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Exhibit 10.4
FIVE-YEAR CREDIT AGREEMENT
DATED AS OF SEPTEMBER 15, 2000
AMONG
PIONEER-STANDARD ELECTRONICS, INC.,
THE FOREIGN SUBSIDIARY BORROWERS,
THE LENDERS,
AND
BANK ONE, MICHIGAN
AS AGENT
BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER AND SOLE BOOK RUNNER,
KEYBANK NATIONAL ASSOCIATION, AS SYNDICATION AGENT,
AND
ABN AMRO BANK N.V., AS DOCUMENTATION AGENT
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................................. 1
ARTICLE II. THE CREDITS..............................................................................................15
2.1. Commitment...........................................................................................15
2.2. Required Payments; Termination.......................................................................16
2.3. Ratable Loans........................................................................................16
2.4. Types of Advances....................................................................................16
2.5. Swing Line Loans.....................................................................................16
2.6. Facility Fee; Reductions and Increases in Aggregate Commitment.......................................17
2.7. Minimum Amount of Each Advance.......................................................................18
2.8. Optional Principal Payments..........................................................................19
2.9. Method of Selecting Types and Interest Periods for New Advances......................................19
2.10. Conversion and Continuation of Outstanding Advances..................................................19
2.11. Changes in Interest Rate, etc........................................................................20
2.12. Rates Applicable After Default.......................................................................20
2.13. Method of Payment....................................................................................20
2.14. Noteless Agreement; Evidence of Indebtedness.........................................................21
2.15. Telephonic Notices...................................................................................22
2.16. Interest Payment Dates; Interest and Fee Basis.......................................................22
2.17. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions......................22
2.18. Lending Installations................................................................................22
2.19. Non-Receipt of Funds by the Agent....................................................................22
2.20. Facility LCs.........................................................................................23
2.20.1. Issuance.............................................................................................23
2.20.2. Participations.......................................................................................23
2.20.3. Notice...............................................................................................23
2.20.4. Fees.................................................................................................23
2.20.5. Administration; Reimbursement by Lenders.............................................................24
2.20.6. Reimbursement........................................................................................24
2.20.7. Obligations Absolute.................................................................................25
2.20.8. Actions of LC Issuer.................................................................................25
2.20.09. Indemnification......................................................................................25
2.20.10. Lenders' Indemnification.............................................................................26
2.20.11. Facility LC Collateral Account.......................................................................26
2.20.12. Rights as a Lender...................................................................................26
2.21. Extension of Facility Termination Date...............................................................26
2.22. Replacement of Lender................................................................................27
2.23. Judgment Currency....................................................................................27
ARTICLE III. YIELD PROTECTION; TAXES.................................................................................28
3.1. Yield Protection.....................................................................................28
3.2. Changes in Capital Adequacy Regulations..............................................................29
3.3. Availability of Types of Advances....................................................................29
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3.4. Funding Indemnification..............................................................................29
3.5. Taxes................................................................................................30
3.6. Lender Statements; Survival of Indemnity.............................................................31
ARTICLE IV. CONDITIONS PRECEDENT.....................................................................................31
4.1. Initial Credit Extension.............................................................................32
4.2. Each Credit Extension................................................................................32
ARTICLE V. REPRESENTATIONS AND WARRANTIES............................................................................33
5.1. Existence and Standing...............................................................................33
5.2. Authorization and Validity...........................................................................33
5.3. No Conflict; Government Consent......................................................................33
5.4. Financial Statements.................................................................................34
5.5. Material Adverse Change..............................................................................34
5.6. Taxes................................................................................................34
5.7. Litigation and Contingent Obligations................................................................34
5.8. Subsidiaries.........................................................................................34
5.9. ERISA............................................................................................... 34
5.10. Accuracy of Information..............................................................................35
5.11. Regulations T, U and X...............................................................................35
5.12. Material Agreements..................................................................................35
5.13. Compliance With Laws.................................................................................35
5.14. Ownership of Properties..............................................................................35
5.15. Plan Assets; Prohibited Transactions.................................................................35
5.16. Environmental Matters................................................................................35
5.17. Investment Company Act...............................................................................36
5.18. Public Utility Holding Company Act...................................................................36
ARTICLE VI. COVENANTS................................................................................................36
6.1. Financial Reporting..................................................................................36
6.2. Use of Proceeds......................................................................................37
6.3. Notice of Default....................................................................................37
6.4. Conduct of Business..................................................................................37
6.5. Taxes ..............................................................................................38
6.6. Insurance............................................................................................38
6.7. Compliance with Laws.................................................................................38
6.8. Maintenance of Properties............................................................................38
6.9. Inspection...........................................................................................38
6.10. Indebtedness.........................................................................................38
6.11. Merger...............................................................................................39
6.12. Sale of Assets.......................................................................................39
6.13. Investments and Acquisitions.........................................................................40
6.14. Liens................................................................................................41
6.15. Affiliates...........................................................................................42
6.16. Financial Contracts..................................................................................42
6.17. Financial Covenants..................................................................................42
6.17.1. Fixed Charge Coverage Ratio..........................................................................42
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6.17.2. Leverage Ratio.......................................................................................42
6.17.3. Minimum Net Worth....................................................................................43
6.18. Guaranties...........................................................................................43
6.19. Other Indebtedness...................................................................................43
ARTICLE VII. DEFAULTS................................................................................................44
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.........................................................46
8.1. Acceleration; Facility LC Collateral Account.........................................................46
8.2. Amendments...........................................................................................47
8.3. Preservation of Rights...............................................................................48
ARTICLE IX. GENERAL PROVISIONS........................................................................................49
9.1. Survival of Representations..........................................................................49
9.2. Governmental Regulation..............................................................................49
9.3. Headings.............................................................................................49
9.4. Entire Agreement.....................................................................................49
9.5. Several Obligations; Benefits of this Agreement......................................................49
9.6. Expenses; Indemnification............................................................................49
9.7. Numbers of Documents.................................................................................50
9.8. Accounting...........................................................................................50
9.9. Severability of Provisions...........................................................................51
9.10. Nonliability of Lenders..............................................................................51
9.11. Confidentiality......................................................................................51
9.12. Nonreliance..........................................................................................51
9.13. Disclosure...........................................................................................51
ARTICLE X. THE AGENT..................................................................................................51
10.1. Appointment; Nature of Relationship..................................................................51
10.2. Powers...............................................................................................52
10.3. General Immunity.....................................................................................52
10.4. No Responsibility for Loans, Recitals, etc...........................................................52
10.5. Action on Instructions of Lenders....................................................................52
10.6. Employment of Agents and Counsel.....................................................................53
10.7. Reliance on Documents; Counsel.......................................................................53
10.8. Agent's Reimbursement and Indemnification............................................................53
10.9. Notice of Default....................................................................................53
10.10. Rights as a Lender...................................................................................53
10.11. Lender Credit Decision...............................................................................54
10.12. Successor Agent......................................................................................54
10.13. Agent and Arranger Fees..............................................................................54
10.14. Delegation to Affiliates.............................................................................55
10.15. Co-Agents, Documentation Agent, Syndication Agent, etc...............................................55
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ARTICLE XI. SETOFF; RATABLE PAYMENTS..................................................................................55
11.1. Setoff ..............................................................................................55
11.2. Ratable Payments.....................................................................................55
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.......................................................55
12.1. Successors and Assigns...............................................................................55
12.2. Participations.......................................................................................56
12.2.1. Permitted Participants; Effect...........................................................56
12.2.2. Voting Rights............................................................................56
12.2.3. Benefit of Setoff........................................................................56
12.3. Assignments..........................................................................................57
12.3.1. Permitted Assignments....................................................................57
12.3.2. Effect; Effective Date...................................................................57
12.4. Dissemination of Information.........................................................................57
12.5. Tax Treatment........................................................................................58
ARTICLE XIII. NOTICES................................................................................................58
13.1. Notices..............................................................................................58
13.2. Change of Address....................................................................................58
ARTICLE XIV. COUNTERPARTS.............................................................................................58
ARTICLE XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.............................................59
15.1. CHOICE OF LAW........................................................................................59
15.2. CONSENT TO JURISDICTION..............................................................................59
15.3. WAIVER OF JURY TRIAL.................................................................................59
PRICING SCHEDULE.......................................................................................................75
EXHIBIT A. FORM OF OPINION...........................................................................................77
EXHIBIT B. COMPLIANCE CERTIFICATE....................................................................................79
EXHIBIT C. ASSIGNMENT AGREEMENT......................................................................................81
EXHIBIT D. LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION............................................................99
EXHIBIT E. NOTE ..............................................................................................90
SCHEDULE 1. SUBSIDIARIES AND OTHER INVESTMENTS.......................................................................92
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SCHEDULE 2. INDEBTEDNESS AND LIENS...................................................................................93
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FIVE-YEAR CREDIT AGREEMENT
This Five-Year Credit Agreement, dated as of September 15, 2000, is
among Pioneer-Standard Electronics, Inc., an Ohio corporation, the Foreign
Subsidiary Borrowers, the Lenders and Bank One, Michigan, a Michigan banking
corporation having its principal office in Detroit, Michigan, as LC Issuer and
as Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any ongoing business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Advance" means a borrowing hereunder, (i) made by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Loans of the same Type and, in the
case of Eurodollar Loans, for the same Interest Period. The term "Advance" shall
include Swing Line Loans unless otherwise expressly provided.
"Affected Lender" is defined in Section 2.22.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of Capital Stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as increased or reduced from time to time pursuant to the terms
hereof.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding
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Credit Exposure of all the Lenders.
"Agreement" means this Five-Year Credit Agreement, as it may be
amended or modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Agreed Currencies" means Dollars and any Eligible Currencies.
"Agreement for Inventory Purchases" means that certain Agreement for
Inventory Financing (Unsecured), dated as of March 31, 1998, by and between IBM
Credit Corporation and Borrower, as amended or modified from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum at
which Facility Fees are accruing on the Aggregate Commitment (without regard to
usage) at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the president, the chief executive
officer or the chief financial officer of the Borrower or any other person
designated in writing by the president, the chief executive officer or the chief
financial officer of the Borrower to act as an Authorized Officer in connection
herewith, acting singly.
"Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
"Bank One" means Bank One, Michigan, a Michigan banking corporation
having its principal office in Detroit, Michigan, in its individual capacity,
and its successors.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership; and
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(3) with respect to any other Person, the board or committee or manager
of such Person serving a similar function.
"Borrower" means Pioneer-Standard Electronics, Inc., an Ohio
corporation, and its permitted successors and assigns.
"Borrowers" means the Borrower and the Foreign Subsidiary Borrowers.
"Borrowing Base" means, at any time, an amount equal to the difference
of:
(a) the sum of (i) 85% of Eligible Accounts Receivable plus (ii) the
lesser of (y) 50% of Eligible Inventory or (z) $175,000,000, minus
(b) an amount equal to: (i) the aggregate outstanding principal balance
of all loans under the 364-Day Credit Agreement; plus (ii) the aggregate
outstanding principal amount of the Senior Unsecured Notes; minus (iii) the
aggregate amount of cash balances of the Borrower and its Subsidiaries at such
time.
For purposes of this definition, the amount of all Eligible Inventory and
Eligible Accounts Receivable shall be expressed as the Dollar Amount thereof.
"Borrowing Base Certificate" means a borrowing base certificate in a
form approved by the Agent from time to time.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Detroit and New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Detroit for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with Agreement Accounting Principles.
"Capital Stock" means (i) in the case of any corporation, all capital
stock and any securities exchangeable for or convertible into capital stock and
any warrants, rights or other options to purchase or otherwise acquire capital
stock or such securities or any other form of equity securities, (ii) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
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"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-2 or better by S&P or P-2 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"Change in Control" means the occurrence of either of the following:
(i) the acquisition by any Person, or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of 30% or more of
the outstanding shares of voting Capital Stock of the Borrower; or (ii) the
first day on which a majority of the members of the Board of Directors of the
Borrower are not Continuing Directors.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Lender, the obligation of such Lender to
make Revolving Loans to, and participate in Facility LCs issued upon the
application of, the Borrower and to participate in Swing Line Loans made to a
Borrower, in an aggregate amount not exceeding the amount set forth opposite its
signature below, as it may be modified as a result of any assignment that has
become effective pursuant to Section 12.3.2 or as otherwise modified from time
to time pursuant to the terms hereof.
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Borrower and its Subsidiaries calculated
on a consolidated basis for such period.
"Consolidated Debt" means at any time the Indebtedness of the Borrower
and its Subsidiaries calculated on a consolidated basis as of such time,
excluding Indebtedness outstanding under the Agreement for Inventory Purchases
and the Convertible Debentures.
"Consolidated EBITDA" means (a) Consolidated Net Income, plus (b) to
the extent deducted in determining such Consolidated Net Income, Consolidated
Interest Expense, income taxes and depreciation and amortization expense, MINUS
(c) to the extent included in determining such Consolidated Net Income, each of
the following, without duplication: (i) the income of any Person (other than a
Wholly-Owned Subsidiary of the Borrower) in which any Person other than the
Borrower or any of its Subsidiaries has a joint interest or a partnership
interest or other ownership interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its
Subsidiaries by such Person during such period, (ii) gains (or plus non-cash
losses) from the sale, exchange, transfer or other disposition of property or
assets of the Borrower and its Subsidiaries, and related tax effects in
accordance with
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Agreement Accounting Principles, (iii) any other extraordinary, unusual or
non-recurring gains or other income (or plus other extraordinary, unusual or
non-recurring non-cash losses) not from the continuing operations of the
Borrower or its Subsidiaries, and related tax effects in accordance with
Agreement Accounting Principles and (iv) the income of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary.
"Consolidated Interest Expense" means, with reference to any period,
the interest expense of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period, excluding any interest expense attributable
solely to the Convertible Debentures.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Borrower and its Subsidiaries plus, without
duplication, the aggregate outstanding principal amount of the Convertible
Debentures, all as calculated on a consolidated basis as of such time and
excluding foreign currency translation adjustments.
"Consolidated Rentals" means, with reference to any period, the Rentals
of the Borrower and its Subsidiaries calculated on a consolidated basis for such
period.
"Consolidated Tangible Net Worth" means, as of any date, the difference
of (i) Consolidated Net Worth, minus (ii) to the extent included in determining
the amount under the foregoing clause (i), the net book value of goodwill, cost
in excess of fair value of net assets acquired, patents, trademarks, tradenames
and copyrights, treasury stock and all other assets which are deemed intangible
assets under Agreement Accounting Principles.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Borrower who:
(1) was a member of such Board of Directors on the date of this
Agreement; or
(2) was nominated for election to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
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"Conversion/Continuation Notice" is defined in Section 2.9.
"Convertible Debentures" means the Series A 6 3/4% Junior Convertible
Subordinated Debentures of Borrower, due March 31, 2028, issued in an aggregate
original principal amount of up to $150,000,000, under that certain Junior
Subordinated Indenture, dated as of March 23, 1998, of Borrower to Wilmington
Trust Company, as trustee, as supplemented by that certain First Supplemental
Indenture, dated as of March 23, 1998, of Borrower to Wilmington Trust Company,
as trustee.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Default" means an event described in Article VII.
"Defaulting Lender" means any Lender that (i) on any Borrowing Date
fails to make available to the Agent such Lender's Loans required to be made to
the Borrower on such Borrowing Date, (ii) shall not have made a payment to the
Agent required under this Agreement or (iii) shall not have made a payment to
the LC Issuer or the Swing Line Lender required under this Agreement. Once a
Lender becomes a Defaulting Lender, such Lender shall continue as a Defaulting
Lender until such time as such Defaulting Lender makes available to the Agent,
the amount of such Defaulting Lender's Loans and to the LC Issuer and the Swing
Line Lender, such payments requested by the LC Issuer and by the Swing Line
Lender together with all other amounts required to be paid to the Agent and/or
the LC Issuer and/or the Swing Line Lender pursuant to this Agreement.
"Dollar Amount" of any currency at any date shall mean (i) the amount
of such currency if such currency is Dollars or (ii) the equivalent in such
currency of such amount of Dollars if such currency is any currency other than
Dollars, calculated on the basis of the arithmetical mean of the buy and sell
spot rates of exchange of the Agent for such currency on the London market at
11:00 a.m., London time, on such date.
"Dollars" and "$" shall mean the lawful currency of the United States
of America.
"Domestic Subsidiary" means each present and future Subsidiary of the
Borrower which is not a Foreign Subsidiary.
"Eligible Accounts Receivable" means, as of any date, those accounts
receivable of the Borrower and its Subsidiaries, on a consolidated basis, valued
at the face amount thereof less, without duplication, such reserves as may be
established by the Borrower or on the books and records of the Borrower and less
such reserves as the Agent elects to establish in its reasonable credit
judgment; but shall not include any such account receivable that for any other
reason is at any time deemed by the Agent to be ineligible in its reasonable
credit judgment.
"Eligible Currency" means any currency other than Dollars (i) that is
readily available, (ii) that is freely traded, (iii) in which deposits are
customarily offered to banks in the London interbank market, (iv) which is
convertible into Dollars in the international interbank market, (v) as to which
an Equivalent Amount may be readily calculated and (vi) as to which the Swing
Line Lender has agreed may be an Eligible Currency. If, after the designation by
the Swing Line Lender of any currency as an Eligible Currency, (x) currency
control or other exchange regulations are imposed in the country in which such
currency is issued with the result that different types of such currency are
introduced, (y) such currency
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is, in the determination of the Swing Line Lender, no longer readily available
or freely traded or (z) in the determination of the Swing Line Lender,
an Equivalent Amount of such currency is not readily calculable, the Swing Line
Lender shall promptly notify the Borrowers, and such currency shall no longer be
an Eligible Currency until such time as the Swing Line Lender agrees to
reinstate such currency as an Eligible Currency and promptly, but in any event
within five Business Days of receipt of such notice from the Swing Line Lender,
the relevant Borrower shall repay all Swing Line Loans in such affected currency
or convert such Loans into Loans in Dollars or another Eligible Currency,
subject to the other terms set forth in Article II.
"Eligible Inventory" means, as of any date, that inventory (including
raw materials, work in process and finished goods) of the Borrower and its
Subsidiaries, on a consolidated basis, less, without duplication, such reserves
as may be established by the Borrower or on its books and records and less such
reserves as the Agent elects to establish in its reasonable credit judgment; but
shall not include any such inventory (a) that does not constitute inventory
readily salable or usable in the business of the Borrower or any Subsidiary, (b)
that bears a trademark or trade name of International Business Machines
Corporation or is otherwise purchased or financed under the Agreement for
Inventory Purchases or (c) that for any other reason is at any time deemed by
the Agent to be ineligible in its reasonable credit judgment.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"Equivalent Amount" of any currency with respect to any amount of
Dollars at any date shall mean the equivalent in such currency of such amount of
Dollars, calculated on the basis of the arithmetical mean of the buy and sell
spot rates of exchange of the Agent for such other currency at 11:00 a.m.,
London time, on the date on or as of which such amount is to be determined.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, and having a maturity equal to such Interest
Period, provided that, (i) if Reuters Screen FRBD is not available to the Agent
for any reason, the applicable Eurodollar Base Rate for the relevant Interest
Period shall instead be the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars as reported by any other generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, and (ii) if no such British Bankers'
Association Interest Settlement Rate is available to the Agent, the applicable
Eurodollar Base Rate for the relevant Interest Period shall instead be the rate
determined by the Agent to be the rate at which Bank
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One or one of its Affiliate banks offers to place deposits in U.S.
dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of Bank One's relevant Eurodollar
Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Extension Request" is defined in Section 2.21.
"Facility LC" is defined in Section 2.20.1.
"Facility LC Application" is defined in Section 2.20.3.
"Facility LC Collateral Account" is defined in Section 2.20.11.
"Facility Termination Date" means September 15, 2005 or any later date
as may be specified as the Facility Termination Date in accordance with Section
2.21 or any earlier date on which the Aggregate Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Detroit
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
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"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.12, bears interest at the Floating Rate.
"Foreign Subsidiary" means each Subsidiary organized under the laws of
a jurisdiction outside of the United States.
"Foreign Subsidiary Borrower" means each Foreign Subsidiary designated
as a Foreign Subsidiary Borrower hereunder from time to time in accordance with
Section 8.2.
"Guarantor" means, with respect to any Obligation of any Foreign
Subsidiary Borrower, the Borrower and, with respect to any Obligation of the
Borrower, any Subsidiary, if any, of the Borrower required to execute a Guaranty
at any time pursuant to Section 6.18.
"Guaranty" means each guaranty executed by a Guarantor in favor of the
Agent, for the ratable benefit of the Lenders, pursuant to the Agreement an in
form and substance satisfactory to the Agent, as they may be amended or modified
and in effect from time to time.
"Indebtedness" of a Person means such Person's (i) any obligation for
borrowed money or other financial accommodation which in accordance with
Agreement Accounting Principles would be shown as a liability on the
consolidated balance sheet of such Person, and including without limitation the
amount outstanding under the Agreement for Inventory Purchases, the Convertible
Debenture and the Senior Unsecured Notes, obligations representing the deferred
purchase price of Property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), obligations, whether or not assumed, secured by Liens or payable out of
the proceeds or production from Property now or hereafter owned or acquired by
such Person, obligations which are evidenced by notes, acceptances or other
instruments, obligations of such Person to purchase securities or other Property
arising out of or in connection with the sale of the same or substantially
similar securities or Property, and Capitalized Lease Obligations, (ii)
Off-Balance Sheet Liabilities, and (iii) Contingent Obligations with respect to
any of the foregoing.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit
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owned by such Person; and structured notes, derivative financial instruments
and other similar instruments or contracts owned by such Person.
"LC Fee" is defined in Section 2.20.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" is defined in Section 2.20.5.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns. Unless otherwise
specified, the term "Lenders" includes Bank One in its capacity as Swing Line
Lender.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.18.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as of any date of calculation, the ratio of (i)
Consolidated Debt outstanding on such date to (ii) Consolidated EBITDA for the
Borrower's then most-recently ended four fiscal quarters.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means a Revolving Loan or a Swing Line Loan.
"Loan Documents" means this Agreement, the Facility LC Applications,
the Guaranty, any Notes issued pursuant to Section 2.14, any Pledge Agreements
and any other agreement or document executed in connection with any of the
foregoing.
"Margin Stock" means "margin stock" as defined in Regulations U or X or
"marginable OTC stock" or "foreign margin stock" within the meaning of
Regulation T.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of any Borrower to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Agent, the LC Issuer or the Lenders thereunder.
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"Material Indebtedness" is defined in Section 7.5.
"Modify" and "Modification" are defined in Section 2.20.1.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"National City Credit Agreement" means the Credit Agreement dated as of
March 27, 1998 among Pioneer-Standard Electronics, Inc., the lenders party
thereto, and National City Bank, as agent for such lenders.
"Non-U.S. Borrower" is defined in Section 3.1(b).
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.14.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the Agent, the LC Issuer or any
indemnified party arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Revolving Loans outstanding at
such time, plus (ii) an amount equal to its Pro Rata Share of the aggregate
principal amount of Swing Line Loans and LC Obligations outstanding at such
time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each calendar quarter.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
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"Permitted Securitization Transaction" is defined in Section 6.12(v).
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pledge Agreement" means each pledge agreement and any other agreement
or document executed and delivered by the Borrower or any of its Subsidiaries to
the Agent, each in form and substance satisfactory to the Agent, pursuant to
which the Borrower or such Subsidiary grants a pledge on any Capital Stock of
any Foreign Subsidiary, including any amendment, modification, renewal or
replacement of any such pledge agreement or other agreement or document.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Commitment.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into between
the Borrower and any Lender or Affiliate thereof which is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures.
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
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"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.20 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having at least 51%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the Aggregate Outstanding
Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Loan" means, with respect to a Lender, such Lender's loan
made pursuant to its commitment to lend set forth in Section 2.1 (or any
conversion or continuation thereof).
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
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"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Securitization Entity" means a wholly-owned Subsidiary of the Borrower
that engages in no activities other than Permitted Securitization Transactions
and any necessary related activities and owns no assets other than as required
for Permitted Securitization Transactions and (i) no portion of the Indebtedness
(contingent or otherwise) of which is guaranteed by the Borrower or any
Subsidiary of the Borrower or is recourse to or obligates the Borrower or any
Subsidiary of the Borrower in any way, other than pursuant to customary
representations, warranties, covenants, indemnities and other obligations
entered into in connection with a Permitted Securitization Transaction, and (ii)
to which neither the Borrower nor any Subsidiary of the Borrower has any
material obligation to maintain or preserve such entity's financial condition or
cause such entity to achieve certain levels of operating results.
"Senior Unsecured Notes" means the 8 1/2% Senior Notes of Borrower, due
August 2006, issued in an aggregate original principal amount of $150,000,000,
under that certain Indenture, dated as of August 1, 1996, of Borrower to Star
Bank, N.A., as trustee.
"Significant Subsidiary" means any Subsidiary which would be a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X under the
Securities Exchange Act of 1934, as amended.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
"Swing Line Borrowing Notice" is defined in Section 2.5.2.
"Swing Line Lender" means Bank One or such other Lender which may
succeed to its rights and obligations as Swing Line Lender pursuant to the terms
of this Agreement and shall include, without limitation, any office, branch,
subsidiary or affiliate of Bank One or such other Lender selected by Bank One or
such other Lender from time to time as the provider of any Swing Line Loan.
"Swing Line Loan" means a Loan made available to a Borrower by the
Swing Line Lender pursuant to Section 2.5.
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"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"364-Day Credit Agreement" means the 364-Day Credit Agreement dated the
date hereof among the Borrower, the Lenders and the Agent, as amended, modified,
replaced or refinanced from time to time.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
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2.1. COMMITMENT. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to (i) make Revolving Loans to
the Borrower and (ii) participate in Facility LCs and Swing Line Loans issued or
made upon the request of the Borrower, provided that, after giving effect to the
making of each such Loan and the issuance of each such Facility LC, such
Lender's Outstanding Credit Exposure shall not exceed its Commitment and the
Dollar Amount of the Aggregate Outstanding Credit Exposure shall not exceed the
lesser of the Aggregate Commitments and the Borrowing Base. Subject to the terms
of this Agreement, the Borrower may borrow, repay and reborrow at any time prior
to the Facility Termination Date. The Commitments to extend credit hereunder
shall expire on the Facility Termination Date. The LC Issuer will issue Facility
LCs hereunder on the terms and conditions set forth in Section 2.20. The Swing
Line Lender may make Swing Line Loans hereunder on the terms and conditions set
forth in Section 2.5.
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2.2. REQUIRED PAYMENTS; TERMINATION. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full by the Borrowers
on the Facility Termination Date. Additionally, the Borrowers shall promptly pay
the Aggregate Outstanding Credit Exposure to the extent the Dollar Amount
thereof at any time exceeds the lesser of the Aggregate Commitments and the
Borrowing Base at such time.
2.3. RATABLE LOANS. Each Advance hereunder (other than any Swing Line
Loan) shall consist of Revolving Loans made from the several
Lenders ratably according to their Pro Rata Shares.
2.4. TYPES OF ADVANCES. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.9 and 2.10.
2.5. SWING LINE LOANS.
2.5.1. AMOUNT OF SWING LINE LOANS. The Borrower may request the
Swing Line Lender to make, and the Swing Line Lender may, in its sole
discretion, make Swing Line Loans in any Agreed Currencies requested by
the Borrower and to any Borrower requested by the Borrower from time to
time on any Business Day during the period from the Effective Date
until the Facility Termination Date in an aggregate principal amount
not to exceed at any time the lesser of $30,000,000 or the Dollar
Amount thereof in Eligible Currencies, provided that the Dollar Amount
of the Aggregate Outstanding Credit Exposure shall not at any time
exceed the lesser of the Aggregate Commitments and the Borrowing Base,
and provided further that at no time shall the sum of (i) the Swing
Line Lender's Pro Rata Share of the Swing Line Loans, plus (ii) the
outstanding Revolving Loans made by the Swing Line Lender pursuant to
Section 2.1, exceed the Swing Line Lender's Commitment at such time.
Within the limits of this Section 2.5, so long as the Swing Line
Lender, in its sole discretion, elects to make Swing Line Loans, the
Borrowers may borrow and reborrow under this Section 2.5.1.
2.5.2. BORROWING NOTICE. The Borrower shall deliver to the Agent
and the Swing Line Lender irrevocable notice (a "Swing Line Borrowing
Notice") not later than noon (Detroit time) on the Borrowing Date of
each Swing Line Loan, specifying (i) the applicable Borrowing Date
(which date shall be a Business Day) and the applicable Borrower, and
(ii) the aggregate amount of the requested Swing Line Loan which shall
be an amount not less than $100,000 or the Equivalent Amount thereof in
any Eligible Currency. Each Swing Line Loan shall bear interest at the
Floating Rate or, in the case of any Swing Line Loan in any Eligible
Currency, such rate offered by the Swing Line Lender, and shall mature
as agreed to by the Swing Line Lender and the Borrower, not to exceed
30 days after the date thereof.
2.5.3. MAKING OF SWING LINE LOANS. If a Swing Line Loan is to be
made, the Swing Line Lender shall make available the Swing Line Loan to
the relevant Borrower, in immediately available funds or same day
funds, at such Lending Installation of the Swing Line Lender as
determined by the Swing Line Lender.
2.5.4. REPAYMENT OF SWING LINE LOANS. Each Swing Line Loan shall
be paid in full by the Borrower thereof on demand by the Swing Line
Lender or such other date agreed to by the Swing Line Lender not to
exceed the date 30 days after the Borrowing Date for such Swing Line
Loan. Any Swing Line Loan outstanding in any currency other than
Dollars shall be immediately and automatically converted to and
redenominated in Dollars equal to the Dollar Amount of each such Swing
Line Loan determined as of the date of such conversion at any time a
Swing Line
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Loan is to be refunded by a Revolving Loan or when the
participation of any Lender in such Swing Line Loan is to be funded,
and the Borrower shall immediately and automatically assume all
obligations thereunder jointly and severally with the applicable
Foreign Subsidiary Borrower. In addition, the Swing Line Lender may at
any time in its sole discretion with respect to any outstanding Swing
Line Loan require each Lender (including the Swing Line Lender) to make
a Revolving Loan in the amount of such Lender's Pro Rata Share of such
Swing Line Loan (including, without limitation, any interest accrued
and unpaid thereon), for the purpose of repaying such Swing Line Loan.
Not later than noon (Detroit time) on the date of any notice received
pursuant to this Section 2.5.4, each Lender shall make available its
required Revolving Loan, in funds immediately available in Detroit to
the Agent at its address specified pursuant to Article XIII. Revolving
Loans made pursuant to this Section 2.5.4 shall initially be Floating
Rate Loans and thereafter may be continued as Floating Rate Loans or
converted into Eurodollar Loans in the manner provided in Section 2.10
and subject to the other conditions and limitations set forth in this
Article II. Such Lender's obligation to make Revolving Loans pursuant
to this Section 2.5.4 to repay Swing Line Loans shall be unconditional,
continuing, irrevocable and absolute and shall not be affected by any
circumstances, including, without limitation, (a) any set-off,
counterclaim, recoupment, defense or other right which such Lender may
have against the Agent, the Swing Line Lender or any other Person, (b)
the occurrence or continuance of a Default or Unmatured Default, (c)
any adverse change in the condition (financial or otherwise) of the
Borrower, or (d) any other circumstances, happening or event
whatsoever. In the event that any Lender fails to make payment to the
Agent of any amount due under this Section 2.5.4, the Agent shall be
entitled to receive, retain and apply against such obligation the
principal and interest otherwise payable to such Lender hereunder until
the Agent receives such payment from such Lender or such obligation is
otherwise fully satisfied. In addition to the foregoing, if for any
reason any Lender fails to make payment to the Agent of any amount due
under this Section 2.5.4, such Lender shall be deemed, at the option of
the Agent, to have unconditionally and irrevocably purchased from the
Swing Line Lender, without recourse or warranty, an undivided interest
and participation in the applicable Swing Line Loan in the amount of
such Revolving Loan, and such interest and participation may be
recovered from such Lender together with interest thereon at the
Federal Funds Effective Rate for each day during the period commencing
on the date of demand and ending on the date such amount is received.
On the Facility Termination Date, the Borrowers shall repay in full the
outstanding principal balance of the Swing Line Loans.
2.5.5 MARKET DISRUPTION. If there shall occur on or prior to the
date of any Advance in any Eligible Currency any change in national or
international financial, political or economic conditions or currency
exchange rates or exchange controls which would in the reasonable
opinion of the Agent make it impracticable for any Swing Line Loan to
be denominated in the Agreed Currency specified by the Borrower, then
the Agent shall forthwith give notice thereof to the Borrower, and such
Loans shall not be denominated in such Eligible Currency but shall be
made on such Borrowing Date in Dollars, in an aggregate principal
amount equal to the Dollar Amount of the aggregate principal amount
specified in the related Borrowing Notice, as the case may be, as
Floating Rate Loans, unless the Borrower notifies the Agent at least
one Business Day before such date that (i) it elects not to borrow on
such date or (ii) it elects to borrow on such date in a different
Agreed Currency, as the case may be, in which the denomination of such
Loans would in the opinion of the Agent be practicable and in an
aggregate principal amount equal to the Dollar Amount of the aggregate
principal amount specified in the related Borrowing Notice.
2.6. FACILITY FEE; REDUCTIONS AND INCREASES IN AGGREGATE COMMITMENT.
(i) The Borrower
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agrees to pay to the Agent for the account of each Lender according to its Pro
Rata Share a facility fee at a per annum rate equal to the Applicable
Fee Rate on the average daily amount of such Lender's Commitment, whether used
or unused, from the date hereof to and including the Facility Termination Date,
payable on each Payment Date hereafter and on the Facility Termination Date.
(ii) The Borrower may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Lenders in integral multiples of
$10,000,000, upon at least five Business Days' written notice to the Agent,
which notice shall specify the amount of any such reduction, provided, however,
that the amount of the Aggregate Commitment may not be reduced below the
Aggregate Outstanding Credit Exposure. All accrued facility fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Credit Extensions hereunder.
(iii) With the prior consent of the Agent, the Borrower may request to
increase the Aggregate Commitment in increments of $5,000,000, provided that the
aggregate increase in the Aggregate Commitment from the date hereof shall not
exceed $50,000,000. Any such request to increase the Aggregate Commitment shall
be deemed to be a certification by the Borrower that at the time of such
request, there exists no Default or Unmatured Default and the representations
and warranties contained in Article V are true and correct as of such date. Any
request from the Borrower to increase the Aggregate Commitment shall be
implemented by one or more existing Lenders agreeing to increase their
Commitments (provided that no Lender shall have any obligation to increase its
Commitment) or by one or more new lenders agreeing to become a Lender hereunder
or by any combination of the foregoing, as determined by the Agent and the
Arranger in consultation with the Borrower. Prior to any such increase in the
Aggregate Commitment becoming effective, the Agent shall have received:
(a) copies, certified by the secretary of the Borrower of its Board of
Directors' resolutions and of resolutions or actions of any other body
authorizing the increase in the Aggregate Commitment;
(b) a certificate, signed by the chief financial officer of the
Borrower, showing that after giving effect to the increase in the
Aggregate Commitment, no Default or Unmatured Default shall occur and
the Borrower shall be in compliance with all covenants in this
Agreement;
(c) copies of all governmental and nongovernmental consents, approvals,
authorizations, declarations, registrations or filings required on the
part of the Borrower or any Guarantor in connection with the increase
in the Aggregate Commitment, certified as true and correct in full
force and effect as of the date of the increase by a duly authorized
officer of the Borrower, or if none are required, a certificate of such
officer to that effect;
(d) evidence satisfactory to the Agent that no Material Adverse Effect
shall have occurred with respect to the Borrower and its Subsidiaries
since the most recent financial statements provided to the Lenders
hereunder; and
(e) such other documents and conditions as the Agent or its counsel may
have reasonably requested.
2.7. MINIMUM AMOUNT OF EACH ADVANCE. Each Eurodollar Advance shall be
in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), and each Floating Rate Advance (other than an Advance to repay Swing
Line Loans) shall be in the minimum amount of
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$2,500,000 (and in multiples of $1,000,000 if in excess thereof),
provided, however, that any Floating Rate Advance may be in the amount of the
Available Aggregate Commitment.
2.8. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances (other
than Swing Line Loans), or, in a minimum aggregate amount of $2,500,000 or any
integral multiple of $1,000,000 in excess thereof, any portion of the
outstanding Floating Rate Advances (other than Swing Line Loans) upon two
Business Days' prior notice to the Agent. The Borrower may at any time pay,
subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Swing Line Loans,
or, in a minimum amount of $100,000 and increments of $50,000 in excess thereof,
any portion of the outstanding Swing Line Loans, with notice to the Agent and
the Swing Line Lender by noon (Detroit time) on the date of repayment. The
Borrower may from time to time pay, subject to the payment of any funding
indemnification amounts required by Section 3.4 but without penalty or premium,
all outstanding Eurodollar Advances, or, in a minimum aggregate amount of
$5,000,000 or any integral multiple of $1,000,000 in excess thereof, any portion
of the outstanding Eurodollar Advances upon three Business Days' prior notice to
the Agent.
2.9. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than noon (Detroit time) at least one Business Day before the Borrowing
Date of each Floating Rate Advance (other than a Swing Line Loan) and three
Business Days before the Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than 1:00 pm (Detroit time) on each Borrowing Date, each Lender shall
make available its Revolving Loan or Revolving Loans in funds immediately
available in Detroit to the Agent at its address specified pursuant to Article
XIII. The Agent will make the funds so received from the Lenders available to
the Borrower at the Agent's aforesaid address.
2.10. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. Floating
Rate Advances (other than Swing Line Loans) shall continue as Floating Rate
Advances unless and until such Floating Rate Advances are converted into
Eurodollar Advances pursuant to this Section 2.10 or are repaid in accordance
with Section 2.8. Each Eurodollar Advance shall continue as a Eurodollar Advance
until the end of the then applicable Interest Period therefor, at which time
such Eurodollar Advance shall be automatically converted into a Floating Rate
Advance unless (x) such Eurodollar Advance is or was repaid in accordance with
Section 2.8 or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance
for the same or another Interest Period. Subject to the terms of Section 2.7,
the Borrower may elect from time to time to convert all or any part of a
Floating Rate Advance (other than a Swing Line Loan) into a Eurodollar Advance.
The Borrower shall give the Agent irrevocable notice (a "Conversion/Continuation
Notice") of each conversion of a Floating Rate Advance into a Eurodollar Advance
or continuation of a Eurodollar Advance not later than noon
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(Detroit time) at least three Business Days prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest
Period applicable thereto.
2.11. CHANGES IN INTEREST RATE, ETC. Each Floating Rate Advance (other
than a Swing Line Loan) shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to Section 2.10, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.10 hereof, at a rate per annum
equal to the Floating Rate for such day. Each Swing Line Loan shall bear
interest on the outstanding principal amount thereof, for each day from and
including the day such Swing Line Loan is made to but excluding the date it is
paid, at a rate per annum equal to the Floating Rate for such day or, in the
case of any Swing Line Loan in any Eligible Currency, such rate offered by the
Swing Line Lender. Changes in the rate of interest on that portion of any
Advance maintained as a Floating Rate Advance will take effect simultaneously
with each change in the Alternate Base Rate. Each Eurodollar Advance shall bear
interest on the outstanding principal amount thereof from and including the
first day of the Interest Period applicable thereto to (but not including) the
last day of such Interest Period at the interest rate determined by the Agent as
applicable to such Eurodollar Advance based upon the Borrower's selections under
Sections 2.9 and 2.10 and otherwise in accordance with the terms hereof. No
Interest Period may end after the Facility Termination Date.
2.12. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the
contrary contained in Section 2.9 or 2.10, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of a
Default the Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each Eurodollar Advance
shall bear interest for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum, (ii) each
Floating Rate Advance and each Swing Line Loan in any Eligible Currency shall
bear interest at a rate per annum equal to the Floating Rate in effect from time
to time plus 2% per annum and (iii) the LC Fee shall be increased by 2% per
annum, provided that, during the continuance of a Default under Section 7.6 or
7.7, the interest rates set forth in clauses (i) and (ii) above and the increase
in the LC Fee set forth in clause (iii) above shall be applicable to all Credit
Extensions without any election or action on the part of the Agent or any
Lender.
2.13. METHOD OF PAYMENT. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall (except in the case of Reimbursement Obligations for which the LC
Issuer has not been fully indemnified by the Lenders, with
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respect to repayments of Swing Line Loans or as otherwise specifically required
hereunder) be applied ratably by the Agent among the Lenders. Each
payment delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds that the Agent
received at its address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Agent from such Lender.
Notwithstanding the foregoing, no payments of principal, interest, fees or other
amounts delivered to the Agent for the account of any Defaulting Lender shall be
delivered by the Agent to such Defaulting Lender. Instead, such payments shall,
for so long as such Defaulting Lender shall be a Defaulting Lender, be held by
the Agent, and the Agent is hereby authorized and directed by all parties hereto
to hold such funds in escrow and apply such funds as follows: (i) First, if
applicable to any payments due from such Defaulting Lender to the Agent or the
LC Issuer, and (ii) Second, to Credit Extensions required to be made by such
Defaulting Lender on any Borrowing Date to the extent such Defaulting Lender
fails to make such Credit Extensions. Notwithstanding the foregoing, upon the
termination of all Commitments and the payment and performance of all of the
Obligations (other than those owing to a Defaulting Lender), any funds then held
in escrow by the Agent pursuant to the preceding sentence shall be distributed
to each Defaulting Lender, pro rata in proportion to amounts that would be due
to each Defaulting Lender but for the fact that it is a Defaulting Lender. The
Agent is hereby authorized to charge the account of the Borrower maintained with
Bank One for each payment of principal, interest, Reimbursement Obligations and
fees as it becomes due hereunder. Each reference to the Agent in this Section
2.13 shall also be deemed to refer, and shall apply equally, to the LC Issuer,
in the case of payments required to be made by the Borrower to the LC Issuer
pursuant to Section 2.20.6, and the Swing Line Lender, in the case of payments
required to be made by the Borrower to the Swing Line Lender pursuant to Section
2.5.4.
2.14. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
(c) the original stated amount of each Facility LC and the amount of LC
Obligations outstanding at any time, and (d) the amount of any sum received by
the Agent hereunder from the Borrower and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(iv) Any Lender may request that its Revolving Loans be evidenced by a
promissory note or, in the case of the Swing Line Lender, promissory notes
representing its Revolving Loans and Swing Line Loans, respectively,
substantially in the form of Exhibit E, with appropriate changes for notes
evidencing Swing Line Loans (each a "Note"). In such event, the Borrower shall
prepare, execute and deliver to such Lender such Note or Notes payable to the
order of such Lender. Thereafter, the Loans evidenced by each such Note and
interest thereon shall at all times (including after any assignment pursuant to
Section 12.3) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section 12.3, except to the
extent that any such Lender or assignee subsequently returns any such note for
cancellation and requests that such Loans once again be evidenced as described
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in paragraphs (i) and (ii) above.
2.15. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall
constitute prima facie evidence of the action requested by Borrower.
2.16. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. Interest
accrued on each Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest, facility fees and LC Fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Advance is made but not for the day of any payment on the amount
paid if payment is received prior to noon (local time) at the place of payment.
If any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.17. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.18. LENDING INSTALLATIONS. Each Lender may book its Loans and its
participation in any LC Obligations and Swing Line Loans and the LC Issuer may
book the Facility LCs at any Lending Installation selected by such Lender or the
LC Issuer, as the case may be, and may change its Lending Installation from time
to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans, Facility LCs, participations in LC Obligations and
any Notes issued hereunder shall be deemed held by each Lender or the LC Issuer,
as the case may be, for the benefit of any such Lending Installation. Each
Lender and the LC Issuer may, by written notice to the Agent and the Borrower in
accordance with Article XIII, designate replacement or additional Lending
Installations through which Loans will be made by it or Facility LCs will be
issued by it and for whose account Loan payments or payments with respect to
Facility LCs are to be made.
2.19. NON-RECEIPT OF FUNDS BY THE AGENT. Unless a Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the
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case of a Lender, the proceeds of a Loan or (ii) in the case of a Borrower,
a payment of principal, interest or fees to the Agent for the account
of the Lenders, that it does not intend to make such payment, the Agent may
assume that such payment has been made. The Agent may, but shall not be
obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or a Borrower, as the
case may be, has not in fact made such payment to the Agent, the recipient of
such payment shall, on demand by the Agent, repay to the Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to (x)
in the case of payment by a Lender, the Federal Funds Effective Rate for such
day for the first three days and, thereafter, the interest rate applicable to
the relevant Loan or (y) in the case of payment by a Borrower, the interest rate
applicable to the relevant Loan.
2.20. FACILITY LCS.
2.20.1. ISSUANCE. The LC Issuer hereby agrees, on the terms
and conditions set forth in this Agreement, to issue standby letters of
credit (each, a "Facility LC") and to renew, extend, increase, decrease
or otherwise modify each Facility LC ("Modify," and each such action a
"Modification"), from time to time from and including the date of this
Agreement and prior to the Facility Termination Date upon the request
of the Borrower; provided that immediately after each such Facility LC
is issued or Modified, (i) the aggregate amount of the outstanding LC
Obligations shall not exceed $10,000,000 and (ii) the Aggregate
Outstanding Credit Exposure shall not exceed the lesser of the
Aggregate Commitments and the Borrowing Base. No Facility LC shall have
an expiry date later than the earlier of (x) the fifth Business Day
prior to the Facility Termination Date and (y) one year after its
issuance.
2.20.2. PARTICIPATIONS. Upon the issuance or Modification by
the LC Issuer of a Facility LC in accordance with this Section 2.20,
the LC Issuer shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably sold to each Lender,
and each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the LC
Issuer, a participation in such Facility LC (and each Modification
thereof) and the related LC Obligations in proportion to its Pro Rata
Share.
2.20.3. NOTICE. Subject to Section 2.20.1, the Borrower shall
give the LC Issuer notice prior to noon (Detroit time) at least five
Business Days prior to the proposed date of issuance or Modification of
each Facility LC, specifying the beneficiary, the proposed date of
issuance (or Modification) and the expiry date of such Facility LC, and
describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such
notice, the LC Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Lender, of the contents thereof and of the
amount of such Lender's participation in such proposed Facility LC. The
issuance or Modification by the LC Issuer of any Facility LC shall, in
addition to the conditions precedent set forth in Article IV (the
satisfaction of which the LC Issuer shall have no duty to ascertain),
be subject to the conditions precedent that such Facility LC shall be
satisfactory to the LC Issuer and that the Borrower shall have executed
and delivered such application agreement and/or such other instruments
and agreements relating to such Facility LC as the LC Issuer shall have
reasonably requested (each, a "Facility LC Application"). In the event
of any conflict between the terms of this Agreement and the terms of
any Facility LC Application, the terms of this Agreement shall control.
2.20.4. LC FEES. The Borrower shall pay to the Agent, for the
account of the Lenders ratably in accordance with their respective Pro
Rata Shares, with respect to each Facility LC, a
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letter of credit fee at a per annum rate equal to the Applicable Margin
for Eurodollar Loans in effect from time to time on the face amount of
such Facility LC, such fee to be payable in arrears on each Payment
Date (each such fee described in this sentence an "LC Fee"). The
Borrower shall also pay to the LC Issuer for its own account (x) at the
time of issuance of each Facility LC, a fronting fee in an amount to be
agreed upon between the LC Issuer and the Borrower, and (y) documentary
and processing charges in connection with the issuance or Modification
of and draws under Facility LCs in accordance with the LC Issuer's
standard schedule for such charges as in effect from time to time.
2.20.5. ADMINISTRATION; REIMBURSEMENT BY LENDERS. Upon receipt
from the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the LC Issuer shall notify the Agent and the Agent
shall promptly notify the Borrower and each other Lender as to the
amount to be paid by the LC Issuer as a result of such demand and the
proposed payment date (the "LC Payment Date"). The responsibility of
the LC Issuer to the Borrower and each Lender shall be only to
determine that the documents (including each demand for payment)
delivered under each Facility LC in connection with such presentment
shall be in conformity in all material respects with such Facility LC.
The LC Issuer shall endeavor to exercise the same care in the issuance
and administration of the Facility LCs as it does with respect to
letters of credit in which no participations are granted, it being
understood that in the absence of any gross negligence or willful
misconduct by the LC Issuer, each Lender shall be unconditionally and
irrevocably liable without regard to the occurrence of any Default or
any condition precedent whatsoever, to reimburse the LC Issuer on
demand for (i) such Lender's Pro Rata Share of the amount of each
payment made by the LC Issuer under each Facility LC to the extent such
amount is not reimbursed by the Borrower pursuant to Section 2.20.6
below, plus (ii) interest on the foregoing amount to be reimbursed by
such Lender, for each day from the date of the LC Issuer's demand for
such reimbursement (or, if such demand is made after 11:00 a.m.
(Detroit time) on such date, from the next succeeding Business Day) to
the date on which such Lender pays the amount to be reimbursed by it,
at a rate of interest per annum equal to the Federal Funds Effective
Rate for the first three days and, thereafter, at a rate of interest
equal to the rate applicable to Floating Rate Advances.
2.20.6. REIMBURSEMENT BY BORROWER. The Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on
or before the applicable LC Payment Date for any amounts to be paid by
the LC Issuer upon any drawing under any Facility LC, without
presentment, demand, protest or other formalities of any kind; provided
that neither the Borrower nor any Lender shall hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered
by the Borrower or such Lender to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC
issued by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC Issuer
and remaining unpaid by the Borrower shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to (x) the
rate applicable to Floating Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the sum of 2%
plus the rate applicable to Floating Rate Advances for such day if such
day falls after such LC Payment Date. The LC Issuer will pay to each
Lender ratably in accordance with its Pro Rata Share all amounts
received by it from the Borrower for application in payment, in whole
or in part, of the Reimbursement Obligation in respect of any Facility
LC issued by the LC Issuer, but only to the extent such Lender has made
payment to the LC Issuer in respect of such Facility LC pursuant to
Section 2.20.5. Subject to the terms and
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conditions of this Agreement (including without limitation the
submission of a Borrowing Notice in compliance with Section 2.8 and the
satisfaction of the applicable conditions precedent set forth in
Article IV), the Borrower may request an Advance hereunder for the
purpose of satisfying any Reimbursement Obligation.
2.20.7. OBLIGATIONS ABSOLUTE. The Borrower's obligations under
this Section 2.20 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Borrower may have or have had against the LC
Issuer, any Lender or any beneficiary of a Facility LC. The Borrower
further agrees with the LC Issuer and the Lenders that the LC Issuer
and the Lenders shall not be responsible for, and the Borrower's
Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the Borrower, any of its
Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred
or any claims or defenses whatsoever of the Borrower or of any of its
Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Facility
LC. The Borrower agrees that any action taken or omitted by the LC
Issuer or any Lender under or in connection with each Facility LC and
the related drafts and documents, if done without gross negligence or
willful misconduct, shall be binding upon the Borrower and shall not
put the LC Issuer or any Lender under any liability to the Borrower.
Nothing in this Section 2.20.7 is intended to limit the right of the
Borrower to make a claim against the LC Issuer for damages as
contemplated by the proviso to the first sentence of Section 2.20.6.
2.20.8. ACTIONS OF LC ISSUER. The LC Issuer shall be entitled
to rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.20, the LC Issuer
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the
Required Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon the Lenders and any future
holders of a participation in any Facility LC.
2.20.9. INDEMNIFICATION. The Borrower hereby agrees to
indemnify and hold harmless each Lender, the LC Issuer and the Agent,
and their respective directors, officers, agents and employees from and
against any and all claims and damages, losses, liabilities, costs or
expenses which such Lender, the LC Issuer or the Agent may incur (or
which may be claimed against such Lender, the LC Issuer or the Agent by
any Person whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason
of or in
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connection with (i) the failure of any other Lender to fulfill or
comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights the Borrower may have against
any defaulting Lender) or (ii) by reason of or on account of the LC
Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require
that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that the Borrower
shall not be required to indemnify any Lender, the LC Issuer or the
Agent for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (x) the willful
misconduct or gross negligence of the LC Issuer in determining whether
a request presented under any Facility LC complied with the terms of
such Facility LC or (y) the LC Issuer's failure to pay under any
Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of such Facility LC. Nothing in
this Section 2.20.9 is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
2.20.10. LENDERS' INDEMNIFICATION. Each Lender shall, ratably
in accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from
such indemnitees' gross negligence or willful misconduct or the LC
Issuer's failure to pay under any Facility LC after the presentation to
it of a request strictly complying with the terms and conditions of the
Facility LC) that such indemnitees may suffer or incur in connection
with this Section 2.20 or any action taken or omitted by such
indemnitees hereunder.
2.20.11. FACILITY LC COLLATERAL ACCOUNT. The Borrower agrees
that it will, upon the request of the Agent or the Required Lenders and
until the final expiration date of any Facility LC and thereafter as
long as any amount is due and owing to the LC Issuer or the Lenders in
respect of any Facility LC, maintain a special collateral account
pursuant to arrangements satisfactory to the Agent (the "Facility LC
Collateral Account") at the Agent's office at the address specified
pursuant to Article XIII, in the name of such Borrower but under the
sole dominion and control of the Agent, for the benefit of the Lenders
and in which such Borrower shall have no interest other than as set
forth in Section 8.1. After a Default, the Borrower hereby agrees to,
automatically and without further action by the Borrower, pledge,
assign and grant to the Agent, on behalf of and for the ratable benefit
of the Lenders and the LC Issuer, a security interest in all of the
Borrower's right, title and interest in and to all funds which may from
time to time be on deposit in the Facility LC Collateral Account to
secure the prompt and complete payment and performance of the
Obligations. The Agent will invest any funds on deposit from time to
time in the Facility LC Collateral Account in certificates of deposit
of Bank One having a maturity not exceeding 30 days. Nothing in this
Section 2.20.11 shall either obligate the Agent to require the Borrower
to deposit any funds in the Facility LC Collateral Account until after
a Default or limit the right of the Agent to release any funds held in
the Facility LC Collateral Account in each case other than as required
by Section 8.1.
2.20.12. RIGHTS AS A LENDER. In its capacity as a Lender, the
LC Issuer shall have the same rights and obligations as any other
Lender.
2.21. EXTENSION OF FACILITY TERMINATION DATE. The Borrower may request
a one-year extension of the Facility Termination Date by submitting a request
for an extension to the Agent (an "Extension
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Request") no more than 90 and no less than 30 days prior to the fourth
anniversary of the closing of this Agreement. Promptly upon receipt of an
Extension Request, the Agent shall notify each Lender thereof and shall request
each Lender to approve the Extension Request. Each Lender approving the
Extension Request shall deliver its written consent no later than 15 days prior
to such fourth anniversary of the closing of this Agreement. If the consent of
each of the Lenders is received by the Agent, the Facility Termination Date
shall be extended by one year and the Agent shall promptly notify the Borrower
and each Lender of the new Facility Termination Date.
2.22. REPLACEMENT OF LENDER. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that no Default or
Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such replacement, (i)
another bank or other entity which is reasonably satisfactory to the Borrower
and the Agent shall agree, as of such date, to purchase for cash the Advances
and other Obligations due to the Affected Lender pursuant to an assignment
substantially in the form of Exhibit C and to become a Lender for all purposes
under this Agreement and to assume all obligations of the Affected Lender to be
terminated as of such date and to comply with the requirements of Section 12.3
applicable to assignments, and (ii) the Borrower shall pay to such Affected
Lender in same day funds on the day of such replacement (A) all interest, fees
and other amounts then accrued but unpaid to such Affected Lender by the
Borrower hereunder to and including the date of termination, including without
limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5,
and (B) an amount, if any, equal to the payment which would have been due to
such Lender on the day of such replacement under Section 3.4 had the Loans of
such Affected Lender been prepaid on such date rather than sold to the
replacement Lender.
2.23. JUDGMENT CURRENCY. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from a Borrower hereunder in the
currency expressed to be payable herein (the "specified currency") into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the specified
currency with such other currency at the Agent's main Detroit office on the
Business Day preceding that on which final, non-appealable judgment is given.
The obligations of the Borrowers in respect of any sum due to any Lender or the
Agent hereunder shall, notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that on the Business Day
following receipt by such Lender or the Agent (as the case may be) of any sum
adjudged to be so due in such other currency such Lender or the Agent (as the
case may be) may in accordance with normal, reasonable banking procedures
purchase the specified currency with such other currency. If the amount of the
specified currency so purchased is less than the sum originally due to such
Lender or the Agent, as the case may be, in the specified currency, each
Borrower agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Agent, as the case may be, against such loss, and if the amount of
the specified currency so purchased exceeds (a) the sum originally due to any
Lender or the Agent, as the case may be, in the specified currency and (b) any
amounts shared with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Lender under Section 12.2, such Lender or the
Agent, as the case may be, agrees to remit such excess to the Borrower.
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ARTICLE III
YIELD PROTECTION; TAXES
-----------------------
3.1. YIELD PROTECTION. (a) If, on or after the date of this Agreement,
the adoption of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any change in the interpretation or administration thereof by any
governmental or quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender or applicable Lending Installation or the LC Issuer with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) subjects any Lender or any applicable Lending Installation or
the LC Issuer to any Taxes, or changes the basis of taxation
of payments (other than with respect to Excluded Taxes) to any
Lender or the LC Issuer in respect of its Eurodollar Loans,
Facility LCs or participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation or the LC Issuer (other than
reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its
Eurodollar Loans, or of issuing or participating in Facility
LCs, or reduces any amount receivable by any Lender or any
applicable Lending Installation or the LC Issuer in connection
with its Eurodollar Loans, Facility LCs or participations
therein, or requires any Lender or any applicable Lending
Installation or LC Issuer to make any payment calculated by
reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest or LC Fees received by
it, by an amount deemed material by such Lender or the LC
Issuer as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Swing Line Loans or Commitment or of
issuing or participating in Facility LCs or to reduce the return received by
such Lender or applicable Lending Installation or the LC Issuer, as the case may
be, in connection with such Eurodollar Loans, Commitment or Facility LCs or
participations therein, then, within 30 days of demand by such Lender or the LC
Issuer, as the case may be, the Borrower shall pay such Lender or the LC Issuer,
as the case may be, such additional amount or amounts as will compensate such
Lender or the LC Issuer, as the case may be, for such increased cost or
reduction in amount received.
(b) NON-U.S. RESERVE COSTS OR FEES WITH RESPECT TO CREDIT EXTENSIONS TO
NON-U.S. BORROWERS. If any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive of any jurisdiction outside of the
United States of America or any subdivision thereof (whether or not having the
force of law), imposes or deems applicable any reserve requirement against or
fee with respect to assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation, or the LC
Issuer, and the result of the foregoing is to increase the cost to such Lender
or applicable Lending Installation or the LC Issuer, of making or maintaining
its Eurodollar
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Loans to or of issuing or participating in Facility LCs upon the request of, or
of making or maintaining its Commitment to, any Borrower that is not
incorporated under the laws of the United States of America or a state thereof
(each a "Non-U.S. Borrower") or to reduce the return received by such Lender or
applicable Lending Installation or the LC Issuer in connection with such
Eurodollar Loans to or Facility LCs applied for by, or Commitment to any
Non-U.S. Borrower then, within 30 days of demand by such Lender, or the LC
Issuer, as the case may be, such Non-U.S. Borrower shall pay such Lender or the
LC Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender for such increased cost or reduction in amount received,
provided that such Non-U.S. Borrower shall not be required to compensate any
Lender for such non-U.S. reserve costs or fees to the extent that an amount
equal to such reserve costs or fees is received by such Lender as a result of
the calculation of the interest rate applicable to Eurodollar Advances pursuant
to clause (i)(b) of the definition of "Eurodollar Rate."
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender or the LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender, or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer or any corporation controlling such Lender or LC Issuer is increased as a
result of a Change, then, within 30 days of demand by such Lender or the LC
Issuer, the Borrower shall pay such Lender or the LC Issuer the amount necessary
to compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or the LC Issuer determines is attributable
to this Agreement, its Outstanding Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs or Swing Line Loans, as the case
may be, hereunder (after taking into account such Lender's or the LC Issuer's
policies as to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or the LC Issuer or any
Lending Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period or
of a Swing Line Loan occurs on a date which is not the scheduled due date
thereof, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance or Swing Line Loan is not made on the date specified by a
Borrower for any reason other than default by the Lenders, the relevant Borrower
will indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain such Eurodollar Advance or Swing
Line Loan.
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3.5. TAXES. (i) All payments by any Borrower to or for the account of
any Lender, the LC Issuer or the Agent hereunder or under any Note or Facility
LC Application shall be made free and clear of and without deduction for any and
all Taxes. If any Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender, the LC Issuer or the
Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) such Borrower shall make such deductions, (c)
such Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) such Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In addition, such Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or Facility LC Application or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note or Facility LC Application
("Other Taxes").
(iii) Each Borrower hereby agrees to indemnify the Agent, the LC Issuer
and each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, the LC Issuer or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Agent, the LC Issuer or such Lender makes demand therefor pursuant
to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not more than ten Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in
either case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, and (ii) deliver to each of the Borrower and the Agent a United States
Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is
entitled to an exemption from United States backup withholding tax. Each
Non-U.S. Lender further undertakes to deliver to each of the Borrower and the
Agent (x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Agent. All forms or amendments described in the
preceding sentence shall certify that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes, unless 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 such Lender from duly completing and
delivering any such form or amendment with respect to it and such Lender advises
the Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to
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a reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent and the Borrower fully for all amounts paid, directly or indirectly,
by the Agent as tax, withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on amounts payable to
the Agent under this subsection, together with all costs and expenses related
thereto (including attorneys fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent). The obligations of the Lenders
under this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1. INITIAL CREDIT EXTENSION. The Lenders shall not be required to
make the initial Credit Extension hereunder unless the Borrower has furnished to
the Agent with sufficient copies for the Lenders:
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(i) Copies of the articles or certificate of incorporation of the
Borrower, together with all amendments, and a certificate of
good standing, each certified by the appropriate governmental
officer in its jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of
the Borrower, of its by-laws and of its Board of Directors'
resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which the
Borrower is a party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by
name and title and bear the signatures of the Authorized
Officers and any other officers of the Borrower authorized to
sign the Loan Documents to which the Borrower is a party, upon
which certificate the Agent and the Lenders shall be entitled
to rely until informed of any change in writing by the
Borrower.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Credit Extension Date no
Default or Unmatured Default has occurred and is continuing.
(v) A written opinion of the Borrower's counsel, addressed to the
Lenders in substantially the form of Exhibit A.
(vi) Any Notes requested by a Lender pursuant to Section 2.14
payable to the order of each such requesting Lender.
(vii) Written money transfer instructions, in substantially the form
of Exhibit D, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(viii) If the initial Credit Extension will be the issuance of a
Facility LC, a properly completed Facility LC Application.
(ix) The Borrower shall have delivered accurate and complete copies
of the Agreement for Inventory Purchases, the Convertible
Debenture and the Senior Unsecured Notes and agreements and
instruments executed in connection therewith, including any
amendments thereto, together with a certificate of the
Borrower with respect to such matters relating to those
agreements as required by the Agent.
(x) The 364-Day Credit Agreement shall close simultaneously with
this Agreement.
(xi) Payment in full and termination of the National City Credit
Agreement simultaneously with such initial Credit Extension.
(xii) Such other documents as the Agent or its counsel may have
reasonably requested.
4.2. EACH CREDIT EXTENSION. The Lenders shall not (except as otherwise
set forth in Section 2.5.4. with respect to Revolving Loans for the purpose of
repaying Swing Line Loans) be required to make any Credit Extension unless on
the applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
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(ii) The representations and warranties contained in Article V are
true and correct as of such Credit Extension Date except to
the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct on
and as of such earlier date.
(iii) If such Credit Extension is to a Foreign Subsidiary Borrower,
all requirements to adding such Foreign Subsidiary Borrower to
this Agreement specified in Section 8.2 shall have been
satisfied.
(iv) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Agent and its counsel.
Each Borrowing Notice or Swing Line Borrowing Notice, as the case may
be, with respect to each such Credit Extension shall constitute a representation
and warranty by the Borrower that the conditions contained in Sections 4.2(i)
and (ii) have been satisfied. The Agent may require a duly completed compliance
certificate in substantially the form of Exhibit B as a condition to making an
Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lenders that:
5.1. EXISTENCE AND STANDING. Each of the Borrower and its Subsidiaries
is a corporation, partnership (in the case of Subsidiaries only), limited
liability company or similar entity duly and properly incorporated or organized,
as the case may be, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted and
where the failure to have such authority would not have a Material Adverse
Effect.
5.2. AUTHORIZATION AND VALIDITY. Each Borrower has the power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by each Borrower of the Loan Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized by proper
corporate (to the extent such concept applies to such entity) proceedings, and
the Loan Documents to which each Borrower is a party constitute legal, valid and
binding obligations of such Borrower enforceable against such Borrower in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by equitable principles (regardless of whether enforcement
is sought in equity or at law).
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by any Borrower of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Borrower or any of its
Subsidiaries or (ii) such Borrower's or any Subsidiary's articles or certificate
of incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, or operating or other
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management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or other material agreement to which such Borrower or any
of its Subsidiaries is a party or is subject, or by which it, or its Property,
is bound, or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of
such Borrower or a Subsidiary pursuant to the terms of any such indenture,
instrument or other material agreement. No order, consent, adjudication,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any
governmental or public body or authority, or any subdivision thereof, which has
not been obtained by the Borrower or any of its Subsidiaries, is required to be
obtained by the Borrower or any of its Subsidiaries in connection with the
execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by the Borrowers of the Obligations or
the legality, validity, binding effect or enforceability of any of the Loan
Documents.
5.4. FINANCIAL STATEMENTS. The March 31, 2000 consolidated financial
statements of the Borrower and its Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Borrower and
its Subsidiaries at such date and the consolidated results of their operations
for the period then ended.
5.5. MATERIAL ADVERSE CHANGE. Since March 31, 2000 there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
5.6. TAXES. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles.
The United States income tax returns of the Borrower and its Subsidiaries have
been audited by the Internal Revenue Service through the fiscal year ended March
31, 1997. No tax liens have been filed and no claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on the books of
the Borrower and its Subsidiaries in respect of any taxes or other governmental
charges are adequate.
5.7. LITIGATION AND CONTINGENT OBLIGATIONS. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8. SUBSIDIARIES. Schedule 1 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective Capital Stock owned by the Borrower or other Subsidiaries. All of the
issued and outstanding shares of Capital Stock of such Subsidiaries have been
(to the extent such concepts are relevant with respect to such ownership
interests) duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $5,000,000. Neither the Borrower nor any other
member of the Controlled Group has incurred,
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or is reasonably expected to incur, any withdrawal liability to Multiemployer
Plans in excess of $5,000,000 in the aggregate. Each Plan complies in all
material respects with all applicable requirements of law and regulations, no
Reportable Event has occurred with respect to any Plan, neither the Borrower nor
any other member of the Controlled Group has withdrawn from any Plan or
initiated steps to do so, and no steps have been taken to reorganize or
terminate any Plan.
5.10. ACCURACY OF INFORMATION. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
5.11. REGULATIONS T, U AND X. Margin Stock constitutes less than 25% of
the value of those assets of the Borrower and its Subsidiaries which are subject
to any limitation on sale, pledge, or other restriction hereunder.
5.12. MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness in an outstanding
amount equal to or exceeding $5,000,000 in the aggregate.
5.13. COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a Material Adverse Effect.
5.14. OWNERSHIP OF PROPERTIES. Except as set forth on Schedule 2, on
the date of this Agreement, the Borrower and its Subsidiaries will have good
title, free of all Liens other than those permitted by Section 6.14, to all of
the Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Agent as owned by the Borrower and its
Subsidiaries.
5.15. PLAN ASSETS; PROHIBITED TRANSACTIONS. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Sec.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. ENVIRONMENTAL MATTERS. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a
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release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
5.17. INVESTMENT COMPANY ACT. Neither the Borrower nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in
generally accepted accounting principles and required or
approved by the Borrower's independent certified public
accountants) audit report certified by independent certified
public accountants acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a
consolidated and consolidating basis (provided that
consolidating statements may be internally prepared and do not
need to be certified by such accountants and shall not be
required to be delivered until 100 days after the close of
each fiscal year) for itself and its Subsidiaries, including
balance sheets as of the end of such period, related profit
and loss and reconciliation of surplus statements, and a
statement of cash flows, accompanied by any management letter
prepared by said accountants.
(ii) Within 45 days (or 60 days in the case of consolidating
statements) after the close of the first three quarterly
periods of each of its fiscal years, for itself and its
Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such period and consolidated
and consolidating profit and loss and reconciliation of
surplus statements and a statement of cash flows for the
period from the beginning of such fiscal year to the end of
such quarter, all certified by its chief financial officer.
(iii) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit B signed by its chief financial officer
showing the calculations necessary to determine compliance
with this Agreement and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
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(iv) Within 30 Business Days after the end of each month, a
Borrowing Base Certificate prepared as of the close of
business on the last day of each month and such supporting
schedules requested by the Agent, certified as true and
correct by the chief financial officer of the Borrower.
(v) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer
Plan, certified as correct by an actuary enrolled under ERISA.
(vi) As soon as possible and in any event within 15 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief
financial officer of the Borrower, describing said Reportable
Event and the action which the Borrower proposes to take with
respect thereto.
(vii) As soon as possible and in any event within 15 days after
receipt by the Borrower, a copy of (a) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment,
and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries, which,
in either case, could reasonably be expected to have a
Material Adverse Effect.
(viii) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports and
proxy statements so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission.
(x) Such other information (including non-financial information)
as the Agent or any Lender may from time to time reasonably
request.
6.2. USE OF PROCEEDS. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Credit Extensions for general corporate purposes.
The Borrower will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Advances to purchase or carry any Margin Stock.
6.3. NOTICE OF DEFAULT. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
6.4. CONDUCT OF BUSINESS. Other than as permitted under Section 6.11,
the Borrower will, and will cause each Subsidiary to, carry on and conduct its
business in substantially the same manner and in substantially the same or
similar or related fields of enterprise as it is presently conducted and do all
things necessary to remain duly incorporated or organized, validly existing and
(to the extent such concept applies to such entity) in good standing as a
domestic corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case may be, and maintain
all
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requisite authority to conduct its business in each jurisdiction in which its
business is conducted and where the failure to maintain such authority does not
have a Material Adverse Effect.
6.5. TAXES. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.
6.6. INSURANCE. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
reasonable request full information as to the insurance carried.
6.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, the non-compliance with which would
have a Material Adverse Effect .
6.8. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, ordinary wear and tear
excepted and excluding assets which are obsolete or otherwise no longer useful
in the business of the Borrower or any of its Subsidiaries, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
6.9. INSPECTION. Upon reasonable notice from the Agent and the Lenders,
the Borrower will, and will cause each Subsidiary to, permit the Agent and the
Lenders, by their respective representatives and agents, to inspect any of the
Property, books and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other financial records of
the Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised as to the
same by, their respective officers at such reasonable times and intervals as the
Agent or any Lender may designate.
6.10. INDEBTEDNESS. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Obligations.
(ii) Indebtedness existing on the date hereof and described in
Schedule 2, but no increase in the principal amount thereof,
as such amount is reduced from time to time.
(iii) Indebtedness arising in connection with transactions permitted
by Section 6.12(v), but no increase in the principal amount
thereof.
(iv) Other Indebtedness in aggregate outstanding amount not to
exceed 10% of Consolidated Tangible Net Worth, provided that
the aggregate amount of such other Indebtedness of any
Subsidiaries of the Borrower shall not exceed 3% of
Consolidated Tangible Net Worth.
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6.11. MERGER. The Borrower will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except that a Subsidiary
may merge into the Borrower (provided the Borrower is the surviving corporation)
or a Wholly-Owned Subsidiary. The Borrower will merge certain of its Domestic
Subsidiaries (with the Borrower being the surviving corporation) or take such
other action such that, as of (i) the date sixty days after the date hereof,
(ii) each one year anniversary of the date hereof and (iii) each date a
Significant Subsidiary or any one or more Subsidiaries which, if considered in
the aggregate as a single Subsidiary, would be a Significant Subsidiary of the
Borrower that is not a Guarantor is created, acquired or otherwise comes into
existence, the Borrower and all Foreign Subsidiary Borrowers which have 65% of
their Capital Stock pledged pursuant to a Pledge Agreement shall directly own at
least 75% of the total consolidated assets (other than accounts or notes
receivable transferred in accordance with Section 6.12(v) to a Securitization
Entity in connection with a Permitted Securitization Transaction) of the
Borrower and its Subsidiaries and shall account for at least 75% of the
consolidated net revenues of the Borrower and its Subsidiaries as of the end of
the most recently ended four consecutive fiscal quarters of the Borrower on a
pro forma basis acceptable to the Agent. In connection with any such Pledge
Agreement, the Borrower will deliver or cause to be delivered such stock
certificates, legal opinions and other documents reasonably required by the
Agent.
6.12. SALE OF ASSETS. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
(i) Sales of inventory in the ordinary course of business and the
sale of assets not material in amount in the aggregate and
which are obsolete and no longer useful in the business of the
Borrower or any of its Subsidiaries.
(ii) Sales or other dispositions in the ordinary course of business
of fixed assets for the purpose of replacing such fixed
assets, provided that any such fixed asset is replaced within
180 days of such sale or other disposition with other fixed
assets which have a fair market value not materially less than
the fixed assets sold or otherwise disposed of and provided
that the aggregate amount sold or otherwise disposed under
this Section 6.12(ii) does not exceed a Substantial Portion.
(iii) The transfer of any assets from a Subsidiary to the Borrower
or a Guarantor.
(iv) Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other
than inventory in the ordinary course of business) as
permitted by this Section 6.12(iv) during the twelve-month
period ending with the month in which any such lease, sale or
other disposition occurs, do not constitute a Substantial
Portion of the Property of the Borrower and its Subsidiaries.
(v) Any sale or other transfer of an interest in accounts or notes
receivable on a limited recourse basis, acceptable to the
Agent, provided that (a) such transfer qualifies as a sale
under Agreement Accounting Principles, (b) the aggregate
amount of such financing does not exceed $150,000,000 at any
one time outstanding and (c) the Aggregate Commitment
hereunder and under the 364-Day Credit Agreement is reduced,
on a pro rata basis between the Aggregate Commitment hereunder
and under the 364-Day Credit Agreement, by an amount equal to
100% of the aggregate amount of such financing in
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excess of $50,000,000 (any such sale or other transfer, a
"Permitted Securitization Transaction").
6.13. INVESTMENTS AND ACQUISITIONS. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any Person, except:
(i) Cash Equivalent Investments.
(ii) (a) Existing Investments in Subsidiaries and other Investments
in existence on the date hereof and described in Schedule 1,
(b) Investments in a Securitization Entity in connection with
Permitted Securitization Transactions and in an aggregate
outstanding amount not to exceed 20% of the aggregate amount
of all Permitted Securitization Transactions and (c)
additional Investments in Subsidiaries not to exceed
$5,000,000 in the aggregate.
(iii) Other Investments and Acquisitions of the Borrower and its
Subsidiaries, provided that (a) immediately before and after
giving effect to such Investment or Acquisition, no Default or
Unmatured Default shall exist or shall have occurred and be
continuing and the representations and warranties contained in
Article V and in the other Loan Documents shall be true and
correct on and as of the date thereof (both before and after
such Investment or Acquisition is consummated) as if made on
the date such Investment or Acquisition is consummated, (b)
the target of such Investment or Acquisition is in
substantially the same line of business or a similar or
related line of business as the Borrower, (c) the Board of
Directors and the management of the target of such Investment
or Acquisition has approved such Investment or Acquisition,
and (d) the consideration paid or payable or otherwise
advanced in connection with all Investments and Acquisitions
permitted by this Section 6.13(iii), including without
limitation any Indebtedness assumed in connection therewith or
Contingent Liabilities incurred in connection therewith, shall
not exceed $10,000,000 in the aggregate since the date of this
Agreement.
(iv) Other Investments and Acquisitions of the Borrower and its
Subsidiaries, provided that (a) immediately before and after
giving effect to such Investment or Acquisition, no Default or
Unmatured Default shall exist or shall have occurred and be
continuing and the representations and warranties contained in
Article V and in the other Loan Documents shall be true and
correct on and as of the date thereof (both before and after
such Investment or Acquisition is consummated) as if made on
the date such Investment or Acquisition is consummated, (b) at
least 5 Business Days' prior to the consummation of such
Investment or Acquisition, the Borrower shall have provided to
the Agent an opinion of counsel and a certificate of an
Authorized Officer each stating that such Investment or
Acquisition complies with this Section 6.13(iv), all laws and
regulations and any other conditions under this Agreement
relating to such transaction have been satisfied, and such
certificate shall contain such other information and
certifications as requested by the Agent and be in form and
substance satisfactory to the Agent, (c) at least 5 Business
Days' prior to the consummation of such Investment or
Acquisition, the Borrower shall have delivered all agreements
and documents relating to such Investment or Acquisition, and
the Agent shall have completed a satisfactory review thereof
and completed such other due diligence satisfactory to the
Agent, (d) at least 5 Business
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Days prior to the consummation of such Investment or
Acquisition, Borrower shall have provided to the Agent a
certificate of an Authorized Officer attaching pro forma
computations acceptable to the Agent to demonstrate pro forma
compliance with the financial covenants for the twelve month
period ending on the last day of the Borrower's most recently
completed fiscal quarter as if such Acquisition had occurred
on the first day of such twelve month period, (e) the target
of such Investment or Acquisition is in substantially the same
line of business or a similar or related line of business as
the Borrower, (f) the Board of Directors and the management of
the target of such Investment or Acquisition have approved
such Investment or Acquisition, (g) the consideration paid or
payable or otherwise advanced in connection with all
Investments and Acquisitions permitted by this Section
6.13(iv), including without limitation any Indebtedness
assumed in connection therewith or Contingent Liabilities
incurred in connection therewith, shall not exceed $50,000,000
in the aggregate per year or $100,000,000 in the aggregate
since the date of this Agreement and (h) after giving effect
to such Investment or Acquisition on a pro forma basis
acceptable to the Agent, the Borrower shall have unused
availability under Section 2.1 of this Agreement and Section
2.1 of the 364-Day Credit Agreement of at least $25,000,000 in
the aggregate and the Leverage Ratio shall be at least 0.15
below the level required under Section 6.17.2.
6.14. LIENS. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.
(ii) Statutory Liens imposed by law, such as bankers', carriers',
warehousemen's, mechanics' and landlords', vendor's,
materialmen's, repairmen's liens and other similar liens
arising in the ordinary course of business which secure
payment of obligations not more than 60 days past due or which
are being contested in good faith by appropriate proceedings
and for which adequate reserves shall have been set aside on
its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits or similar
legislation.
(iv) Easements, building restrictions and such other encumbrances
or charges against real property as are of a nature generally
existing with respect to properties of a similar character and
which do not in any material way affect the marketability of
the same or interfere with the use thereof in the business of
the Borrower or its Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule 2.
(vi) Liens incurred in connection with any transfer of an interest
in accounts or notes receivable which is permitted pursuant to
Section 6.12(v) and which are required to consummate such
Permitted Securitization Transaction.
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(vii) Liens arising out of deposits to secure the performance of
bids, trade contracts (other than contracts for the payment of
money), leases, licenses, franchises, statutory obligations,
surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course
of business in an aggregate amount not to exceed $5,000,000 at
any time.
(viii) Liens arising with respect to rights of lessees or sublessees
under Operating Leases in assets leased by the Borrower or any
Subsidiary under an Operating Lease.
(ix) Liens in favor of the Agent and the Lenders under any Pledge
Agreements.
(x) Any other Lien on any fixed assets of the Borrower or any of
its Subsidiaries, provided that the aggregate outstanding
amount of the Indebtedness secured by all such Liens does not
exceed $10,000,000.
(xi) Any extension, renewal or replacement (or successive
extension, renewal, or replacement) in whole or in part, of
any Lien referred to in the foregoing clauses (i) through (x)
inclusive; PROVIDED, HOWEVER, that the principal amount of
Indebtedness secured thereby shall not exceed the principal
amount of Indebtedness so secured at the time of such
extension, renewal or replacement, and that such extension,
renewal or replacement shall be limited to all or a part of
the property which secured the Lien so extended, renewed or
replaced.
6.15. AFFILIATES. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
6.16. FINANCIAL CONTRACTS. The Borrower will not, nor will it permit
any Subsidiary to, enter into or remain liable upon any Financial Contract for
purposes of financial speculation.
6.17. FINANCIAL COVENANTS.
6.17.1. FIXED CHARGE COVERAGE RATIO. The Borrower will not
permit the ratio, determined as of the end of each of its fiscal
quarters for the then most-recently ended four fiscal quarters, of (i)
Consolidated EBITDA minus Consolidated Capital Expenditures plus
Consolidated Rentals, to (ii) Consolidated Interest Expense, plus
Consolidated Rentals, plus current maturities of principal
Indebtedness, plus expense for taxes paid or accrued, plus any
dividends or other distributions on the Capital Stock of the Borrower
and all redemptions, repurchases and other acquisitions or retirements
any of Capital Stock of the Borrower, plus all interest expense related
to the Convertible Debentures, all calculated for the Borrower and its
Subsidiaries on a consolidated basis, to be less than (x) 1.25 to 1.0
as of the end of any fiscal quarter ending on or after the date hereof
and on or before March 31, 2001, or (y) 1.35 to 1.0 as of the end of
any fiscal quarter thereafter.
6.17.2. LEVERAGE RATIO. The Borrower will not permit the
ratio, determined as of the end of each of its fiscal quarters for the
then most-recently ended four fiscal quarters, of (i) Consolidated
Debt to (ii) Consolidated EBITDA for the then most-recently ended four
fiscal
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quarters to be greater than (a) 3.25 to 1.0 as of the end of any
fiscal quarter ending on or after the date hereof and on or before
December 31, 2001, (b) 3.00 to 1.0 as of the end of any fiscal quarter
ending on or after March 31, 2002 and on or before December 31, 2002
or (c) 2.75 to 1.0 as of the end of any fiscal quarter thereafter.
6.17.3. MINIMUM NET WORTH. The Borrower will at all times
maintain Consolidated Net Worth of not less than the sum of (i)
$410,000,000 plus (ii) 50% of Consolidated Net Income earned in each
fiscal year beginning with the fiscal year ending March 31, 2001
(without deduction for losses) plus (iii) 100% of the net cash proceeds
received by the Borrower from the issuance or other sale of its or its
Subsidiaries' Capital Stock.
6.18. GUARANTIES. If at any time the Domestic Subsidiaries (other than
Securitization Entities) of the Borrower are no longer prohibited from
guaranteeing the Obligations by any of the agreements of the Borrower existing
as of the date hereof and the providing of Guaranties hereunder by the Domestic
Subsidiaries (other than Securitization Entities) of the Borrower would not
require the delivery of guarantees or the granting of Liens by such Domestic
Subsidiaries under other agreements of the Borrower existing as of the date
hereof, if requested by the Agent or the Required Lenders, the Borrower will
cause such Domestic Subsidiaries (other than Securitization Entities) to
guarantee the Obligations and to execute and deliver to the Agent such
guaranties, resolutions and related corporate documents and opinions of counsel
reasonably requested by the Agent in connection therewith. The Borrower will not
permit any of its Subsidiaries to incur any Contingent Obligations with respect
to any Indebtedness of the Borrower or any other Subsidiary without providing
Guaranties of such Subsidiaries pursuant to this Agreement.
6.19. OTHER INDEBTEDNESS. (i) The Borrower will not, and will not
permit any Subsidiary to, make any amendment, supplement or modification to the
Convertible Debenture, the Senior Unsecured Notes or any agreements or
instruments executed in connection therewith or directly or indirectly
voluntarily or optionally prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire, any Indebtedness or other liabilities or
obligations outstanding thereunder.
(ii) The Borrower will not, and will not permit any
Subsidiary to, make any amendment, supplement or modification to the Agreement
for Inventory Purchases or any agreements or instruments executed in connection
therewith which is materially adverse to the Borrower or any of its Subsidiaries
or to any Lender, or directly or indirectly voluntarily or optionally prepay,
defease or in substance defease, purchase, redeem, retire or otherwise acquire,
any Indebtedness or other liabilities or obligations outstanding thereunder.
(iii) If at any time any Borrower or Guarantor shall
enter into or be a party to any instrument or agreement with respect to any
Indebtedness which in the aggregate, together with any related Indebtedness,
exceeds $5,000,000 (other than Indebtedness permitted to be secured by Liens
allowed under Section 6.14(ix)), relating to or amending any terms or conditions
applicable to any of such Indebtedness which includes covenants or defaults not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Borrower
shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent or
the Required Lenders shall request, upon notice to the Borrower, the Agent and
the Lenders shall enter into an amendment to this Agreement or an additional
agreement (as the Agent may request), providing for substantially the same
covenants and defaults as those provided for in such instrument or agreement to
the extent required and as may be selected by the Agent or the Required Lenders,
as the case may be. In addition to the foregoing, any covenants or defaults or
similar provisions (which include without limitation any provisions requiring
any mandatory prepayments or defeasance) contained the Agreement for
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Inventory Purchases, the Convertible Debenture, the Senior Unsecured Notes or
any agreements or instruments executed in connection therewith not substantially
provided for in this Agreement or more favorable to the holders of the
obligations issued in connection therewith are hereby incorporated by reference
into this Agreement to the same extent as if set forth fully herein, and no
subsequent amendment, waiver, termination or modification thereof shall affect
any such covenants or defaults as incorporated herein.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any Credit Extension, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due within one Business
Day (or five Business Days if such payment is required solely because the
Aggregate Outstanding Credit Exposure exceeds the Borrowing Base as a result of
the Agent determining that inventory or accounts receivable of a type previously
included in the Borrowing Base are no longer eligible to be so included as a
result of the Agent exercising its reasonable credit judgment as described in
the definitions of Eligible Accounts Receivable and Eligible Inventory) after
the same becomes due, nonpayment of any Reimbursement Obligation within one
Business Day after the same becomes due, or nonpayment of interest upon any Loan
or of any facility fee, LC Fee or other obligations under any of the Loan
Documents within five Business Days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18 or 6.19.
7.4. The breach by any Borrower (other than a breach which constitutes
a Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within 15 days after written
notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when
due any Indebtedness or Rate Management Obligation aggregating in excess of
$5,000,000 ("Material Indebtedness"); or the default by the Borrower or any of
its Subsidiaries in the performance (beyond the applicable grace period with
respect thereto, if any) of any term, provision or condition contained in any
agreement under which any such Material Indebtedness was created or is governed,
or any other event shall occur or condition exist, the effect of which default
or event is to cause, or to permit the holder or holders of such Material
Indebtedness to cause, such Material Indebtedness to become due prior to its
stated maturity; or any Material Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable or required to be prepaid
or repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or the Borrower or any of its Subsidiaries shall not pay, or
admit in writing its inability to pay, its debts generally as they become due.
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7.6. The Borrower or any of its Subsidiaries shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or
any Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate or partnership action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion of
the Property of the Borrower and its Subsidiaries which, when taken together
with all other Property of the Borrower and its Subsidiaries so condemned,
seized, appropriated, or taken custody or control of, during the twelve-month
period ending with the month in which any such action occurs, constitutes a
Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money in excess of $5,000,000 (or the equivalent thereof in
currencies other than Dollars) in the aggregate, or (ii) nonmonetary judgments
or orders which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, which judgment(s), in any such case, is/are
not stayed on appeal or otherwise being appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $5,000,000 or any Reportable Event shall occur in
connection with any Plan.
7.11. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $5,000,000.
7.12. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $5,000,000.
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7.13. The Borrower or any of its Subsidiaries shall (i) be the subject
of any proceeding or investigation pertaining to the release by the Borrower,
any of its Subsidiaries or any other Person of any toxic or hazardous waste or
substance into the environment, or (ii) violate any Environmental Law, which, in
the case of an event described in clause (i) or clause (ii), could reasonably be
expected to have a Material Adverse Effect.
7.14. Any Change in Control shall occur.
7.15. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.
7.16. Any Guaranty or Pledge Agreement, to the extent ever in
existence, shall fail to remain in full force or effect or any action shall be
taken to discontinue or to assert the invalidity or unenforceability of any
Guaranty or Pledge Agreement, or any Guarantor or Borrower shall fail to comply
with any of the terms or provisions of any Guaranty or Pledge Agreement to which
it is a party, or any Guarantor or Borrower shall deny that it has any further
liability under any Guaranty or Pledge Agreement to which it is a party, or
shall give notice to such effect.
7.17. The representations and warranties set forth in Section 5.15
("Plan Assets; Prohibited Transactions") shall at any time not be true and
correct.
7.18 Any termination of the Agreement for Inventory Purchases (or the
receipt by Borrower or the Agent of a notice of termination from IBM Credit
Corporation or any of its Affiliates relating to the Agreement for Inventory
Purchases that is not revoked within sixty days) or any material reduction in
the amount of the credit facility under the Agreement for Inventory Purchases,
provided, however, upon the receipt by Borrower or the Agent of a notice of
termination from IBM Credit Corporation relating to the Agreement for Inventory
Purchases, the Lenders' and LC Issuer's Commitments shall immediately terminate;
provided, further, that the occurrence of any of the foregoing will not be a
Default or terminate the Commitments if the ability of the Borrower and its
Subsidiaries to purchase or finance inventory previously purchased or financed
under the Agreement for Inventory Purchases is not materially diminished (such
as by the providing of trade credit by IBM Credit Corporation or any of its
Affiliates or other credit on terms comparable to the terms of the Agreement for
Inventory Purchases) as reasonably determined by the Agent.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. ACCELERATION; FACILITY LC COLLATERAL ACCOUNT . (i) If any Default
described in Section 7.6 or 7.7 occurs with respect to the Borrower, the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the LC Issuer or any Lender and the Borrower
will be and become thereby unconditionally obligated, without any further
notice, act or demand, to pay to the Agent an amount in immediately available
funds, which funds shall be held in the Facility LC Collateral Account, equal to
the difference of (x) the amount of LC Obligations at such time, less (y) the
amount on deposit in the Facility LC
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Collateral Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the Obligations (such
difference, the "Collateral Shortfall Amount"). If any other Default occurs, the
Agent, with the consent of or at the request of the Required Lenders (a) may
terminate or suspend the obligations of the Lenders to make Loans hereunder and
the obligation and power of the LC Issuer to issue Facility LCs, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which each Borrower hereby expressly waives, and (b)
upon notice to the Borrower and in addition to the continuing right to demand
payment of all amounts payable under this Agreement, make demand on the Borrower
to pay, and the Borrower will, forthwith upon such demand and without any
further notice or act, pay to the Agent the Collateral Shortfall Amount, which
funds shall be deposited in the Facility LC Collateral Account. Notwithstanding
any provision to the contrary, it is understood that, other than with respect to
a Default described in Section 7.6 of 7.7, (1) no Lender has the right to
individually terminate its obligations to make Loans hereunder (such right of
termination residing with the Agent as provided above), and (2) no Lender has
the right to declare its Loans due and payable prior to maturity (such right to
declare the Loans due and payable residing with the Agent as provided above).
(ii) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Agent the Collateral Shortfall Amount, which funds shall be deposited in the
Facility LC Collateral Account.
(iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.
(iv) At any time while any Default is continuing, neither the Borrower
nor any Person claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in the Facility LC Collateral Account.
After all of the Obligations have been indefeasibly paid in full and the
Aggregate Commitment has been terminated, any funds remaining in the Facility LC
Collateral Account shall be returned by the Agent to the Borrower or paid to
whomever may be legally entitled thereto at such time.
(v) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the LC Issuer to issue Facility LCs hereunder as a
result of any Default (other than any Default as described in Section 7.6 or 7.7
with respect to the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2. AMENDMENTS. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrowers may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrowers hereunder or waiving
any Default hereunder; provided, however, that no such supplemental agreement
shall, without the consent of all of the Lenders:
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(i) Extend the final maturity of any Loan, or extend the expiry
date of any Facility LC to a date after the Facility
Termination Date or forgive all or any portion of the
principal amount thereof, any accrued interest or fees or any
Reimbursement Obligation related thereto, or reduce the
Applicable Margin or the Applicable Fee Rate or extend the
time of payment of interest or fees thereon or Reimbursement
Obligations related thereto.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date, or reduce the amount or
extend the payment date for, the mandatory payments required
under Section 2.2 (including any mandatory payment required as
a result of the terms of Section 6.12(v)), or increase the
amount of the Aggregate Commitment (other than as allowed
under Section 2.6(iii)), the Commitment of any Lender (other
than as allowed under Section 2.6(iii)) hereunder or the
commitment to issue Facility LCs, or permit any Borrower to
assign its rights under this Agreement.
(iv) Amend this Section 8.2 or Section 2.6(iii).
(v) Release the Borrower as a Guarantor hereunder or, except as
permitted by the Loan Documents, release all or substantially
all of any collateral pledged under any Pledge Agreement.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, no amendment of any
provisions relating to the LC Issuer shall be effective without the written
consent of the LC Issuer and no amendment of any provision of this Agreement
relating to the Swing Line Lender or any Swing Line Loans shall be effective
without the written consent of the Swing Line Lender. The Agent may waive
payment of the fee required under Section 12.3.2 without obtaining the consent
of any other party to this Agreement. Notwithstanding anything herein to the
contrary, no Defaulting Lender shall be entitled to vote (whether to consent or
to withhold its consent) with respect to any amendment, modification,
termination or waiver and, for purposes of the determining the Required Lenders,
the Commitments and the Outstanding Credit Exposure of each Defaulting Lender
shall be disregarded and the Agent shall have the ability, but not the
obligation, to replace any Defaulting Lender with another lender or lenders.
In addition to the above, any Foreign Subsidiaries of the Borrower may be added
as Foreign Subsidiary Borrowers hereto at any time upon (A) the execution and
delivery by the Borrower, such Foreign Subsidiary Borrower and the Agent, of a
joinder agreement in form satisfactory to the Agent providing for such
Subsidiary to become a Foreign Subsidiary Borrower, (B) the execution and
delivery by the Borrower of a Guaranty with respect to such Foreign Subsidiary
Borrower, (C) the delivery to the Agent of such legal opinions, resolutions and
corporate documents as requested by the Agent, (D) the delivery such other
documents with respect thereto as the Agent shall reasonably request and (E) the
written approval of the Agent.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders, the
LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the inability of the Borrowers to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever
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shall be valid unless in writing signed by the Lenders required pursuant to
Section 8.2, and then only to the extent in such writing specifically set forth.
All remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Agent, the LC Issuer and the
Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrowers contained in this Agreement, as updated from time to time in
accordance with Section 8.2, shall survive the making of the Credit Extensions
herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to any Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
and understanding among the Borrowers, the Agent, the LC Issuer and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Agent, the LC Issuer and the Lenders relating to the subject matter thereof
other than the fee letter described in Section 10.13.
9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. EXPENSES; INDEMNIFICATION. (i) The Borrower shall reimburse the
Agent and the Arranger for any costs, internal charges and out-of-pocket
expenses (including reasonable attorneys' fees and time charges of attorneys for
the Agent, which attorneys may be employees of the Agent) paid or incurred by
the Agent or the Arranger in connection with the preparation, negotiation,
execution, delivery, syndication, distribution (including, without limitation,
via the internet), review, amendment, modification, and administration of the
Loan Documents. The Borrower also agrees to reimburse the Agent, the Arranger,
the LC Issuer and the Lenders for any costs, internal charges and out-of-pocket
expenses (including reasonable attorneys' fees and time charges of attorneys for
the Agent, the Arranger, the LC Issuer and the Lenders, which attorneys may be
employees of the Agent, the Arranger, the LC Issuer or the Lenders) paid or
incurred by the Agent, the Arranger, the LC Issuer or any Lender in connection
with the collection and enforcement of the Loan Documents. Expenses being
reimbursed by
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the Borrower under this Section include, without limitation, costs and expenses
incurred in connection with the Reports described in the following sentence. The
Borrower acknowledges that from time to time Bank One may prepare and may
distribute to the Lenders (but shall have no obligation or duty to prepare or to
distribute to the Lenders) certain audit reports (the "Reports") pertaining to
the Borrower's assets for internal use by Bank One from information furnished to
it by or on behalf of the Borrower, after Bank One has exercised its rights of
inspection pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the LC Issuer and each Lender, their respective affiliates, and each
of their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, the LC Issuer or any Lender or any affiliate is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Credit
Extension hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
9.7. NUMBERS OF DOCUMENTS. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.8. ACCOUNTING. (i) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall (unless otherwise disclosed to the Lenders in
writing at the time of delivery thereof in the manner described in subsection
(ii) below) be prepared, in accordance with Agreement Accounting Principles
(subject, in the case of financial statements which are not fiscal year end
statements, to the absence of footnotes and year-end audit adjustments);
PROVIDED that, if the Borrower notifies the Agent that it wishes to amend any
covenant in Article VI to eliminate the effect of any change in Agreement
Accounting Principles (or if the Agent notifies the Borrower that the Agent or
the Required Lenders wish to amend Article VI for such purpose), then the
Borrower's compliance with such covenants shall be determined on the basis of
Agreement Accounting Principles in effect immediately before the relevant change
in Agreement Accounting Principles became effective until either such notice is
withdrawn or such covenant or any such defined term is amended in a manner
satisfactory to the Borrower and the Required Lenders. Notwithstanding anything
herein, in any financial statements of the Borrower or in Agreement Accounting
Principles to the contrary, for purposes of calculating and determining
compliance with the financial covenants in Article VI and determining the
Applicable Margin, including defined terms used therein, any Acquisition made by
the Borrower or any of its Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
period for which such financial covenants and the Applicable Margin were
calculated shall be deemed to have occurred on the first day of the relevant
period for which such financial covenants and the Applicable Margin were
calculated on a pro forma basis acceptable to the Agent.
(ii) The Borrower shall deliver to the Lenders at the same
time as the delivery of any financial statement under Section 6.1(i) or (ii):
(x) a description in reasonable detail of any material variation between the
application or other modification of accounting principles employed in the
preparation of such statement and the application or other modification of
accounting principles employed in the preparation of the immediately prior
annual or quarterly financial statements as to which no objection has been made
in accordance with the last sentence of subsection (i) above and (y) reasonable
estimates of
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the difference between such statements arising as a consequence thereof.
9.9. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. NONLIABILITY OF LENDERS. The relationship between the Borrowers
on the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger nor
any Lender shall have any fiduciary responsibilities to the Borrowers. Neither
the Agent, the Arranger, the LC Issuer nor any Lender undertakes any
responsibility to the Borrowers to review or inform the Borrowers of any matter
in connection with any phase of any Borrower's business or operations. Each
Borrower agrees that neither the Agent, the Arranger, the LC Issuer nor any
Lender shall have liability to such Borrower (whether sounding in tort, contract
or otherwise) for losses suffered by such Borrower in connection with, arising
out of, or in any way related to, the transactions contemplated and the
relationship established by the Loan Documents, or any act, omission or event
occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger, the LC Issuer nor any
Lender shall have any liability with respect to, and each Borrower hereby
waives, releases and agrees not to sue for, any special, indirect, consequential
or punitive damages suffered by such Borrower in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.
9.11. CONFIDENTIALITY. Each Lender agrees to hold any confidential
information which it may receive from the Borrowers pursuant to this Agreement
in confidence, except for disclosure (i) to its Affiliates and to other Lenders
and their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.4.
9.12. NONRELIANCE. Each Lender hereby represents that it is not relying
on or looking to any Margin Stock for the repayment of the Credit Extensions
provided for herein.
9.13. DISCLOSURE. The Borrowers and each Lender hereby acknowledge and
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Borrower and its
Affiliates.
ARTICLE X
THE AGENT
---------
10.1. APPOINTMENT; NATURE OF RELATIONSHIP. Bank One, Michigan is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under
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each other Loan Document, and each of the Lenders irrevocably authorizes the
Agent to act as the contractual representative of such Lender with the rights
and duties expressly set forth herein and in the other Loan Documents. The Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article X. Notwithstanding the use of the defined term
"Agent," it is expressly understood and agreed that the Agent shall not have any
fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Agent is merely acting as the contractual
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of the Uniform Commercial Code and (iii) is acting as an independent
contractor, the rights and duties of which are limited to those expressly set
forth in this Agreement and the other Loan Documents. Each of the Lenders hereby
agrees to assert no claim against the Agent on any agency theory or any other
theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.
10.2. POWERS. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrowers, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of any Borrower or any
guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to
the Lenders information that is not required to be furnished by the Borrowers to
the Agent at such time, but is voluntarily furnished by the Borrowers to the
Agent (either in its capacity as Agent or in its individual capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so
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by the Required Lenders. The Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Loan Document unless
it shall first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this
Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9. NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
10.10. RIGHTS AS A LENDER. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender"
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or "Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
10.11. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent, with the consent of
the Borrower, which consent shall not be unreasonably withheld or delayed and
shall not be required if any Default has occurred and is continuing. If no
successor Agent shall have been so appointed by the Required Lenders within
thirty days after the resigning Agent's giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Agent. Notwithstanding the previous sentence, the Agent may
at any time without the consent of the Borrower or any Lender, appoint any of
its Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13. AGENT AND ARRANGER FEES. The Borrower agrees to pay to the Agent
and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger from time to time.
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10.14. DELEGATION TO AFFILIATES. The Borrowers and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. CO-AGENTS, DOCUMENTATION AGENT, SYNDICATION AGENT, ETC. No
Lender identified in this Agreement as a "co-agent", "managing agent",
"documentation agent" or "syndication agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Agent in Section 10.11.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. SETOFF. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if any Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of such Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Shares of the
Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrowers and
the Lenders and their respective successors
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and assigns, except that (i) no Borrower shall have the right to assign its
rights or obligations under the Loan Documents and (ii) any assignment by any
Lender must be made in compliance with Section 12.3. The parties to this
Agreement acknowledge that clause (ii) of this Section 12.1 relates only to
absolute assignments and does not prohibit assignments creating security
interests, including, without limitation, (x) any pledge or assignment by any
Lender of all or any portion of its rights under this Agreement and any Note to
a Federal Reserve Bank or (y) in the case of a Lender which is a fund, any
pledge or assignment of all or any portion of its rights under this Agreement
and any Note to its trustee in support of its obligations to its trustee;
provided, however, that no such pledge or assignment creating a security
interest shall release the transferor Lender from its obligations hereunder
unless and until the parties thereto have complied with the provisions of
Section 12.3. The Agent may treat the Person which made any Loan or which holds
any Note as the owner thereof for all purposes hereof unless and until such
Person complies with Section 12.3; provided, however, that the Agent may in its
discretion (but shall not be required to) follow instructions from the Person
which made any Loan or which holds any Note to direct payments relating to such
Loan or Note to another Person. Any assignee of the rights to any Loan or any
Note agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder or assignee of the rights to such Loan.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Outstanding Credit
Exposure of such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Outstanding
Credit Exposure and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable
by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and
the Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents.
12.2.2. VOTING RIGHTS. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Extension or Commitment in which such Participant has an interest which
would require consent of all of the Lenders pursuant to the terms of
Section 8.2 or of any other Loan Document.
12.2.3. BENEFIT OF SETOFF. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
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Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("Purchasers") all
or any part of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of Exhibit C or in
such other form as may be agreed to by the parties thereto. The consent
of the Borrower, the Agent and the LC Issuer shall be required prior to
an assignment becoming effective with respect to a Purchaser which is
not a Lender or an Affiliate thereof; provided, however, that if a
Default has occurred and is continuing, the consent of the Borrower
shall not be required. Such consent shall not be unreasonably withheld
or delayed. Each such assignment with respect to a Purchaser which is
not a Lender or an Affiliate thereof shall (unless each of the Borrower
and the Agent otherwise consents) be in an amount not less than the
lesser of (i) $5,000,000 or (ii) the remaining amount of the assigning
Lender's Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).
Additionally, each such assignment by a Lender with respect to a
Purchaser which is not an Affiliate of such Lender shall (unless each
of the Borrower and the Agent otherwise consents) be made
simultaneously with an assignment to such Purchaser by such Lender of a
pro rata amount of the rights and obligations of such Lender and its
Affiliates under the 364-Day Credit Agreement.
12.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Section
12.3.1, and (ii) payment of a $3,500 fee to the Agent for processing
such assignment (unless such fee is waived by the Agent), such
assignment shall become effective on the effective date specified in
such assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Outstanding Credit Exposure under the
applicable assignment agreement constitutes "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and
after the effective date of such assignment, such Purchaser shall for
all purposes be a Lender party to this Agreement and any other Loan
Document executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Outstanding Credit Exposure
assigned to such Purchaser. Upon the consummation of any assignment to
a Purchaser pursuant to this Section 12.3.2, the transferor Lender, the
Agent and the Borrower shall, if the transferor Lender or the Purchaser
desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
12.4. DISSEMINATION OF INFORMATION. The Borrowers authorize each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without
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limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
-------
13.1. NOTICES. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth in its administrative questionnaire or (z)
in the case of any party, at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered (or, in the case of electronic transmission, received) at the
address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
13.2. CHANGE OF ADDRESS. Any Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.
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ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
------------------------------------------------------------
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF MICHIGAN.
15.2. CONSENT TO JURISDICTION. EACH BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR MICHIGAN STATE
COURT SITTING IN DETROIT, MICHIGAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST
ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
ANY BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF
THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DETROIT, MICHIGAN.
15.3. WAIVER OF JURY TRIAL. EACH BORROWER, THE AGENT, THE LC ISSUER AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
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IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Agent have executed this Agreement as of the date first above written.
PIONEER-STANDARD ELECTRONICS, INC.
By: /s/ James L. Bayman
----------------------------------------------
James L. Bayman
Title: Chairman and Chief Executive Officer
------------------------------------------
6065 Parkland Blvd.
Cleveland, Ohio 44124
Attention: Steven M. Billick, chief financial
officer
Telephone: (440) 720-8680
FAX: (440) 720-8677
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Commitments
- -----------
$36,666,669 BANK ONE, MICHIGAN,
as Administrative Agent and as a Lender
By: /s/ Paul R. DeMelo
------------------------------------
PAUL R. DEMELO
Title: MANAGING DIRECTOR
----------------------------------
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Krista Flynn
Telephone: (313) 225-2487
FAX: (313) 226-0085
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Commitments
- -----------
$33,000,000 KEYBANK NATIONAL ASSOCIATION,
as Syndication Agent and as a Lender
By: /s/ Brendon A. Lawlor
------------------------------------
Title: Vice President
----------------------------------
127 Public Square
Cleveland, OH 44114
Attention: Brendan Lawlor
Telephone: (216) 689-5642
FAX: (216) 689-4981
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Commitments
- -----------
$29,333,333 ABN AMRO BANK N.V.,
as Documentation Agent and as a Lender
By: /s/ Authorized Signatory By: /s/ N. Smith
---------------------------- ------------------------------------
Title: Vice President Title: Assistant Vice President
-------------------------- ----------------------------------
208 S. LaSalle, Suite 1500
Chicago, IL 60604
Attention: Credit Administration
Telephone: (312) 992-5110
FAX: (312) 992-5111
63
70
Commitments
- -----------
$25,666,667 FIRSTAR BANK, NA
as Managing Agent and as Lender
By: /s/ W. Gregory Schild
------------------------------------
Title: Vice President
----------------------------------
1350 Euclid Avenue, Suite 800
Cleveland, OH 44115
Attention: John D. Barrett
Telephone: (216) 623-9221
FAX: (216) 623-9208
64
71
Commitments
- -----------
$18,333,333 BANK OF TOKYO-MITSUBISHI, LTD.,
as a Co-Agent and as a Lender
By: /s/ Hasashi Miyashiro
------------------------------------
Hasashi Miyashiro
Title: Deputy General Manager
---------------------------------
227 W. Monroe St.
Suite 2300
Chicago, IL 60606
Attention: Thomas Denio
Telephone: (312) 696-4665
FAX: (312) 696-4535
65
72
Commitments
- -----------
$18,333,333 THE CHASE MANHATTAN BANK,
as a Co-Agent and as a Lender
By: /s/ Henry W. Centa
------------------------------------
Title: Vice President
----------------------------------
250 West Huron Road
Cleveland, OH 44113
Attention: Henry W. Centa
Telephone: (216) 479-2534
FAX: (216) 479-2732
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Commitments
- -----------
$18,333,333 COMERICA BANK,
as a Co-Agent and as a Lender
By: /s/ Jeffrey J. Judge
-------------------------------------
Title: Vice President
---------------------------------
500 Woodward Avenue
MC 3268
Detroit, Michigan 48226
Attention: Jeffrey J. Judge
Telephone: (313) 222-3801
FAX: (313) 222-9514
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74
Commitments
- -----------
$18,333,333 HARRIS TRUST AND SAVINGS BANK,
as a Co-Agent and as a Lender
By: /s/ Michael J. Johnson
------------------------------------
MICHAEL J. JOHNSON
Title: VICE PRESIDENT
----------------------------------
111 West Monroe Street
Chicago, IL 60603
Attention: Michael J. Johnson
Telephone: (312) 461-5457
FAX: (312) 461-5225
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75
Commitments
- -----------
$18,333,333 MELLON BANK, N.A.,
as a Co-Agent and as a Lender
By: Mark F. Johnston
-------------------------------------
Title: VP
----------------------------------
Three Mellon Bank Center
Room 1203
Pittsburgh, PA 15259
Attention: Mark F. Johnston
Telephone: (412) 326-2793
FAX: (412) 326-1914
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Commitments
- -----------
$18,333,333 NATIONAL CITY BANK ,
as a Co-Agent and as a Lender
By: /s/ Anthony J. DiMare
---------------------------------------
Title: S.V.P
------------------------------------
1900 East Ninth Street - Loc. 2083
Cleveland, OH 44114
Attention: Anthony J. DiMare
Telephone: (216) 575-3344
FAX: (216) 575-9396
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77
Commitments
- -----------
$11,000,000 FIFTH THIRD BANK, NORTHEASTERN OHIO
By: /s/ R. C. Lanctot
------------------------------------
Title: V.P.
----------------------------------
1404 East 9th Street
Cleveland, OH 44114
Attention: Roy C. Lanctot
Telephone: (216) 274-5473
FAX: (216) 274-5510
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78
Commitments
- -----------
$11,000,000 FIRSTMERIT BANK, N.A.
By: /s/ Edward O. Yannayon
-------------------------------------
Title: Vice President
----------------------------------
106 S. Main Street
Akron, Ohio 44308
Attention: Ed Yannayon
Telephone: (330) 996-6044
FAX: (330) 996-6272
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Commitments
- -----------
$11,000,000 THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
--------------------------------------
Peter L. Chinnici
Title: Senior Vice President & Group Head
------------------------------------
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Commitments
- -----------
$7,333,333 BW CAPITAL MARKETS, INC.
By: /s/ Philip G. Waldrop /s/ Thomas A. Lowe
---------------------------------------------
Philip G. Waldrop Thomas A. Lowe
Title: Vice President Vice President
------------------------------------------
630 Fifth Avenue
Rockefeller Center
Suite 1919
New York, NY 1011
Attention: Thomas A. Lowe
Telephone: (212) 218-1804
FAX: (212) 218-1816
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PRICING SCHEDULE
============================ ============== ================== ================== ================= ================
APPLICABLE MARGIN LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
STATUS STATUS STATUS STATUS STATUS
- ---------------------------- -------------- ------------------ ------------------ ----------------- ----------------
Eurodollar Rate and Letter 0.80% 1.00% 1.20% 1.50% 1.80%
of Credit Applicable Margin
- ---------------------------- -------------- ------------------ ------------------ ----------------- ----------------
Floating Rate Applicable 0% 0% 0% 0% 0%
Margin
============================ ============== ================== ================== ================= ================
Facility Fee Applicable 0.20% 0.25% 0.30% 0.375% 0.45%
Margin
============================ ============== ================== ================== ================= ================
Notwithstanding the above table or anything herein to the contrary, (a)
if at any time the Borrower has no Moody's Rating or no S&P Rating, Level V
Status shall exist and (b) if the Borrower's Moody's Rating and S&P Rating are
split by more than one level, the Status shall be determined based on the rating
one level below the higher rating.
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, the Borrower's
Moody's Rating is Baa2 or better or the Borrower's S&P Rating is BBB or better.
"Level II Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status and (ii) the Borrower's Moody's Rating is
Baa3 or better or the Borrower's S&P Rating is BBB- or better.
"Level III Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Borrower's Moody's Rating is Ba1 or better or the Borrower's S&P Rating is BB+
or better.
"Level IV Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status, Level II Status or Level III Status and
(ii) the Borrower's Moody's Rating is Ba2 or better or the Borrower's S&P Rating
is BB or better.
"Level V Status" exists at any date if, on such date, the Borrower has
not qualified for Level I Status, Level II Status, Level III or Level IV Status.
"Moody's Rating" means, at any time, the rating issued by Moody's and
then in effect with respect to the Borrower's senior unsecured long-term debt
securities without third-party credit enhancement.
"S&P Rating" means, at any time, the rating issued by S&P and then in
effect with respect to the Borrower's senior unsecured long-term debt securities
without third-party credit enhancement.
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"Status" means either Level I Status, Level II Status, Level III
Status, Level IV or Level V Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as determined
from its then-current Moody's and S&P Ratings. The credit rating in effect on
any date for the purposes of this Schedule is that in effect at the close of
business on such date.
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EXHIBIT A
FORM OF OPINION
[To be replaced by opinion issued at closing]
,
--------------
The Agent, the LC Issuer and the Lenders who are parties to the
Five-Year Credit Agreement described below.
Gentlemen/Ladies:
We are counsel for Pioneer-Standard Electronics, Inc. (the "Borrower"),
and have represented the Borrower in connection with its execution and delivery
of a Five-Year Credit Agreement dated as of September 15, 2000 (the "Agreement")
among the Borrowers, the Lenders named therein, and Bank One, Michigan, as Agent
and as LC Issuer, and providing for Credit Extensions in an aggregate principal
amount not exceeding $275,000,000 at any one time outstanding. All capitalized
terms used in this opinion and not otherwise defined herein shall have the
meanings attributed to them in the Agreement.
We have examined the Borrower's **[describe constitutive documents of
Borrower and appropriate evidence of authority to enter into the transaction]**,
the Loan Documents and such other matters of fact and law which we deem
necessary in order to render this opinion. Based upon the foregoing, it is our
opinion that:
l. Each of the Borrower and its Subsidiaries is a corporation,
partnership or limited liability company duly and properly incorporated or
organized, as the case may be, validly existing and (to the extent such concept
applies to such entity) in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
2. The execution and delivery by the Borrower of the Loan Documents to
which it is a party and the performance by the Borrower of its obligations
thereunder have been duly authorized by proper corporate proceedings on the part
of the Borrower and will not:
(a) require any consent of the Borrower's shareholders or
members (other than any such consent as has already been given and
remains in full force and effect);
(b) violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or any of
its Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (iii)
the provisions of any indenture, instrument or agreement to which the
Borrower or any of its Subsidiaries is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a
default thereunder; or
(c) result in, or require, the creation or imposition of any
Lien in, of or on the Property of the Borrower or a Subsidiary pursuant
to the terms of any indenture, instrument or agreement binding upon the
Borrower or any of its Subsidiaries.
84
3. The Loan Documents to which the Borrower is a party have been duly
executed and delivered by the Borrower and constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their terms except to the extent the enforcement thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and subject also to the availability of equitable remedies if
equitable remedies are sought.
4. There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the best of our knowledge after due
inquiry, threatened against the Borrower or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
5. No order, consent, adjudication, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by the Borrower or any of its
Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement, the payment and performance by
the Borrower of the Obligations, or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
This opinion may be relied upon by the Agent, the LC Issuer the Lenders
and their participants, assignees and other transferees.
Very truly yours,
85
EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Five-Year Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Five-Year Credit Agreement dated as of September 15, 2000 (as amended, modified,
renewed or extended from time to time, the "Agreement") among Pioneer-Standard
Electronics, Inc. (the "Borrower"), the foreign subsidiary borrowers and lenders
party thereto and Bank One, Michigan, as Agent for the Lenders and as LC Issuer.
Unless otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of the Borrower;
---------------------
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of _______, ____.
__________________
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SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of _____ and ______ of
the Agreement
80
87
EXHIBIT C
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
_______________ (the "Assignor") and ___________________ (the "Assignee") is
dated as of _________, _______. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Five-Year Credit
Agreement (which, as it may be amended, modified, renewed or extended from time
to time is herein called the "Credit Agreement") described in Item 1 of Schedule
1 attached hereto ("Schedule 1"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents, such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement and the other Loan
Documents relating to the facilities listed in Item 3 of Schedule 1. The
aggregate Commitment (or Outstanding Credit Exposure, if the applicable
Commitment has been terminated) purchased by the Assignee hereunder is set forth
in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after
this Assignment Agreement, together with any consents required under the Credit
Agreement, are delivered to the Agent. In no event will the Effective Date occur
if the payments required to be made by the Assignee to the Assignor on the
Effective Date are not made on the proposed Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and assignment of
Outstanding Credit Exposure hereunder, the Assignee shall pay the Assignor, on
the Effective Date, the amount agreed to by the Assignor and the Assignee. On
and after the Effective Date, the Assignee shall be entitled to receive from the
Agent all payments of principal, interest, Reimbursement Obligations and fees
with respect to the interest assigned hereby. The Assignee will promptly remit
to the Assignor any interest on Loans and fees received from the Agent which
relate to the portion of the Commitment or Outstanding Credit Exposure assigned
to the Assignee hereunder for periods prior to the Effective Date and not
previously paid by the Assignee to the Assignor. In the event that either party
hereto receives any payment to which the other party hereto is entitled under
this Assignment Agreement, then the party receiving such amount shall promptly
remit it to the other party hereto.
5. RECORDATION FEE. The Assignor and Assignee each agree to pay
one-half of the recordation fee required to be paid to the Agent in connection
with this Assignment Agreement unless otherwise specified in Item 6 of Schedule
1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is
duly
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88
authorized. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignor and that the Assignor makes
no other representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan Document,
including without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of any Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
property, books or records of any Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements requested by the Assignee and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iii) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto, (iv) confirms
that the execution and delivery of this Assignment Agreement by the Assignee is
duly authorized, (v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to
be performed by it as a Lender, (vi) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vii)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are "plan assets" as defined
under ERISA and that its rights, benefits and interests in and under the Loan
Documents will not be "plan assets" under ERISA, (viii) agrees to indemnify and
hold the Assignor harmless against all losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement, and
(ix) if applicable, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that the Assignee is entitled to receive
payments under the Loan Documents without deduction or withholding of any United
States federal income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Michigan.
9. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement may
be executed in counterparts. Transmission by facsimile of an executed
counterpart of this Assignment Agreement shall be deemed to constitute due and
sufficient delivery of such counterpart and such facsimile shall be deemed to be
an original counterpart of this Assignment Agreement.
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89
IN WITNESS WHEREOF, the duly authorized officers of the parties hereto
have executed this Assignment Agreement by executing Schedule 1 hereto as of the
date first above written.
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90
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: _______, ______
3. Amounts (As of Date of Item 2 above):
Facility Facility Facility Facility
1* 2* 3* 4*
-------- --------- -------- --------
a. Assignee's percentage
of each Facility purchased
under the Assignment
Agreement** % % % %
-------- -------- ------- --------
b. Amount of
each Facility
purchased
under the Assignment
Agreement*** $ $ $ $
------- ------- ------- -------
4. Assignee's Commitment (or
Outstanding Credit Exposure
with respect to terminated
Commitments) purchased
hereunder: $
--------
5. Proposed Effective Date:
------------------------
6. Non-standard Recordation Fee
Arrangement N/A***
[Assignor/Assignee
to pay 100% of fee]
[Fee waived by Agent]
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
------------------------------ -----------------------------
Title: Title:
--------------------------- --------------------------
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ACCEPTED AND CONSENTED TO**** BY ACCEPTED AND CONSENTED TO BY
[NAME OF BORROWER] [NAME OF AGENT]
By: By:
----------------------------- --------------------------------
Title: Title:
-------------------------- ------------------------------
* Insert specific facility names per Credit Agreement
** Percentage taken to 10 decimal places
*** If fee is split 50-50, pick N/A as option
**** Delete if not required by Credit Agreement
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Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
--------------------------------
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
--------------------
CONTACT:
- -------
Name: Telephone No.:
----------------------------- ----------------------
Fax No.: Telex No.:
------------------------- --------------------------
Answerback:
------------------------
PAYMENT INFORMATION:
- --------------------
Name & ABA # of Destination Bank:
----------------------------------------------
----------------------------------------------
Account Name & Number for Wire Transfer:
---------------------------------------
---------------------------------------
Other Instructions:
------------------------------------------------------------
- --------------------------------------------------------------------------------
ADDRESS FOR NOTICES FOR ASSIGNOR:
- -------------------------------- ----------------------------------------------
----------------------------------------------
----------------------------------------------
ASSIGNEE INFORMATION
--------------------
CREDIT CONTACT:
- --------------
Name: Telephone No.:
-------------------------- ---------------------
Fax No.: Telex No.:
---------------------- -------------------------
Answerback:
------------------------
KEY OPERATIONS CONTACTS:
- -----------------------
Booking Installation: Booking Installation:
------------------ --------------
Name: Name:
---------------------------------- -----------------------------
Telephone No.: Telephone No.:
------------------------- ---------------------
Fax No.: Fax No.:
------------------------------ ---------------------------
Telex No.: Telex No.:
---------------------------- -------------------------
Answerback: Answerback:
---------------------------- ------------------------
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93
PAYMENT INFORMATION:
- --------------------
Name & ABA # of Destination Bank:
-----------------------------------------------
-----------------------------------------------
Account Name & Number for Wire Transfer:
----------------------------------------
----------------------------------------
Other Instructions:
-------------------------------------------------------------
- --------------------------------------------------------------------------------
ADDRESS FOR NOTICES FOR ASSIGNEE:
- -------------------------------- ----------------------------------------------
----------------------------------------------
----------------------------------------------
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BANK ONE INFORMATION
--------------------
Assignee will be called promptly upon receipt of the signed agreement.
INITIAL FUNDING CONTACT: SUBSEQUENT OPERATIONS CONTACT:
- ----------------------- -----------------------------
Name: Name:
------------------------ -----------------------------
Telephone No.: (313) Telephone No.: (313)
--------------------- -------------------
Fax No.: (313) Fax No.: (313)
--------------------------- -------------------------
Bank One Telex No.:
--------------
INITIAL FUNDING STANDARDS:
- -------------------------
Libor - Fund 2 days after rates are set.
BANK ONE WIRE INSTRUCTIONS: Bank One, Michigan, ABA #
- -------------------------- ------------
LS2 Incoming Account #
--------------
Ref:
----------------
ADDRESS FOR NOTICES FOR BANK ONE: 611 Woodward, Detroit, MI 60670
- -------------------------------- Attn:
---------------------
Fax No. (313) or (313)
--------- ----------
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EXHIBIT D
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To Bank One, Michigan,
as Agent (the "Agent") under the Five-Year Credit Agreement
Described Below.
Re: Five-Year Credit Agreement, dated September 15, 2000 (as the same may
be amended or modified, the "Credit Agreement"), among Pioneer-Standard
Electronics, Inc.(the "Borrower"), the Foreign Subsidiary Borrowers and
Lenders party thereto, the LC Issuer and the Agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings
assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.15 of the Credit Agreement.
Facility Identification Number(s)
-----------------------------------------------
Customer/Account Name
-----------------------------------------------------------
Transfer Funds To
---------------------------------------------------------------
---------------------------------------------------------------
For Account No.
-----------------------------------------------------------------
Reference/Attention To
----------------------------------------------------------
Authorized Officer (Customer Representative) Date
---------------------------
- ----------------------------------------- --------------------------------
(Please Print) Signature
Bank Officer Name Date
----------------------------
- ----------------------------------------- --------------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
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EXHIBIT E
NOTE
[Date]
_______________________, a ___________________ (the "Borrower"),
promises to pay to the order of ____________________________________ (the
"Lender") the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to Article II of the Agreement (as hereinafter
defined), in immediately available funds at the main office of Bank One,
Michigan in Detroit, Michigan, as Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Five-Year Credit Agreement dated as of September 15, 2000
(which, as it may be amended or modified and in effect from time to time, is
herein called the "Agreement"), among the Borrower, the foreign subsidiary
borrowers and lenders party thereto, including the Lender, the LC Issuer and
Bank One, Michigan, as Agent, to which Agreement reference is hereby made for a
statement of the terms and conditions governing this Note, including the terms
and conditions under which this Note may be prepaid or its maturity date
accelerated. This Note is guaranteed pursuant to the Guaranty, all as more
specifically described in the Agreement, and reference is made thereto for a
statement of the terms and provisions thereof. Capitalized terms used herein and
not otherwise defined herein are used with the meanings attributed to them in
the Agreement.
---------------------------------
By:
------------------------------
Print Name:
----------------------
Title:
---------------------------
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SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF ____________,
DATED _________,
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
- ----------------------------------------------------------------------------------------------------------------
91