business Day. In any case where
this Restated Credit Agreement authorizes notices, requests, demands or other
communications by Borrower to any Agent or any Bank to be made by telephone or
facsimile, such Agent or Bank may conclusively presume that anyone purporting to
be a person designated in any incumbency certificate or other similar document
received by such Agent or Bank is such a person.
8.02. Expenses. Borrower shall pay within thirty (30) days of a written
demand therefor, whether or not any Revolving Loan is made or any Letter of
Credit is issued hereunder, (a) all reasonable fees and expenses, including
reasonable attorneys' fees and expenses, incurred by any Agent in connection
with the preparation, execution and delivery of, and the exercise of its duties
under, this Restated Credit Agreement and the other Credit Documents, and the
preparation, execution and delivery of amendments and waivers hereunder and
thereunder, (b) all reasonable fees and expenses, including reasonable
attorneys' fees and expenses, incurred by any Agent in connection with the
exercise of its duties (including permitted audits and inspections) under this
Restated Credit Agreement and the other Credit Documents, and (c) all reasonable
fees and expenses, including reasonable attorneys' fees and expenses, incurred
by any Agent and the Banks in the enforcement or attempted enforcement of any of
the Obligations or in preserving any of the Agent's or the Banks' rights and
remedies (including, without limitation, all such fees and expenses incurred in
connection with any "workout" or restructuring affecting the Credit Documents or
the Obligations or any bankruptcy or similar proceeding involving Borrower or
any of its Subsidiaries). As used herein, the term "reasonable attorneys' fees
and expenses" shall include, without limitation, allocable costs and expenses of
each Agent's and each Bank's in-house legal counsel and staff.
8.03. Indemnification. To the fullest extent permitted by law, Borrower
agrees to protect, indemnify, defend and hold harmless Agents and the Banks and
their respective directors, officers, employees, agents and any affiliate
thereof ("Indemnitees") from and against any liabilities, losses, damages or
expenses of any kind or nature and from any suits, claims or demands (including
in respect of or for reasonable attorney's fees and other expenses) arising on
account of or in connection with any matter or thing or action or failure to act
by Indemnitees, or any of them, arising out of or relating to the Credit
Documents, including without limitation any
44
use by Borrower of any proceeds of the Revolving Loans, except to the extent
such liability arises from the willful misconduct or gross negligence of (a) any
Agent acting on behalf of the Banks or (b) such Indemnitee. Upon receiving
knowledge of any suit, claim or demand asserted by a third party that any Agent
or any Bank believes is covered by this indemnity, such Agent or such Bank shall
give Borrower notice of the matter and an opportunity to defend it, at
Borrower's sole cost and expense, with legal counsel satisfactory to such Agent
or such Bank, as the case may be. Such Agent or such Bank may also require
Borrower to defend the matter. Any failure or delay of any Agent or any Bank to
notify Borrower of any such suit, claim or demand shall not relieve Borrower of
its obligations under this Paragraph 8.03 but shall reduce such obligations to
the extent of any increase in those obligations caused solely by an such
unreasonable failure or delay. The obligations of Borrower under this Paragraph
8.03 shall survive the payment and performance of the Obligations.
8.04. Waivers; Amendments. Any term, covenant, agreement or condition
of this Restated Credit Agreement or any other Credit Document may be amended or
waived if such amendment or waiver is in writing and is signed by Borrower and
the Required Banks; provided, however that:
(a) Any amendment, waiver or consent which (i) increases the
Total Revolving Loan Commitment, (ii) extends the Revolving Loan
Maturity Date, (iii) reduces the principal of or interest on any
Revolving Loan or any fees or other amounts payable for the account of
the Banks hereunder, (iv) increases the LC Commitment or extends the LC
Facility Expiration Date, (v) postpones any date fixed for any payment
of the principal of or interest on any Revolving Loans or Reimbursement
Obligations or any fees or other amounts payable for the account of the
Banks hereunder or thereunder, (v) amends this Paragraph 8.04, (vi)
amends the definition of Borrowing Base, Eligible Accounts, Eligible
Inventory or Required Banks, (vii) releases any part of the Collateral
other than an immaterial part of the Collateral, (viii) releases any
Guarantor from its Guaranty or decreases the amount of the obligations
guaranteed by such Guarantor under its Guaranty, or (ix) amends
Subparagraph 5.02(m) must be in writing and signed by all Banks;
(b) Any amendment, waiver or consent which increases or
decreases the Revolving Loan Commitment or Proportionate Share of any
Bank must be in writing and signed by such Bank;
(c) Any amendment, waiver or consent which increases the LC
Commitment or otherwise affects the rights or obligations of Issuing
Bank must be in writing and signed by Issuing Bank; and
(d) Any amendment, waiver or consent which affects the rights
of any Agent must be in writing and signed by such Agent.
No failure or delay by any Agent or any Bank in exercising any right hereunder
shall operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in
45
such waiver or consent, a waiver or consent given hereunder shall be effective
only in the specific instance and for the specific purpose for which given.
8.05. Successors and Assigns.
(a) Binding Effect. This Restated Credit Agreement and the
other Credit Documents shall be binding upon and inure to the benefit
of Borrower, the Banks, the Agents, all future holders of the Revolving
Loan Notes and their respective successors and permitted assigns,
except that Borrower may not assign or transfer any of its rights or
obligations under any Credit Document without the prior written consent
of the Agents and each Bank. All references in this Restated Credit
Agreement to any Person shall be deemed to include all successors and
assigns of such Person.
(b) Participations. Any Bank may, in the ordinary course of
its commercial lending business and in accordance with applicable law,
at any time sell to one or more banks or other financial institutions
("Participants") participating interests in any Revolving Loan owing to
such Bank, any Revolving Loan Note held by such Bank, any Revolving
Loan Commitment of such Bank or any other interest of such Bank under
this Restated Credit Agreement and the other Credit Documents without
the consent of any other party hereto; provided, however, that a Bank
may not sell a participation which would increase the Taxes payable by
Borrower under Paragraph 2.11 without the consent of Borrower. In the
event of any such sale by a Bank of participating interests to a
Participant, such Bank's obligations under this Restated Credit
Agreement to the other parties to this Restated Credit Agreement shall
remain unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of any such
Revolving Loan Note for all purposes under this Restated Credit
Agreement and Borrower and the Agents shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Restated Credit Agreement; provided, however,
that any agreement pursuant to which any Bank sells a participating
interest to a Participant may require the selling Bank to obtain the
consent of such Participant in order for such Bank to agree in writing
to any amendment of a type specified in clause (a)(i), (a)(ii),
(a)(iii) or (a)(iv) of Paragraph 8.04. Borrower also agrees that any
Bank which has transferred all or part of its interests in the
Revolving Loan Commitments and the Revolving Loans to one or more
Participants shall, notwithstanding any such transfer, be entitled to
the full benefits accorded such Bank under 2.10, Paragraph 2.11, and
Paragraph 2.12, as if such Bank had not made such transfer.
(c) Assignments. Any Bank may, in the ordinary course of its
commercial lending business and in accordance with applicable law, at
any time, sell and assign to any Bank, any affiliate of a Bank or any
other bank or financial institution (individually, an "Assignee Bank")
all or a portion of its rights and obligations under this Restated
Credit Agreement and the other Credit Documents (such a sale and
assignment to be referred to herein as an "Assignment") pursuant to an
assignment agreement in the form of Exhibit L (an "Assignment
Agreement"), executed by each Assignee Bank and such
46
assignor Bank (an "Assignor Bank") and delivered to Administrative
Agent for its acceptance and recording in the Register; provided,
however, that:
(i) Without the written consent of Borrower and
Administrative Agent (which consent of Borrower and
Administrative Agent shall not be unreasonably withheld), no
Bank may make any Assignment to any Assignee Bank which is
not, immediately prior to such Assignment, a Bank hereunder or
an affiliate which controls, is controlled by or is under
common control with a Bank hereunder;
(ii) Without the written consent of Borrower and
Administrative Agent (which consent of Borrower and
Administrative Agent shall not be unreasonably withheld), no
Bank may make any Assignment to any Assignee Bank unless,
after giving effect to such Assignment, (A) the Revolving Loan
Commitment of the Assignee Bank is $5,000,000 or an integral
multiple thereof and (B) the Revolving Loan Commitment of the
Assignor Bank is either (1) $0, if the Assignor Bank has
assigned its entire Revolving Loan Commitment, or (2)
$5,000,000 or an integral multiple thereof, if the Assignor
Bank has assigned less than its entire Revolving Loan
Commitment; and
(iii) No Bank may make any Assignment which does not
assign and delegate an equal pro rata interest in such Bank's
Revolving Loans, Revolving Loan Commitment and all other
rights, duties and obligations of such Bank under this
Restated Credit Agreement and the other Credit Documents.
Upon such execution, delivery, acceptance and recording of each
Assignment Agreement, from and after the Assignment Effective Date
determined pursuant to such Assignment Agreement, (A) each Assignee
Bank thereunder shall be a Bank hereunder with a Revolving Loan
Commitment as set forth on Attachment 1 to such Assignment Agreement
and shall have the rights, duties and obligations of such a Bank under
this Restated Credit Agreement and the other Credit Documents, and (B)
the Assignor Bank thereunder shall be a Bank with a Revolving Loan
Commitment as set forth on Attachment 1 to such Assignment Agreement,
or, if the Revolving Loan Commitment of the Assignor Bank has been
reduced to $0, the Assignor Bank shall cease to be a Bank; provided,
however, that any such Assignor Bank which ceases to be a Bank shall
continue to be entitled to the benefits of any provision of this
Restated Credit Agreement which by its terms survives the termination
of this Restated Credit Agreement. Each Assignment Agreement shall be
deemed to amend Schedule I to the extent, and only to the extent,
necessary to reflect the addition of each Assignee Bank, the deletion
of each Assignor Bank which reduces its Revolving Loan Commitment to
$0, and the resulting adjustment of Revolving Loan Commitments arising
from the purchase by each Assignee Bank of all or a portion of the
rights and obligations of an Assignor Bank under this Restated Credit
Agreement and the other Credit Documents. On or prior to the Assignment
Effective Date determined pursuant to each Assignment Agreement,
Borrower, at Assignor Bank's expense, shall execute and deliver to
Administrative Agent, in exchange for the surrendered Revolving Loan
Note of the Assignor Bank
47
thereunder, a new Revolving Loan Note to the order of each Assignee
Bank thereunder (with each new Revolving Loan Note to be in an amount
equal to the Revolving Loan Commitment assumed by such Assignee Bank)
and, if the Assignor Bank is continuing as a Bank hereunder, a new
Revolving Loan Note to the order of the Assignor Bank (with the new
Revolving Loan Note to be in an amount equal to the Revolving Loan
Commitment retained by it). Each such new Revolving Loan Note shall be
dated the Effective Date and otherwise be in the form of the Revolving
Loan Note replaced thereby (provided that Borrower shall not be
obligated to pay any additional interest to any Assignee Bank in
respect of any principal payments made prior to the Effective Date of
the Assignment to such Assignee Bank). The Revolving Loan Notes
surrendered by the Assignor Bank shall be returned by Administrative
Agent to Borrower marked "replaced". Each Assignee Bank which was not
previously a Bank hereunder and which is not incorporated under the
laws of the United States of America or a state thereof shall, within
three (3) Business Days of becoming a Bank, deliver to Borrower and
Administrative Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 (or successor applicable
form), as the case may be, certifying in each case that such Bank is
entitled to receive payments under this Restated Credit Agreement
without deduction or withholding of any United States federal income
taxes.
(d) Register. Administrative Agent shall maintain at its
address referred to in Paragraph 8.01 a copy of each Assignment
Agreement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Banks and the Revolving
Loan Commitments of each Bank from time to time. The entries in the
Register shall be conclusive in the absence of manifest error, and
Borrower, Administrative Agent and the Banks may treat each Person
whose name is recorded in the Register as the owner of the Revolving
Loans recorded therein for all purposes of this Restated Credit
Agreement. The Register shall be available for inspection by Borrower
or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(e) Registration. Upon its receipt of an Assignment Agreement
executed by an Assignor Bank and an Assignee Bank (and, to the extent
required by Subparagraph 8.05(c), by Borrower and Administrative
Agent), together with payment to Administrative Agent by the Assignor
Bank of a registration and processing fee of $2,500, Administrative
Agent shall (i) promptly accept such Assignment Agreement and (ii) on
the Effective Date of the Assignment determined pursuant thereto record
the information contained therein in the Register and give notice of
such acceptance and recordation to the Banks and Borrower.
Administrative Agent may, from time to time at its election, prepare
and deliver to the Banks and Borrower a revised Schedule I reflecting
the names, addresses and respective Revolving Loan Commitments of all
Banks then parties hereto.
(f) Collateral Security. Notwithstanding any other provision
contained in this Restated Credit Agreement and any other Credit
Document to the contrary, any Bank may assign all or any portion of the
Revolving Loans held by it to any Federal Reserve Bank or the United
States Treasury as collateral security, provided that any payment in
48
respect of such assigned Revolving Loan made by Borrower to or for the
account of the assigning or pledging Bank in accordance with the terms
of this Restated Credit Agreement shall satisfy Borrower's obligations
hereunder in respect of such assigned Revolving Loans to the extent of
such payment. No such assignment shall release the assigning Bank from
its obligations hereunder.
(g) Confidentiality. The Agents and the Banks may disclose the
Credit Documents and any financial or other information relating to
Borrower or any Subsidiary to each other or to any Participant or
Assignee Bank or potential Participant or Assignee Bank which is not a
direct competitor of Borrower and which agrees in writing to maintain
the confidentiality thereof in accordance with safe and sound lending
practices.
8.06. Setoff; Security Interest.
(a) Setoff. In addition to any rights and remedies of the
Banks provided by law, each Bank shall have the right without prior
notice to Borrower, any such notice being expressly waived by Borrower
to the extent permitted by applicable law, upon the occurrence and
during the continuance of a Default or an Event of Default, to set-off
and apply against any Obligations of Borrower to such Bank which are
then due and payable, any amount owing from such Bank to Borrower, at
or at any time after, the happening of any of the above mentioned
events, and as security for such Obligations, Borrower hereby grants to
each Bank a continuing security interest in any and all deposits,
accounts or moneys of Borrower then or thereafter maintained with such
Bank, subject in each case to Subparagraph 2.09(b). The aforesaid right
of set-off may be exercised by such Bank against Borrower or against
any trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver or execution, judgment or attachment
creditor of Borrower or against anyone else claiming through or against
Borrower or such trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Bank prior to the
occurrence of a Default or an Event of Default. Each Bank agrees
promptly to notify Borrower after any such set-off and application made
by such Bank, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
(b) Security Interest. As security for the Obligations,
Borrower hereby grants to each Bank, for the benefit of all Banks, a
continuing security interest in any and all deposit accounts or moneys
of Borrower now or hereafter maintained with such Bank. Each Bank shall
have all of the rights of a secured party with respect to such security
interest.
8.07. No Third Party Rights. Nothing expressed in or to be implied from
this Restated Credit Agreement is intended to give, or shall be construed to
give, any Person, other than the parties hereto and their permitted successors
and assigns hereunder, any benefit or legal or equitable right, remedy or claim
under or by virtue of this Restated Credit Agreement or under or by virtue of
any provision herein.
49
8.08. Partial Invalidity. If at any time any provision of this Restated
Credit Agreement is or becomes illegal, invalid or unenforceable in any respect
under the law or any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Restated Credit Agreement nor
the legality, validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby.
8.09. Arbitration.
(a) This Paragraph 8.09 concerns the resolution of any
controversies or claims between or among Borrower, any Bank and any
Agent, including but not limited to those that arise from:
(i) This Restated Credit Agreement or any other
Credit Document;
(ii) Any violation of this Restated Credit Agreement
or any other Credit Document; or
(iii) Any claims for damages resulting from any
business conducted between Borrower and any Bank or any Agent,
including claims for injury to persons, property or business
interests.
(b) At the request of Borrower, any Bank or any Agent, any
controversies or claims will be settled by arbitration in accordance
with the United States Arbitration Act. The United States Arbitration
Act will apply even though this Restated Credit Agreement provides that
it is governed by California law.
(c) Arbitration proceedings will be administered by the
American Arbitration Association and will be subject to its commercial
rules of arbitration. The arbitration will be conducted within the
California county of San Francisco. Borrower, the Banks and any Agent
expressly agree that the arbitrator(s) (i) shall apply contract law and
(ii) shall not be empowered to make any award which a California court
is not empowered to make or any award for punitive damages.
(d) For purposes of the application of the statute of
limitations, the filing of an arbitration pursuant to this paragraph is
the equivalent of the filing of a lawsuit, and any claim or controversy
which may be arbitrated under this paragraph is subject to any
applicable statute of limitations. The arbitrators will have the
authority to decide whether any such claim or controversy is barred by
the statute of limitations and if so to dismiss the arbitration on that
basis.
(e) If there is a dispute as to whether an issue is
arbitrable, the arbitrators will have the authority to resolve any such
dispute.
(f) The decision that results from an arbitration proceeding
may be submitted to any authorized court of law to be confirmed and
enforced.
50
(g) The procedure described above will not apply if the
controversy or claim, at the time of the proposed submission to
arbitration arises from or relates to an obligation to Bank secured by
real property located in California. If the obligation is secured by
real property, Borrower, each Bank and each Agent must consent to
submission of the claim or controversy to arbitration. If all parties
do not consent to arbitration, the controversy or claim will be settled
as follows:
(i) Borrower, the Banks and the Agents will designate
a referee (or a panel of referees) selected under the auspices
of the American Arbitration Association in the same manner as
arbitrators are selected in Association-sponsored proceedings;
(ii) The designated referee (or the panel of
referees) will be appointed by a court as provided in
California Code of Civil Procedure Section 638 and the
following related sections;
(iii) The referee (or the presiding referee of the
panel) will be an active attorney or a retired judge; and
(iv) The award that results from the decision of the
referee (or the panel) will be entered as a judgment in the
court that appointed the referee, in accordance with the
provisions of California Code of Civil Procedure Sections 644
and 645.
(h) This Paragraph 8.09 does not limit the right of Borrower,
any Bank or any Agent to:
(i) Exercise self-help remedies such as setoff;
(ii) Foreclose against or sell any real or personal
property collateral; or
(iii) Take action in a court of law, before, during
or after the arbitration proceeding to obtain an interim
remedy or additional or supplementary remedies.
(i) The pursuit of or a decision in an action for interim,
additional or supplementary remedies, or the filing of a court action,
does not constitute a waiver of the right of Borrower, any Bank or any
Agent, including the suing party, to submit the controversy or claim to
arbitration.
8.10. Jury Trial. EACH OF BORROWER, THE BANKS AND THE AGENTS, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS RESTATED CREDIT AGREEMENT OR ANY
OTHER CREDIT DOCUMENT NOT RESOLVED PURSUANT TO PARAGRAPH 8.09.
51
8.11. Counterparts. This Restated Credit Agreement may be executed in
any number of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for all
purposes.
SECTION IX. EFFECTIVE DATE OF RESTATED CREDIT AGREEMENT.
9.01. Effective Date. This Restated Credit Agreement shall become
effective on a Business Day on or prior to November 12, 1998 as designated by
Borrower in a written notice to Administrative Agent (the "Effective Date"),
subject to receipt by Administrative Agent (a) at least three (3) Business days
prior to the Effective Date of Borrower's written notice designating the
Effective Date and (b) on or prior to the Effective Date, of each item listed in
Schedule 3.01, each in form and substance reasonably satisfactory to the Banks,
and with sufficient copies for, each Agent and each Bank.
9.02. Loans Under Existing Credit Agreement. On the Effective Date, all
loans outstanding under the Existing Credit Agreement shall be deemed to be
Revolving Loans made by each of the Banks under this Restated Credit Agreement,
and all accrued unpaid interest thereon shall begin to accrue interest at the
rates set forth in this Restated Credit Agreement.
9.03. Effect. On and after the Effective Date, this Restated Credit
Agreement, the Borrower Security Agreement and the Borrower Pledge Agreement
shall amend, restate in their entirety and replace, without novation, the
Existing Credit Agreement, the Amended and Restated Security Agreement dated as
of May 23, 1995 executed by Borrower in favor of Administrative Agent (the
"Existing Borrower Security Agreement") and the Amended and Restated Pledge
Agreement dated as of May 23, 1995 executed by Borrower in favor of
Administrative Agent (the "Existing Borrower Pledge Agreement"), respectively;
provided, however, that the execution and delivery of this Restated Credit
Agreement, the Borrower Security Agreement and the Borrower Pledge Agreement and
the other Credit Documents shall not (a) operate as a waiver of any right, power
or remedy of the Banks under the Existing Credit Agreement, the Existing
Security Agreement or the Existing Pledge Agreement, except to the extent
expressly waived in this Restated Credit Agreement, the Borrower Security
Agreement, the Borrower Pledge Agreement or the other Credit Documents, or (b)
extinguish or impair any obligations of Borrower under the Existing Credit
Agreement, the Existing Security Agreement or the Existing Pledge Agreement
except to the extent any such obligation is actually satisfied by Borrower.
[The next page is the signature page]
52
IN WITNESS WHEREOF, Borrower, the Banks, Administrative Agent and
Collateral Agent have caused this Restated Credit Agreement to be executed as of
the day and year first above written.
BORROWER: BELL MICROPRODUCTS INC.
By:________________________
Name:
Title:
ADMINISTRATIVE AGENT: CALIFORNIA BANK & TRUST,
As Administrative Agent
By:________________________
Name:
Title:
By:________________________
Name:
Title:
COLLATERAL AGENT: UNION BANK OF CALIFORNIA, N.A.
As Collateral Agent
By:________________________
Name:
Title:
BANKS: CALIFORNIA BANK & TRUST,
As a Bank
By:________________________
Name:
Title:
By:________________________
Name:
Title:
53
UNION BANK OF CALIFORNIA, N.A.
By:___________________________
Name:
Title:
SANWA BANK CALIFORNIA,
As a Bank
By:___________________________
Name:
Title:
COMERICA BANK-CALIFORNIA,
As a Bank
By:___________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
As a Bank
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
54
IBM CREDIT CORPORATION,
As a Bank
By:___________________________
Name:
Title:
55
SCHEDULE I
BANKS
Bank Revolving Loan Commitment
CALIFORNIA BANK & TRUST $30,000,000
Applicable Lending Office: 465 California
Street, First FloorSan Francisco, CA 94104
Address for Notices: 465 California Street,
First Floor San Francisco, CA 94104
Attn: Relationship Manager Bell Microproducts
Telephone: (415) 875-1445
Facsimile (415) 875-1456
UNION BANK OF CALIFORNIA, N.A. $30,000,000
Applicable Lending Office: 99 Almaden Boulevard,
2nd Floor San Jose, CA 95133
Address for Notices: Northern California
Commercial Banking Group 350 California Street,
10th Floor San Francisco, CA 94104
Attention: William Hinch Vice President
Telephone: (415)705-7028
Facsimile (415) 705-7111
I-1
COMERICA BANK - CALIFORNIA $30,000,000
Applicable Lending Office: California
Corporate Banking 155 Grand Avenue,
Suite 402 Oakland, CA 94612
Address for Notices: California Corporate
Banking 155 Grand Avenue, Suite 402
Oakland, CA 94612 Attn: Scott Smith
Telephone: (510) 645-2202
Facsimile (510) 645-2220
SANWA BANK CALIFORNIA $20,000,000
Applicable Lending Office:San Jose
CBC220 Almaden Boulevard San Jose, CA
95113-2003
Address for Notices: 220 Almaden Boulevard
San Jose, CA 95113-2003
Attn: Clifford M. Wallace
Telephone: (408) 297-6500
Facsimile (408) 292-4092
I-2
U.S. BANK NATIONAL ASSOCIATION $20,000,000
Applicable Lending Office:
U.S. Bank National Association
Corporate Banking Center
2890 North Main Street
Walnut Creek, CA 94596
Address for Notices:
U.S. Bank National Association
California Corporate Banking
2890 North Main Street
Walnut Creek, CA
94596
Attn: Michael Powell
Telephone: (925) 942-9489
Facsimile (925) 945-6919
IBM CREDIT CORPORATION $30,000,000
Applicable Lending Office:
IBM Credit Corporation
5000 Executive Parkway, Suite 450
San Ramon, CA 94583
Address for Notices:
IBM Credit Corporation
5000 Executive Parkway, Suite 450
San Ramon, CA 94583
Attn: Region Manager, West
Telephone: (925) 277-5600
Facsimile: (925) 277-5675
I-3
SCHEDULE II
PRICING GRID
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5
PERIOD PERIOD PERIOD PERIOD PERIOD
APPLICABLE
MARGINS: 1.45% 1.65% 1.85% 2.05% 2.25%
EXPLANATION
1. The Applicable Margin for each Revolving LIBOR Loan will be set for
each Pricing Period and will vary depending upon whether such period is
a Level 1 Period, a Level 2 Period, a Level 3 Period, a Level 4 Period
or a Level 5 Period.
2. The first Pricing Period, which commences on the November 12, 1998 and
ends on February 28, 1999, will be a Level 3 Period.
3. Each Pricing Period thereafter will be a Level 1 Period, a Level 2
Period, a Level 3 Period, a Level 4 Period or a Level 5 Period
depending upon Borrower's Leverage Ratio (as calculated pursuant to the
definition of "Leverage Ratio" set forth in Schedule 1.01) for the most
recent fiscal quarter period ending prior to the first day of such
Pricing Period as follows:
(a) If, during any Pricing Period, Borrower's Leverage Ratio is
less than 2.00 to 1.00, Borrower's pricing will be a Level 1
Period.
(b) If, during any Pricing Period, Borrower's Leverage Ratio is
greater than or equal to 2.00 to 1.00 but less than or equal
to 2.50 to 1.00, Borrower's pricing will be a Level 2 Period.
(c) If, during any Pricing Period, Borrower's Leverage Ratio is
greater than 2.50 to 1.00 but less than or equal to 3.00 to
1.00, Borrower's pricing will be a Level 3 Period.
(d) If, during any Pricing Period, Borrower's Leverage Ratio is
greater than 3.00 to 1.00 but less than or equal to 3.25 to
1.00, Borrower's pricing will be a Level 4 Period.
(e) If, during any Pricing Period, Borrower's Leverage Ratio is
greater than 3.25 to 1.00, Borrower's pricing will be a Level
5 Period.
II-1
SCHEDULE 1.01
DEFINITIONS
"Adjusted Net Income" shall mean, with respect to any Person for any
period, the sum, determined on a consolidated basis in accordance with GAAP, of
the following:
(a) The net income or net loss of such Person and its
Subsidiaries for such period before provision for income taxes or
interest;
minus
(b) The sum of (i) all extraordinary and non-recurring income
of such Person and its Subsidiaries accruing during such period (to the
extent added in calculating net income or loss in clause (a) above) and
(ii) all dividends paid or declared by such Person and its Subsidiaries
during such period (except for dividends paid or payable to such Person
or any of its wholly-owned Subsidiaries).
"Adjusted Total Liabilities" shall mean, with respect to any Person for
any period, the sum of the following:
(a) The total liabilities of such Person and its Subsidiaries
(determined on a consolidated basis in accordance with GAAP);
plus
(b) To the extent not included in clause (a) above, all
liabilities of such Person and its Subsidiaries under or with respect
to (i) Synthetic Leases and (ii) letters of credit, banker's
acceptances or other similar facilities.
"Administrative Agent" shall have the meaning given to that term in
clause (3) of the introductory paragraph hereof.
"Affiliate" shall mean, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially or as a
trustee, guardian or other fiduciary, five percent (5%) or more of any class of
Equity Securities of such Person, (b) each Person that controls, is controlled
by or is under common control with such Person or any Affiliate of such Person
or (c) each of such Person's employees, officers, directors, joint venturers and
partners; provided, however, that in no case shall any Agent or any Bank be
deemed to be an Affiliate of Borrower or any of its Subsidiaries for purposes of
this Restated Credit Agreement. For the purpose of this definition, "control" of
a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.
"Agents" shall mean Administrative Agent and Collateral Agent.
1.01-1
"Agent's Fee Letter" shall mean the letter agreement dated as of the
Fourth Amendment Effective Date among Borrower, Administrative Agent, Collateral
Agent and Comerica Bank - California.
"Almo" shall mean Almo corporation, a Pennsylvania corporation.
"Almo Warrant" shall mean, collectively, the warrants issued by
Borrower to Almo in connection with Borrower's acquisition of substantially all
of the assets of Almo's computer products division entitling Almo or any
subsequent holder thereof to convert such warrants into no more than 350,000
shares of Equity Securities issued by Borrower.
"Applicable Lending Office" shall mean, with respect to any Bank, (a)
initially, its office designated as such in Schedule I (or, in the case of any
Bank which becomes a Bank by an Assignment pursuant to Subparagraph 8.05(c), its
office designated as such in the applicable Assignment Agreement) and (b)
subsequently, such other office or offices of such Bank may designate to
Administrative Agent as the office at which such Bank's Revolving Loans will
thereafter be maintained and for the account of which all payments of principal
of, and interest on, such Bank's Revolving Loans will thereafter be made.
"Applicable Margin" shall mean, with respect to any Revolving LIBOR
Loan at any time, the per annum margin which is determined pursuant to the
Pricing Grid and added to the LIBO Rate for such Revolving LIBOR Loan. The
Applicable Margins shall be determined as provided in the Pricing Grid and may
change for each Pricing Period.
"Assignee Bank" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment" shall have the meaning given to that term in Subparagraph
8.05(c).
"Assignment Agreement" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment Effective Date" shall have, with respect to each Assignment
Agreement, the meaning set forth therein.
"Assignor Bank" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Banks" shall have the meaning given to that term in clause (2) of the
introductory paragraph hereof. Unless otherwise indicated, the term "Banks"
shall include any Bank acting as Issuing Bank but not in its capacity as such.
"Bell Canada" shall mean Bell Microproducts Canada Inc., a California
corporation and a wholly-owned Subsidiary of Borrower.
"Bell Canada Guaranty" shall have the meaning given to that term in
Subparagraph 2.13(a).
1.01-2
"Bell Canada Pledge Agreement" shall have the meaning given to that
term in Subparagraph 2.13(b).
"Bell-Future Tech" shall mean Bell Microproducts-Future Tech, Inc., a
California corporation and a wholly-owned Subsidiary of the Borrower.
"Bell-Future Tech Security Documents" shall have the meaning given to
that term in Subparagraph 2.13(c).
"Bell-Future Tech Guaranty" shall have the meaning given to that term
in Subparagraph 2.13(c).
"Bell-Future Tech Security Agreement" shall have the meaning given to
that term in Subparagraph 2.13(c).
"Bell-Tenex" shall mean Bell Microproducts Canada-Tenex Data ULC, a
Nova Scotia, Canada unlimited liability company and a wholly-owned Subsidiary of
Bell Canada.
"Bell-Tenex Canadian Security Documents" shall have the meaning given
to that term in Subparagraph 2.13(b).
"Bell-Tenex Guaranty" shall have the meaning given to that term in
Subparagraph 2.13(b).
"Bell-Tenex Security Agreement" shall have the meaning given to that
term in Subparagraph 2.13(b).
"Borrower" shall have the meaning given to that term in clause (1) of
the introductory paragraph hereof.
"Borrower Pledge Agreement" shall have the meaning given to that term
in Subparagraph 2.13(a).
"Borrower Security Agreement" shall have the meaning given to that term
in Subparagraph 2.13(a).
"Borrowing Base" shall have the meaning given to that term in
Subparagraph 2.03(a).
"Borrowing Base Certificate" shall have the meaning given to that term
in Subparagraph 5.01(a).
"Business Day" shall mean any day on which (a) commercial banks are not
authorized or required to close in San Francisco, California or New York, New
York and (b) if such Business Day is related to a Revolving LIBOR Loan, dealings
in Dollar deposits are carried out in the London interbank market.
1.01-3
"Capital Adequacy Requirement" shall have the meaning given to that
term in Subparagraph 2.10(d).
"Capital Asset" shall mean, with respect to any Person, tangible
property owned or leased (in the case of a Capital Lease) by such Person, or any
expense incurred by any Person that is required by GAAP to be reported as an
asset on such Person's balance sheet.
"Capital Event" shall mean the sale or issuance by Borrower of
Borrower's Equity Securities or Subordinated Indebtedness in one transaction or
a series of related transaction (other than in connection with the conversion of
the Almo Warrant or any stock option or similar plan of Borrower created in the
normal course of Borrower's business).
"Capital Expenditures" shall mean, with respect to any Person and any
period, all amounts expended and Indebtedness incurred or assumed by such Person
during such period for the acquisition of real property and other Capital Assets
(including amounts expended and Indebtedness incurred or assumed in connection
with Capital Leases).
"Capital Leases" shall mean any and all lease obligations that, in
accordance with GAAP, are required to be capitalized on the books of a lessee.
"CB&T" shall have the meaning given to that term in Recital A.
"Change of Law" shall have the meaning given to that term in
Subparagraph 2.10(b).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all property in which any Agent or any Bank has
a Lien to secure the Obligations.
"Collateral Agent" shall have the meaning given to that term in clause
(3) of the introductory paragraph hereof or any other Person that assumes the
duties and responsibilities of Collateral Agent pursuant to Subparagraph 7.07.
"Contractual Obligation" of any Person shall mean, any indenture, note,
security, deed of trust, mortgage, security agreement, lease, guaranty,
instrument, contract, agreement or other form of obligation to which such Person
is a party or by which such Person or any of its property is bound.
"Credit Documents" shall mean and include this Restated Credit
Agreement, the LC Applications, the Revolving Loan Notes, the Security
Documents, all amendments hereof and thereof, all waivers and consents hereunder
and thereunder and all other documents, instruments and agreements delivered by
Borrower or any of its Subsidiaries to any Agent or any Bank in connection with
this Restated Credit Agreement.
"Credit Event" shall mean the making of any Revolving Loan, the
conversion of any Revolving Loan from one Type of Revolving Loan to another Type
or the selection of a new
1.01-4
Interest Period for any Revolving LIBOR Loan, or the issuance of any Letter of
Credit or any amendment of any Letter of Credit which increases its stated
amount or extends its expiration date.
"Default" shall mean any event or circumstance not yet constituting an
Event of Default which with the giving of any notice or the lapse of any period
of time or both, would become an Event of Default.
"Dollars" and "$" shall mean the lawful currency of the United States
of America and, in relation to any payment under this Restated Credit Agreement,
same day or immediately available funds.
"Drawing Payment" shall have the meaning given to that term in
Subparagraph 2.02(c).
"EBITDA" shall mean, with respect to any Person for any period, the sum
of the following, determined on a consolidated basis in accordance with GAAP
where applicable:
(a) The net income or net loss of such Person and its
Subsidiaries for such period before provision for income taxes;
plus
(b) The sum (to the extent deducted in calculating net income
or loss in clause (a) above) of (i) all Interest Expenses of such
Person and its Subsidiaries accruing during such period and (ii) all
depreciation and amortization of such Person and its Subsidiaries
accruing during such period.
"Effective Date" shall have the meaning given to that term in Paragraph
9.01.
"Eligible Accounts" shall mean, with respect to Borrower and, after the
Tenex Data Acquisition and the delivery to Administrative Agent of each of the
items listed on Schedule 5.01(j), Bell-Tenex, the aggregate net amount of all
accounts (as defined in the California Uniform Commercial Code) of Borrower and
Bell-Tenex, except, to the extent not already deducted, the following:
(a) Any account which does not arise from the sale or lease of
goods or services rendered to the account debtor thereon in the
ordinary course of Borrower's or the Canadian Subsidiaries' business,
or which arises from a sale, lease or service which has not been fully
performed by Borrower or Bell-Tenex;
(b) Any account or portion thereof to the extent the same is
subject to any right of discount, credit, allowance, rescission,
setoff, claim or defense or which is otherwise not valid and
enforceable against the account debtor thereon;
(c) Any account which is not subject to a first priority
perfected security interest in favor of Collateral Agent for the
benefit of the Agents and the Banks;
1.01-5
(d) Any account which is not owned by Borrower or Bell-Tenex
free and clear of all Liens, rights and interests of all other Persons
except for Permitted Liens;
(e) Any account which is unpaid more than ninety (90) days
after the invoice date therefor;
(f) Any account arising from a consignment by Borrower or
Bell-Tenex as consignee or a COD shipment;
(g) Any account payable by (i) the United States government or
any department, agency or other subdivision thereof (except to the
extent Borrower complies with the Federal Assignment of Claims Act of
1940, as amended), (ii) a Person located in any jurisdiction outside
the United States or Canada (excluding the provinces of Newfoundland,
Nova Scotia, Prince Edward Island, New Brunswick, Nunavut, Manitoba,
Saskatchewan, Alberta and the Yukon Territory), except to the extent
secured by a letter of credit acceptable to Collateral Agent, or (iii)
an Affiliate of Borrower;
(h) Any account payable by an account debtor (i) which is the
subject of any bankruptcy, insolvency, liquidation or similar
proceeding, (ii) which has made an assignment for the benefit of its
creditors, (iii) for which a receiver has been appointed or (iv) which
has admitted in writing its inability to pay its debts as such debts
become due;
(i) All accounts payable by an account debtor which has failed
to pay twenty percent (20%) or more of its total accounts payable owed
to Borrower and/or Bell-Tenex within ninety (90) days of their invoice
date;
(j) Any account payable by an account debtor in which the
total accounts payable from such account debtor exceeds twenty five
percent (25%) of the total amount of all Eligible Accounts, to the
extent of such excess (except as approved from time to time by
Collateral Agent); and
(k) Any other account which Collateral Agent reasonably
determines is unlikely to be paid in full within ninety (90) days after
the invoice date.
(As used in clauses (a)-(k) of this definition, the term "account" when
used in the singular form shall mean an account arising from a single
invoice.)
"Eligible Inventory" shall mean, with respect to Borrower and, after
the Tenex Data Acquisition and the delivery to Administrative Agent of each of
the items listed on Schedule 5.01(j), Bell-Tenex, the net book value of all
inventory (as defined in the California Uniform Commercial Code) of Borrower and
Bell-Tenex, except the following:
(a) Any inventory which is not held by or on behalf of
Borrower or Bell-Tenex for sale or lease in the ordinary course of its
business;
(b) Any inventory consisting of work-in-process;
1.01-6
(c) Any inventory which is not subject to a first priority
perfected security interest in favor of Collateral Agent for the
benefit of the Agents and the Banks;
(d) Any inventory located in any jurisdiction other than the
United States or Canada (excluding the provinces of Newfoundland, Nova
Scotia, Prince Edward Island, New Brunswick, Manitoba, Saskatchewan,
Alberta and Yukon Territory);
(e) Any inventory which is not owned by Borrower or Bell-Tenex
free and clear of all Liens, rights and interests of all other Persons
except for Permitted Liens;
(f) Any inventory which is obsolete, unsalable or damaged;
(g) Any inventory which has been consigned by Borrower or
Bell-Tenex (except for such inventory on consignment approved from time
to time by Collateral Agent);
(h) The portion of any inventory shown on the books of
Borrower or Bell-Tenex representing any purchase price discount earned
by Borrower or Bell-Tenex; and
(i) Any other inventory which Collateral Agent reasonably
determines is unlikely to be sold at or above its net book value.
"Employee Benefit Plan" shall mean any employee benefit plan within the
meaning of section 3(3) of ERISA maintained or contributed to by Borrower or any
ERISA Affiliate, other than a Multiemployer Plan.
"Environmental Laws" means all Requirements of Law relating to the
protection of human health or the environment, including, without limitation,
(a) all Requirements of Law, pertaining to reporting, licensing, permitting,
investigation, and remediation of emissions, discharges, releases, or threatened
releases of hazardous materials, chemical substances, pollutants, contaminants,
or hazardous or toxic substances, materials or wastes whether solid, liquid, or
gaseous in nature, into the air, surface water, groundwater, or land, or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of chemical substances, pollutants,
contaminants, or hazardous or toxic substances, materials, or wastes, whether
solid, liquid, or gaseous in nature; and (b) all Requirements of Law pertaining
to the protection of the health and safety of employees or the public.
"Equity Securities" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, partnership interests or other equity
interests in and of such Person (regardless of how designated and whether or not
voting or non-voting) and (b) all warrants, options and other rights to acquire
any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be amended or supplemented, including any
rules or regulations issued in connection therewith.
1.01-7
"ERISA Affiliate" shall mean any Person which is treated as a single
employer with Borrower under Section 414 of the Code.
"Event of Default" shall have the meaning given to that term in
Paragraph 6.01.
"Excluded Collateral" shall have the meaning given to that term in the
Borrower Security Agreement.
"Existing Borrower Pledge Agreement" shall have the meaning given to
that term in Paragraph 9.03.
"Existing Borrower Security Agreement" shall have the meaning given to
that term in Paragraph 9.03.
"Existing Credit Agreement" shall have the meaning given to that term
in Recital A.
"Federal Funds Rate" shall mean, for any day, the weighted average of
the per annum rates on overnight Federal funds transactions with member banks of
the Federal Reserve System arranged by Federal funds brokers as published by the
Federal Reserve Bank of New York for such day, (or, if such rate is not so
published for any day, the average rate quoted to Administrative Agent on such
day by three (3) Federal funds brokers of recognized standing selected by
Administrative Agent).
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System.
"Fee on Increased Commitment" shall have the meaning given to that term
in Subparagraph 2.03(c).
"Financial Statements" shall mean, with respect to any accounting
period for any Person, statements of income and of changes in cash flow of such
Person for such period, and balance sheets of such Person as of the end of such
period, setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year if such period is less than a
full fiscal year or, if such period is a full fiscal year, corresponding figures
from the preceding annual audit, all prepared in reasonable detail and in
accordance with GAAP.
"First Amendment Effective Date" shall mean May 14, 1999.
"Fourth Amendment Effective Date" shall mean December 8, 1999.
"Fifth Amendment Effective Date" shall mean December 31, 1999.
"Future Tech Acquisition" shall mean the acquisition by Bell-Future
Tech of substantially all of the assets of the Future Tech International, Inc.
"Future Tech Acquisition Effective Date" shall mean the date that the
Future Tech Acquisition is consummated.
1.01-8
"GAAP" shall mean generally accepted accounting principles and
practices as in effect in the United States of America from time to time,
consistently applied, provided, however, that with respect to Borrower, the
definition of "current liabilities" as set forth in GAAP shall include the
Obligations.
"Governmental Authority" shall mean any domestic or foreign national,
state or local government, any political subdivision thereof, any department,
agency, authority or bureau of any of the foregoing, or any other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, without limitation, the
Federal Deposit Insurance Corporation, the Federal Reserve Board, the
Comptroller of the Currency, any central bank or any comparable authority.
"Governmental Charges" shall mean all levies, assessments, fees, claims
or other charges imposed by any Governmental Authority upon or relating to (i)
Borrower or any of its Subsidiaries, (ii) the Revolving Loans, (iii) employees,
payroll, income or gross receipts of Borrower or any of its Subsidiaries, (iv)
the ownership or use of any of its assets by Borrower or any of its Subsidiaries
or (v) any other aspect of the business of Borrower or any of its Subsidiaries.
"Governmental Rule" shall mean any law, rule, regulation, ordinance,
order, code interpretation, judgment, decree, directive, guidelines, policy or
similar form of decision of any Governmental Authority.
"Guaranty" shall mean, collectively, the Bell Canada Guaranty and, the
Bell-Tenex Guaranty and the Bell-Future Tech Guaranty.
"Indebtedness" of any Person shall mean and include (a) all items of
indebtedness and liabilities which, in accordance with GAAP, would be included
in determining liabilities that are shown on the liability side of the balance
sheet of such Person, (b) all indebtedness and liabilities of other Persons
assumed or guaranteed by such Person or in respect of which such Person is
secondarily or contingently liable whether by any agreement to acquire
indebtedness and liabilities or to supply or advance funds or otherwise, and (c)
all indebtedness and liabilities of other Persons secured by any Lien in any
property of such Person (including without limitation Capital Leases).
"Indemnitees" shall have the meaning given to that term in Paragraph
8.03.
"Interest Account" shall have the meaning given to that term in
Subparagraph 2.07(b).
"Interest Coverage Ratio" shall mean, with respect to any Person for
any period, the ratio, determined on a consolidated basis in accordance with
GAAP, of (a) the sum of the Adjusted Net Income and Interest Expenses of such
Person and its Subsidiaries for such period to (b) the Interest Expenses of such
Person and its Subsidiaries for such period.
1.01-9
"Interest Expenses" shall mean, with respect to any Person for any
period, the sum, determined on a consolidated basis in accordance with GAAP, of
(a) all interest expenses of such Person and its Subsidiaries during such period
(including, without limitation, (i) the amortization of debt discounts, (ii) the
amortization of all fees payable in connection with the incurrence of
Indebtedness to the extent included in interest expense and (iii) the portion of
any Capitalized Lease Obligations allocable to interest expense and financing
charges attributable to Synthetic Leases whether calculated as interest expense
or rental expense) plus (b) all letter of credit fees payable by such Person
accruing during such period.
"Interest Period" shall mean, with respect to any Revolving LIBOR Loan,
the time periods selected by Borrower pursuant to Subparagraph 2.01(b) or
Subparagraph 2.01(d) which commences on the first day of such Revolving Loan or
the effective date of any conversion and ends on the last day of such time
period, and thereafter, each subsequent time period selected by Borrower
pursuant to Subparagraph 2.01(e) which commences on the last day of the
immediately preceding time period and ends on the last day of that time period.
"Investment" of any Person shall mean any loan or advance of funds by
such Person to any other Person (other than advances to employees of such Person
for moving and travel expense, drawing accounts and similar expenditures in the
ordinary course of business), any purchase or other acquisition of any Equity
Securities or Indebtedness of any other Person, any capital contribution by such
Person to or any other investment by such Person in any other Person (including,
without limitation, any Indebtedness incurred by such Person of the type
described in clauses (b) and (c) of the definition of "Indebtedness" on behalf
of any other Person); provided, however, that Investments shall not include
accounts receivable or other indebtedness owed by customers of such Person which
are current assets and arose from sales in the ordinary course of such Person's
business.
"Issuing Bank" shall mean CB&T, in its capacity as issuer of Letters of
Credit under Paragraph 2.02.
"LC Application" shall have the meaning given to that term in
Subparagraph 2.02(b).
"LC Commitment" shall have the meaning given to that term in
Subparagraph 2.02(a).
"LC Facility Expiration Date" shall have the meaning given to that term
in Subparagraph 2.02(a).
"LC Issuance Fees" shall have the meaning given to that term in
Subparagraph 2.04(c).
"LC Usage Fee" shall have the meaning given to that term in
Subparagraph 2.04(c).
"Letter of Credit" shall have the meaning given to that term in
Subparagraph 2.02(a).
"Leverage Ratio" shall mean, with respect to any Person at any time,
the ratio, determined on a consolidated basis in accordance with GAAP, of (a)
the Adjusted Total
1.01-10
Liabilities of such Person and its Subsidiaries at such time to (b) the Tangible
Net Worth of such Person and its Subsidiaries at such time.
"LIBO Rate" shall mean, with respect to any Interest Period for the
Revolving LIBOR Loans in any Revolving Loan Borrowing consisting of Revolving
LIBOR Loans, a rate per annum equal to the quotient of (a) the rate per annum at
which Dollar deposits are offered to CB&T in the London interbank eurodollar
currency market on the second Business Day prior to the commencement of such
Interest Period at or about 11:00 A.M. (London time) (for delivery on the first
day of such Interest Period) for a term comparable to such Interest Period and
in an amount approximately equal to the amount of the Revolving Loan to be made
by CB&T as part of such Revolving Loan Borrowing, divided by (b) one minus the
Reserve Requirement for such Revolving Loans in effect from time to time. The
LIBO Rate applicable to any Revolving Loan for any Interest Period shall be
automatically adjusted during such Interest Period to reflect any change in the
applicable Reserve Requirement.
"Lien" shall mean, with respect to any property, any security interest,
mortgage, pledge, lien, claim, charge or other encumbrance in, of, or on such
property or the income therefrom, including, without limitation, the interest of
a vendor or lessor under a conditional sale agreement, Capital Lease or other
title retention agreement, or any agreement to provide any of the foregoing, and
the filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction.
"Margin Stock" shall have the meaning given to that term in Regulation
U issued by the Federal Reserve Board, as amended from time to time, and any
successor regulation thereto.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, prospects or financial or other condition of
Borrower or any of its Subsidiaries; (b) the ability of Borrower or any of its
Subsidiaries to pay or perform the Obligations in accordance with the terms of
this Restated Credit Agreement and the other Credit Documents; (c) the rights
and remedies of any Agent or any Bank under this Restated Credit Agreement, the
other Credit Documents or any related document, instrument or agreement or (d)
the value of the Collateral, any Agent's or any Bank's security interests in the
Collateral or the perfection or priority of such security interests.
"Maturity" shall mean, with respect to any Revolving Loan,
Reimbursement Obligation, interest, fees or other amount payable by Borrower
under this Restated Credit Agreement or the other Credit Documents, the date
such Revolving Loan, Reimbursement Obligation, interest, fee or other amount
becomes due, whether upon the stated maturity or due date, upon acceleration or
otherwise.
"Multiemployer Plan" shall mean any multiemployer plan within the
meaning of section 3(37) of ERISA maintained or contributed to by Borrower or
any ERISA Affiliate.
"Net Income After Tax" shall mean, with respect to any Person for any
period, the net income or net loss of such Person and its Subsidiaries for such
period (after provision for income taxes), determined on a consolidated basis in
accordance with GAAP.
1.01-11
"Net Operating Income" shall mean, with respect to any Person for any
period, the sum, determined on a consolidated basis in accordance with GAAP, of
the following:
(a) The net income or net loss of such Person and its
Subsidiaries for such period (before provision for income taxes);
plus
(b) The sum (to the extent deducted in calculating net income
or loss in clause (a) above) of all extraordinary and non-recurring
expenses of such Person and its Subsidiaries accruing during such
period;
minus
(c) The sum (to the extent added in calculating net income or
loss in clause (a) above) of all extraordinary and non-recurring income
of such Person and its Subsidiaries accruing during such period.
"Net Proceeds" shall mean with respect to the sale or issuance of any
Indebtedness, any Equity Security or any other security by any Person, the
aggregate consideration received by such Person from such sale or issuance less
the sum of the actual amount of the reasonable fees and commissions payable to
Persons other than such Person or any Affiliate of such Person, the reasonable
legal and other professional expenses and the other reasonable expenses directly
related to such sale or issuance that are to be paid by such Person.
"Notice of Revolving Loan Borrowing" shall have the meaning given to
that term in Subparagraph 2.01(b).
"Notice of Revolving Loan Conversion" shall have the meaning given to
that term in Subparagraph 2.01(d).
"Notice of Revolving Loan Interest Period Selection" shall have the
meaning given to that term in Subparagraph 2.01(e).
"Obligations" shall mean and include, with respect to Borrower, all
loans, advances, debts, liabilities, and obligations, howsoever arising, owed by
Borrower to any Agent or the Banks of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the payment of
money), direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising pursuant to the terms of this Restated Credit
Agreement or any of the other Credit Documents, including without limitation all
interest, fees, charges, expenses, attorneys' fees and accountants' fees
chargeable to Borrower or payable by Borrower hereunder or thereunder.
"Outstanding Facilities Credit" shall have the meaning given to that
term in Subparagraph 2.03(a).
"Participant" shall have the meaning given to that term in Subparagraph
8.05(b).
1.01-12
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Dividend" shall mean and include:
(a) Dividends payable solely in the common stock of Borrower;
(b) Dividends payable by any wholly-owned Subsidiary solely to
Borrower; and
(c) Repurchases of employee stock pursuant to repurchase
agreements.
"Permitted Indebtedness" shall mean and include:
(a) Indebtedness to subcontractors and trade creditors
incurred in the ordinary course of business;
(b) Indebtedness of Borrower to the Banks and the Agents under
this Restated Credit Agreement and the other Credit Documents;
(c) Unsecured Indebtedness of Borrower, provided that (A) the
Obligations shall at all times rank senior in right of payment with
such unsecured Indebtedness, (B) such unsecured Indebtedness does not
contain material provisions that are more restrictive to Borrower and
its Subsidiaries than the material provisions contained in this
Restated Credit Agreement, (C) no principal payable in connection with
such unsecured Indebtedness is scheduled for payment on or prior to the
Maturity Date, and (D) such unsecured Indebtedness is otherwise
acceptable to the Banks in their sole discretion;
(d) Purchase money Indebtedness incurred to acquire a Capital
Asset provided that (i) such Indebtedness does not exceed the purchase
price of such Capital Asset, (ii) such Indebtedness is incurred not
later than thirty (30) days after the acquisition of such asset and
(iii) the sum of all payments due on such purchase money Indebtedness
and Capital Leases and operating leases referred to in the following
clause (e) shall not exceed in the aggregate $500,000 in any fiscal
year;
(e) Indebtedness under Capital Leases and operating leases
provided that the sum of all payments due on such Capital Leases and
operating leases and purchase money Indebtedness referred to in the
preceding clause (d) shall not exceed in the aggregate $500,000 in any
fiscal year; provided, however, that amounts paid by Borrower pursuant
to that certain operating lease agreement, dated as of October 22,
1999, by and between Borrower and Winthrop Resources Corporation, shall
be excluded from the calculation set forth in this clause (e) and the
preceding clause (d) for so long as the sum of all payments due
thereunder does not exceed in the aggregate $1,000,000 in any fiscal
year;
(f) Indebtedness of any wholly-owned Subsidiary of Borrower to
Borrower arising from the extension by Borrower to such Subsidiary of
working capital financing in the ordinary course of Borrower's and such
Subsidiary's businesses, provided that, to
1.01-13
the extent requested by Collateral Agent, such Subsidiary has taken all
steps necessary to grant to Borrower and perfect security interests in
the assets of such Subsidiary as security for such Indebtedness;
(g) Indebtedness arising from the endorsement of instruments
in the ordinary course of business;
(h) Indebtedness of Borrower and its Subsidiaries to any Bank
under Rate Contracts, provided, that (A) all such arrangements are
entered into in connection with bona fide hedging operations and not
for speculation and (B) the aggregate net amount owed by Borrower and
its Subsidiaries under, on account of or otherwise in connection with
such Rate Contracts does not exceed $50,000,000 (marked to market) at
any time; and
(i) Other Indebtedness not exceeding $100,000 at any time.
"Permitted Investments" shall mean and include:
(a) Deposits with commercial banks organized under the laws of
the United States or a state thereof to the extent such deposits are
fully insured by the Federal Deposit Insurance Corporation;
(b) Investments in marketable obligations issued or fully
guaranteed by the United States and maturing not more than ninety (90)
days from the date of issuance;
(c) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of customers or
suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers;
(d) Investments arising under Rate Contracts otherwise
permitted pursuant to clause (h) of the definition of "Permitted
Indebtedness"; and
(e) Investments not otherwise permitted hereby not exceeding
in the aggregate $50,000 at any time outstanding.
"Permitted Liens" shall mean and include:
(a) Liens for taxes or other governmental charges not at the
time delinquent or thereafter payable without penalty or being
contested in good faith, provided provision is made to the reasonable
satisfaction of Collateral Agent for the eventual payment thereof if
subsequently found payable;
(b) Liens of carriers, warehousemen, mechanics, materialmen,
vendors, and landlords incurred in the ordinary course of business for
sums not overdue or being contested in good faith, provided provision
is made to the reasonable satisfaction of Collateral Agent for the
eventual payment thereof if subsequently found payable;
1.01-14
(c) Deposits under workers' compensation, unemployment
insurance and social security laws or to secure the performance of
bids, tenders, contracts (other than for the repayment of borrowed
money) or leases, or to secure statutory obligations of surety or
appeal bonds or to secure indemnity, performance or other similar bonds
in the ordinary course of business;
(d) Liens arising out of a judgment or award not exceeding
$100,000 (exclusive of any amounts covered by insurance issued by a
Person not an Affiliate of Borrower) with respect to which an appeal is
being prosecuted, a stay of execution pending appeal having been
secured;
(e) Liens securing purchase money indebtedness if such
indebtedness is Permitted Indebtedness pursuant to clause (d) of the
definition thereof and such Liens do not extend to property other than
the property financed with such indebtedness;
(f) Liens securing obligations under a Capital Lease if such
lease is Permitted Indebtedness pursuant to clause (e) of the
definition thereof and such Liens do not extend to property other than
the property leased under such Capital Lease;
(g) Liens in favor of any Agent or any Bank to secure the
Obligations;
(h) Leases, subleases, licenses and sublicenses granted to
Borrower the granting of which is not prohibited pursuant to the
definition of Permitted Indebtedness;
(i) Liens in favor of customs and revenue authorities which
secure payment of duties in connection with the importation of goods;
(j) Liens existing on property acquired by Borrower or any of
its Subsidiaries at the time of such acquisition (including Liens on
the assets of any Person at the time such Person becomes a Subsidiary
of Borrower), unless such Liens were created in contemplation of such
acquisition;
(k) Liens on insurance policies and the proceeds thereof
incurred solely to secure the financing of premiums owing with respect
thereto;
(l) Liens in favor of Borrower; and
(m) Such minor defects, irregularities, encumbrances,
easements, rights of way, and clouds on title as normally exist on
similar properties which do not, individually or in the aggregate,
materially impair the property affected thereby or the use thereof.
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a joint venture, a
trust or other entity or a Governmental Authority.
"Pricing Grid" shall mean Schedule II.
1.01-15
"Pricing Period" shall mean (a) the period commencing on the Effective
Date and ending on February 28, 1999, (b) the period commencing on March 1, 1999
and ending on May 31, 1999, and (c) each consecutive three-calendar month period
thereafter which commences on the day following the last day of the immediately
preceding three-calendar month period and ends on the last day of that time
period as follows:
(i) December 1st through February 28th or February 29th (as
applicable);
(ii) March 1st through May 31st;
(iii) June 1st through August 31st; and
(iv) September 1st through November 30th.
"Prime Rate" shall mean the per annum rate publicly announced by CB&T
from time to time at its head office as its prime rate. The Prime Rate is
determined by CB&T from time to time as a means of pricing credit extensions to
some customers and is neither directly tied to any external rate of interest or
index nor necessarily the lowest rate of interest charged by CB&T at any given
time for any particular class of customers or credit extensions.
"Proportionate Share" shall mean, with respect to any Bank at any time,
a fraction (expressed as a percentage), the numerator of which is such Bank's
Revolving Loan Commitment at such time and the denominator of which is the Total
Revolving Loan Commitment at such time.
"Quick Ratio" shall mean, with respect to any Person at any time, the
ratio, determined on a consolidated basis in accordance with GAAP, of (a) the
cash and trade accounts receivable of such Person and its Subsidiaries at such
time to (b) the current liabilities of such Person and its Subsidiaries at such
time.
"Rate Contracts" shall mean swap agreements (as that term is defined in
Section 101 of the Federal Bankruptcy Reform Act of 1978, as amended) and any
other agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.
"Reimbursement Obligation" shall have the meaning given to that term in
Subparagraph 2.02(c).
"Reimbursement Payment" shall have the meaning given to that term in
Subparagraph 2.02(c).
"Reportable Event" shall have the meaning given to that term in ERISA
and applicable regulations thereunder.
"Required Banks" shall mean (a) at any time Revolving Loans are
outstanding, Banks holding sixty-six and two-thirds percent (66 2/3%) or more of
the aggregate principal amount of
1.01-16
such Revolving Loans and (b) at any time no Revolving Loans are outstanding,
Banks whose Proportionate Shares equal or exceed sixty-six and two-thirds
percent (66 2/3%).
"Requirement of Law" applicable to any Person shall mean (a) the
Articles or Certificate of Incorporation and By-laws, Partnership Agreement or
other organizational or governing documents of such Person, (b) any Governmental
Rule applicable to such Person, (c) any license, permit, approval or other
authorization granted by any Governmental Authority to or for the benefit of
such Person and (d) any judgment, decision or determination of any Governmental
Authority or arbitrator, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Reserve Requirement" shall mean, with respect to any day in an
Interest Period for a Revolving LIBOR Loan, the aggregate of the reserve
requirement rates (expressed as a decimal) in effect on such day for
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of the Federal Reserve Board) required to be maintained by a member
bank of the Federal Reserve System. As used herein, the term "reserve
requirement" shall include, without limitation, any basic, supplemental or
emergency reserve requirements imposed on Bank by any Governmental Authority.
"Restated Borrower Pledge Agreement" shall have the meaning given to
that term in Paragraph 9.03.
"Restated Borrower Security Agreement" shall have the meaning given to
that term in Paragraph 9.03.
"Restated Credit Agreement" shall have the meaning given to that term
in the introductory paragraph hereof.
"Revolving LIBOR Loan" shall have the meaning given to that term in
Subparagraph 2.01(b).
"Revolving Loan" shall have the meaning given to that term in
Subparagraph 2.01(a).
"Revolving Loan Borrowing" shall mean a borrowing by Borrower
consisting of a Revolving Loan made by each Bank on the same date and of the
same Type pursuant to a single Notice of Revolving Loan Borrowing.
"Revolving Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite the name of such Bank in Schedule I under the column
entitled "Revolving Loan Commitment" or as reduced from time to time pursuant to
Paragraph 2.03 hereof.
"Revolving Loan Commitment Fees" shall have the meaning given to that
term in Subparagraph 2.04(b).
"Revolving Loan Maturity Date" shall have the meaning given to that
term in Subparagraph 2.01(a).
1.01-17
"Revolving Loan Note" shall have the meaning given to that term in
Subparagraph 2.07(a).
"Revolving Prime Rate Loan" shall have the meaning given to that term
in Subparagraph 2.01(b).
"SecurityDocuments" shall mean and include (i) prior to the Tenex Data
Acquisition Effective Date and after the Future Tech Acquisition Effective Date,
the Borrower Security Agreement, the Borrower Pledge Agreement, the Bell Canada
Guaranty, and all other documents, instruments and agreements delivered to any
Agent or any Bank to secure the Obligations or in connection with the
Collateral; (ii) on and after the Tenex Data Acquisition Effective Date, each of
the items listed in clause (i) above, the Bell Canada Pledge Agreement, the
Bell-Tenex Guaranty, the Bell-Tenex Security Agreement, the Bell-Tenex Canadian
Security Documents; and (iii) on and after the Future Tech Acquisition Effective
Date, each of the items listed in clause (i) and clause (ii) above, the
Bell-Future Tech Guaranty, the Bell-Future Tech Security Agreement, the
Bell-Future Tech Security Documents, and all other documents, instruments and
agreements delivered to any Agent or any Bank to secure the Obligations or in
connection with the Collateral.
"Senior Adjusted Total Liabilities" shall mean, with respect to
Borrower at any time, the difference of the following:
(a) The Adjusted Total Liabilities of Borrower and its
Subsidiaries at such time;
minus
(b) The aggregate principal amount of all Subordinated
Indebtedness of Borrower permitted pursuant to Subparagraph 5.02(b) and
clause (c) of the definition of "Permitted Indebtedness".
"Solvent" shall mean, with respect to any Person on any date, that on
such date (a) the fair value of the property of such Person is greater than the
fair value of the liabilities (including, without limitation, contingent
liabilities) of such Person, (b) the present fair saleable 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 as such debts and
liabilities 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 amount of capital.
"Subordinated Indebtedness" shall mean the unsecured subordinated
Indebtedness of Borrower permitted pursuant to Subparagraph 5.02(b) and clause
(c) of the definition of "Permitted Indebtedness".
1.01-18
"Subsidiary" of any Person shall mean (a) any corporation of which more
than 50% of the issued and outstanding Equity Securities 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) 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, (b) any partnership, joint venture,
limited liability company or other association of which more than 50% of the
equity interest having the power to vote, direct or control the management of
such partnership, joint venture or other association is at the time owned and
controlled by such Person, by such Person and one or more of the other
Subsidiaries or by one or more of such Person's other subsidiaries and (c) any
other Person included in the Financial Statements of such Person on a
consolidated basis.
"Synthetic Lease" shall mean an off-balance sheet financing arrangement
for equipment or real estate which is treated as an operating lease under GAAP
but pursuant to which the lessee of such equipment or real estate has the
benefits and burdens of ownership of the leased equipment or real estate for
U.S. tax purposes.
"Tangible Net Worth" shall mean, with respect to any Person at any
time, the remainder at such time, determined on a consolidated basis in
accordance with GAAP, of (a) the total assets of such Person and its
Subsidiaries minus (b) the sum (without limitation and without duplication of
deductions) of (i) the total liabilities of such Person and its Subsidiaries,
(ii) all reserves established by such Person and its Subsidiaries for
anticipated losses and expenses (to the extent not deducted in calculating total
assets in clause (a) above), (iii) all intangible assets of such Person and its
Subsidiaries (to the extent included in calculating total assets in clause (a)
above), including, without limitation, goodwill (including any amounts, however
designated on the balance sheet, representing the cost of acquisition of
businesses and investments in excess of underlying tangible assets), trademarks,
trademark rights, trade name rights, copyrights, patents, patent rights,
licenses, unamortized debt discount, marketing expenses, organizational
expenses, non-compete agreements and deferred research and development and (iv)
the amount, if any, by which the aggregate intercompany receivables owed to such
Person by its Affiliates exceeds the aggregate intercompany receivables payable
by such Person to its Affiliates.
"Taxes" shall have the meaning given to such term in Paragraph 2.11.
"Tenex Data Acquisition" shall mean the acquisition by Bell-Tenex of
substantially all of the assets of the Tenex Data Division of Axidata, Inc., a
Canadian corporation and a Subsidiary of Abitibi, Inc., a Canadian corporation.
"Tenex Data Acquisition Effective Date" shall mean the date that the
Tenex Data Acquisition is consummated.
"Total Revolving Loan Commitment" shall mean One Hundred Sixty Million
Dollars ($160,000,000) or, if such amount is reduced pursuant to 2.03(b), the
amount to which so reduced and in effect at such time.
1.01-19
"Total Unused Revolving Loan Commitment" shall mean, at any time, the
remainder of (a) the Total Revolving Loan Commitment at such time minus (b) the
Outstanding Facilities Credit at such time.
"Type" shall mean, with respect to any Revolving Loan or Revolving Loan
Borrowing at any time, the classification of such Revolving Loan or Revolving
Loan Borrowing by the type of interest rate it then bears, whether an interest
rate based on the Prime Rate or the LIBO Rate.
"UBOC" shall mean Union Bank of California, N.A., a national banking
association.
"Working Capital" shall mean, with respect to any Person at any time,
the working capital of such Person and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
1.01-20
SCHEDULE 3.01
EFFECTIVE DATE CONDITIONS PRECEDENT
A. PRINCIPAL CREDIT DOCUMENTS.
(1) The Third Amended and Restated Credit Agreement, duly
executed by Borrower, each Bank, Administrative Agent
and Collateral Agent;
(2) The Revolving Loan Note payable to each Bank, duly
executed by Borrower;
(3) The Borrower Security Agreement, duly executed by
Borrower;
(4) The Borrower Pledge Agreement, duly executed by
Borrower; and
(5) The Bell Canada Guaranty, duly executed by Bell Canada;
B. FINANCIAL STATEMENTS, FINANCIAL CONDITION, ETC.
(1) Copies of (a) the audited Financial Statements of Borrower
and its Subsidiaries for the fiscal year ended December 31, 1997,
prepared by Pricewaterhousecoopers, LLP., and (b) the unqualified
opinion (or qualified opinion reasonably acceptable to the Banks) and
management letter (if any) delivered by such accountants in connection
with such Financial Statements; and
(2) A Borrowing Base Certificate dated the Effective Date
which sets forth the calculation of the Borrowing Base as of September
30, 1998, certified by the Chief Financial Officer of Borrower.
C. BORROWER CORPORATE DOCUMENTS.
(1) The Articles of Incorporation of Borrower, certified as of
a recent date prior to the Effective Date by the Secretary of State of
California;
(2) A Certificate of Good Standing (or comparable certificate)
for Borrower, certified as of a recent date prior to the Effective Date
by the Secretary of State of California;
(3) A certificate of the Secretary of Borrower, dated as of
the date of this Restated Credit Agreement, certifying (a) that the
Articles of Incorporation of Borrower, in the form certified by the
Secretary of State of California and delivered to Administrative Agent
pursuant to item C(1) hereof, is in full force and effect and has not
been amended, supplemented, revoked or repealed since the date of such
certification; (b) that attached thereto is a true and correct copy of
the Bylaws of Borrower as in effect on the Effective Date; (c) that
attached thereto are true and correct copies of resolutions duly
adopted by the Board of Directors of Borrower and continuing in effect,
which authorize
3.01(e)-1
the execution, delivery and performance by Borrower of this Restated
Credit Agreement and the other Credit Documents executed or to be
executed by Borrower and the consummation of the transactions
contemplated hereby and thereby; and (d) that there are no proceedings
for the dissolution or liquidation of Borrower (commenced or
threatened);
(4) A certificate of the Secretary of Borrower, dated as of
the date of this Restated Credit Agreement, certifying the incumbency,
signatures and authority of the officers of Borrower authorized to
execute, deliver and perform this Restated Credit Agreement and the
other applicable Credit Documents on behalf of Borrower; and
(5) A Certificate of Good Standing (or comparable certificate)
for each Subsidiary of Borrower, certified as of a recent date prior to
the Effective Date by the Secretary of State (or comparable public
official) of such Subsidiary's jurisdiction of incorporation (or, in
the case of a foreign subsidiary, an opinion of counsel acceptable to
Administrative Agent to such effect).
D. BELL CANADA CORPORATE DOCUMENTS.
(1) The Certificate of Incorporation of Bell Canada, certified
as of a recent date prior to the Effective Date by the California
Secretary of State;
(2) A Certificate of Good Standing (or comparable certificate)
for Bell Canada, certified as of a recent date prior to the Effective
Date by the California Secretary of State;
(3) A certificate of the Secretary of Bell-Canada, dated the
Effective Date, certifying (a) that the Certificate of Incorporation of
Bell-Canada, in the form certified by the California Secretary of State
and delivered to Administrative Agent pursuant to item D(1) hereof, is
in full force and effect and has not been amended, supplemented,
revoked or repealed since the date of such certification; (b) that
attached thereto is a true and correct copy of the Bylaws of Bell
Canada as in effect on the Effective Date; (c) that attached thereto
are true and correct copies of resolutions duly adopted by the Board of
Directors of Bell Canada and continuing in effect, which authorize the
execution, delivery and performance by Bell Canada of the Credit
Documents executed or to be executed by Bell Canada and the
consummation of the transactions contemplated hereby and thereby; and
(d) that there are no proceedings for the dissolution or liquidation of
Bell Canada (commenced or threatened); and
(4) A certificate of the Secretary of Bell Canada, dated the
Effective Date, certifying the incumbency, signatures and authority of
the officers of Bell Canada authorized to execute, deliver and perform
the applicable Credit Documents on behalf of Bell Canada.
3.01(e)-2
E. SECURITY DOCUMENTS.
(1) All Uniform Commercial Code financing statements
(including amendments and fixture filings) and other documents,
instruments and agreements reasonably requested by Collateral Agent to
perfect the security interests, liens and assignments granted to
Collateral Agent by Borrower in connection herewith, appropriately
completed and duly executed by the appropriate parties;
(2) Uniform Commercial Code search certificates evidencing the
filing of the financing statements necessary to perfect the security
interests granted to Collateral Agent by Borrower pursuant to the
Credit Documents prior to the financing statements of all other
Persons;
(3) The certificates representing the stock pledged to
Collateral Agent pursuant to the Borrower Pledge Agreement, together
with blank stock powers for each such certificate duly executed by
Borrower.
(4) Such other documents, instruments and agreements as
Collateral Agent may reasonably request to establish and perfect the
Liens granted to Collateral Agent or any Bank in this Agreement, the
Security Documents and the other Credit Documents.
F. OPINIONS.
(1) A written opinion of Wilson, Sonsini, Goodrich & Rosati,
outside counsel to Borrower, dated as of the Effective Date and
addressed to Administrative Agent and each Bank, covering such legal
matters as Administrative Agent may reasonably request and otherwise in
form and substance satisfactory to Administrative Agent.
G. OTHER ITEMS.
(1) A duly completed and timely delivered Notice of Borrowing.
(2) A certificate of the President, a Vice President or Chief
Financial Officer of Borrower, addressed to Administrative Agent and
the Banks and dated as of the Effective Date, certifying that:
(a) The representations and warranties set forth in
Paragraph 4.01 are true and correct as of such date;
(b) No Event of Default or Default has occurred and
is continuing as of such date; and
(c) Each of the Credit Documents required to be
delivered to Administrative Agent or any Bank on or prior to
the Effective Date is in full force and effect as of such
date;
3.01(e)-3
(3) Certificates of insurance in forms acceptable to
Collateral Agent, naming Collateral Agent as additional insured or as
loss payee;
(4) All fees payable to Administrative Agent and the Banks on
or prior to the Effective Date;
(5) All fees and expenses of Administrative Agent's counsel
through the Effective Date; and
(6) Such other evidence as any Bank may reasonably request to
establish the accuracy and completeness of the representations and
warranties and the compliance with the terms and conditions contained
in this Restated Credit Agreement and the other Credit Documents.
3.01(g)-4
SCHEDULE 4.01(g)
MATERIAL LITIGATION
None
4.01(g)-1
SCHEDULE 4.01(q)
SUBSIDIARIES
Name Jurisdiction Classes Outstanding Percent
of of Shares Owned
Incorporation Stock ----------- -----
------------- -------
Bell Microproducts Canada, Inc. California Common 100 100%
Bell Microproducts-Future Tech, Inc. California Common 1,000 100%
4.01(q)-1
SCHEDULE 5.01(j)
DOCUMENTS TO BE DELIVERED BY BORROWER
ON OR PRIOR TO THE TENEX DATA ACQUISITION EFFECTIVE DATE
A. PRINCIPAL BELL CANADA AND BELL-TENEX CREDIT DOCUMENTS.
(1) The Bell Canada Pledge Agreement, duly executed by Bell
Canada;
(2) The Bell-Tenex Guaranty, duly executed by Bell-Tenex;
(3) The Bell-Tenex Security Agreement, duly executed by
Bell-Tenex; and
(4) The Bell-Tenex Canadian Security Documents, duly executed
by Bell-Tenex.
B. BELL-TENEX CORPORATE DOCUMENTS.
(1) The Certificate of Incorporation of Bell-Tenex, certified
as of a recent date prior to the Tenex Data Acquisition Effective Date
by the Deputy Registrar of Joint Stock Companies of Nova Scotia;
(2) A Certificate of Good Standing (or comparable certificate)
for Bell-Tenex, certified as of a recent date prior to the Tenex Data
Acquisition Effective Date by the Deputy Registrar of Joint Stock
Companies of Nova Scotia;
(3) A certificate of the Secretary of Bell-Tenex, dated the
Tenex Data Acquisition Effective Date, certifying (a) that the
Certificate of Incorporation of Bell-Tenex, in the form certified by
the Deputy Registrar of Joint Stock Companies of Nova Scotia and
delivered to Administrative pursuant to item B(1) hereof, is in full
force and effect and has not been amended, supplemented, revoked or
repealed since the date of such certification; (b) that attached
thereto is a true and correct copy of the Memorandum and Articles of
Association of Bell-Tenex as in effect on the Tenex Data Acquisition
Effective Date; (c) that attached thereto are true and correct copies
of resolutions duly adopted by the Board of Directors of Bell-Tenex and
continuing in effect, which authorize the execution, delivery and
performance by Bell-Tenex of the Credit Documents executed or to be
executed by Bell-Tenex and the consummation of the transactions
contemplated hereby and thereby; and (d) that there are no proceedings
for the dissolution or liquidation of Bell-Tenex (commenced or
threatened); and
(4) A certificate of the Secretary of Bell-Tenex, dated the
Tenex Data Acquisition Effective Date, certifying the incumbency,
signatures and authority of the officers of Bell-Tenex authorized to
execute, deliver and perform the applicable Credit Documents on behalf
of Bell-Tenex.
5.01(j)-1
C. SECURITY DOCUMENTS.
(1) All Uniform Commercial Code financing statements and other
documents, instruments and agreements reasonably requested by
Collateral Agent to perfect the security interests, liens and
assignments granted to Collateral Agent by Bell Canada and Bell-Tenex
in connection herewith, appropriately completed and duly executed by
the appropriate parties;
(2) Search certificates or similar documentation evidencing
the filing of the financing statements necessary to perfect the
security interests granted to Collateral Agent by Bell Canada and
Bell-Tenex pursuant to the Credit Documents will be prior to the
financing statements of all other Persons;
(3) The certificates representing the stock pledged to
Collateral Agent pursuant to the Bell Canada Pledge Agreement, together
with blank stock powers for each such certificate duly executed by
Borrower.
(4) Such other documents, instruments and agreements as
Collateral Agent may reasonably request to establish and perfect the
Liens granted to Collateral Agent or any Bank in this Agreement, the
Security Documents and the other Credit Documents.
D. OPINIONS.
(1) A written opinion of Wilson, Sonsini, Goodrich & Rosati,
outside counsel to Borrower, dated as of the Tenex Data Acquisition
Effective Date and addressed to Administrative Agent and each Bank,
covering such legal matters as Administrative Agent may reasonably
request and otherwise in form and substance satisfactory to
Administrative Agent.
(2) Written opinions of Blake, Cassels & Graydon and Stewart
McKelvey Stirling Scales, outside counsel to Bell-Tenex, dated as of
the Tenex Data Acquisition Effective Date and addressed to
Administrative Agent and each Bank, covering such legal matters as
Administrative Agent may reasonably request and otherwise in form and
substance satisfactory to Administrative Agent.
E. OTHER ITEMS.
(1) A certificate of the President, a Vice President or Chief
Financial Officer of Borrower, addressed to Administrative Agent and
the Banks and dated as of the Tenex Data Acquisition Effective Date,
certifying that:
(a) The representations and warranties set forth in
Paragraph 4.01 are true and correct as of such date;
(b) No Event of Default or Default has occurred and
is continuing as of such date; and
5.01(j)-2
(c) Each of the Credit Documents required to be
delivered to Administrative Agent or any Bank on or prior to
the Tenex Data Acquisition Effective Date is in full force and
effect as of such date;
(3) Certificates of insurance in forms acceptable to
Collateral Agent, naming Collateral Agent as additional insured or as
loss payee with respect to the assets of Bell-Tenex secured pursuant to
the Bell-Tenex Security Agreement and the Bell-Tenex Canadian Security
Documents;
(4) Such other evidence as any Bank may reasonably request to
establish the accuracy and completeness of the representations and
warranties and the compliance with the terms and conditions contained
in this Restated Credit Agreement and the other Credit Documents.
5.01(j)-3
ATTACHMENT B
FORM OF GUARANTOR CONSENT LETTER
December 31, 1999
TO: ADMINISTRATIVE AGENT,
As Administrative Agent for the Banks
and the Agents under the
Restated Credit Agreement referred to below
1. Reference is made to the following:
(a) The Third Amended and Restated Credit Agreement dated as
of November 12, 1998, among Borrower, the Banks, Administrative Agent
and Collateral Agent, as amended by that certain First Amendment to
Third Amended and Restated Credit Agreement dated as of May 13, 1999,
that certain Second Amendment to Third Amended and Restated Credit
Agreement dated as of July 21, 1999, that certain Third Amendment to
Third Amended and Restated Credit Agreement dated as of October 15,
1999 and that certain Fourth Amendment to Third Amended and Restated
Credit Agreement dated as of December 8, 1999 (as amended, the
"Restated Credit Agreement");
(b) [The Bell Canada Guaranty, dated as of November 12, 1998
(the " Bell Canada Guaranty"),] [The Bell-Tenex Guaranty, dated as of
November 20, 1998 (the "Bell-Tenex Guaranty"),] [The Bell-Future Tech
Guaranty, dated as of July 20, 1999 (the "Bell-Future Tech Guaranty"),]
executed by the undersigned ("Guarantor") in favor of the Banks and
Collateral Agent; and
(c) The Fifth Amendment to Third Amended and Restated Credit
Agreement, dated as of December 31, 1999, among Borrower, the Banks,
Administrative Agent and Collateral Agent (the " Fifth Amendment");
2. Guarantor hereby confirms that it is a wholly-owned subsidiary of
[Bell Microproducts Inc., a California corporation] [Bell Microproducts Canada
Inc., a California corporation ("Bell Canada") and that Bell Canada is a
wholly-owned subsidiary of Bell Microproducts Inc., a California corporation].
3. Guarantor hereby consents to the Fifth Amendment. Guarantor
expressly agrees that the Fifth Amendment shall in no way affect or alter the
rights, duties, or obligations of Guarantor, the Banks or Collateral Agent under
the [Bell Canada Guaranty] [Bell-Tenex Guaranty] [Bell-Future Tech Guaranty].
4. Pursuant to the [Bell Canada Guaranty] [Bell-Tenex Guaranty]
[Bell-Future Tech Guaranty], Guarantor continues to guaranty the payment when
due of, inter alia, all loans, advances, debts, liabilities and obligations,
however arising, owed by the Borrower to any Agent or any Bank of every kind and
description now existing or hereafter arising pursuant to the terms
B-1
of the Restated Credit Agreement as amended by the Fifth Amendment or any of the
other Credit Documents.
5. The [Pledge] [Security] Agreement, dated as of [November 20,
1998][July 20, 1999] executed by Guarantor in favor of Collateral Agent (the
"[Pledge] [Security] Agreement") and any other security granted to any Agent or
any of the Banks from time to time as security for the obligations of Guarantor
under the [Bell Canada Guaranty] [Bell-Tenex Guaranty] [Bell-Future Tech
Guaranty] remains in full force and effect and unamended, and the security
interests, mortgages, charges, liens, assignments, transfers and pledges granted
by Guarantor pursuant to the [Pledge] [Security] Agreement and such other
documents (if any) continue to extend to all debts, liabilities and obligations,
present or future, direct or indirect, absolute or contingent, matured or
unmatured, at any time due or accruing due, of Guarantor to any of the Banks and
any Agent arising under, in connection with or pursuant to the Restated Credit
Agreement and the other Credit Documents, as acknowledged and confirmed by this
Guarantor Consent Letter, notwithstanding the amendment of the Restated Credit
Agreement by the Fifth Amendment.
6. From and after the date hereof, the term "Restated Credit Agreement"
as used in the [Bell-Canada Guaranty] [Bell-Tenex Guaranty] [Bell-Future Tech
Guaranty] shall mean the Restated Credit Agreement, as amended by the Fifth
Amendment.
7. Guarantor's consent to the Fifth Amendment shall not be construed
(i) to have been required by the terms of the [Bell Canada Guaranty] [Bell-Tenex
Guaranty] [Bell-Future Tech Guaranty], any other Credit Document or any other
document, instrument or agreement relating thereto or (ii) to require the
consent of Guarantor in connection with any future amendment of the Restated
Credit Agreement or any other Credit Document.
B-2
IN WITNESS WHEREOF, Guarantor has executed this Guarantor Consent
Letter as of the day and year first written above.
[BELL/MICROPRODUCTS CANADA-TENEX DATA ULC]
[BELL MICROPRODUCTS CANADA INC.]
[BELL MICROPRODUCTS - FUTURE TECH, INC.]
By: _____________________________
Name:________________________
Title:_______________________
B-3