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Exhibit 10.5
364-DAY CREDIT AGREEMENT
DATED AS OF SEPTEMBER 15, 2000
AMONG
PIONEER-STANDARD ELECTRONICS, INC.,
THE LENDERS,
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..............................................................................................14
2.1. COMMITMENT.......................................................................................14
2.2. REQUIRED PAYMENTS; TERMINATION...................................................................14
2.3. RATABLE LOANS....................................................................................14
2.4. TYPES OF ADVANCES................................................................................14
2.6. FACILITY FEE; REDUCTIONS IN AGGREGATE COMMITMENT.................................................14
2.7. MINIMUM AMOUNT OF EACH ADVANCE...................................................................15
2.8. OPTIONAL PRINCIPAL PAYMENTS......................................................................15
2.9. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES..................................15
2.10. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES..................................................15
2.11. CHANGES IN INTEREST RATE, ETC........................................................................16
2.12. RATES APPLICABLE AFTER DEFAULT.......................................................................16
2.13. METHOD OF PAYMENT....................................................................................16
2.14. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.........................................................17
2.15. TELEPHONIC NOTICES...................................................................................17
2.16. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS.......................................................18
2.17. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND COMMITMENT REDUCTIONS......................18
2.18. LENDING INSTALLATIONS................................................................................18
2.19. NON-RECEIPT OF FUNDS BY THE AGENT....................................................................18
2.22. REPLACEMENT OF LENDER..................................................................................18
ARTICLE III. YIELD PROTECTION; TAXES.................................................................................19
3.1. YIELD PROTECTION.................................................................................19
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS..........................................................20
3.3. AVAILABILITY OF TYPES OF ADVANCES................................................................20
3.4. FUNDING INDEMNIFICATION..........................................................................20
3.5. TAXES............................................................................................20
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY.........................................................22
ARTICLE IV. CONDITIONS PRECEDENT.....................................................................................22
4.2. EACH CREDIT EXTENSION............................................................................23
ARTICLE V. REPRESENTATIONS AND WARRANTIES............................................................................23
5.1. EXISTENCE AND STANDING...........................................................................24
5.2. AUTHORIZATION AND VALIDITY.......................................................................24
5.3. NO CONFLICT; GOVERNMENT CONSENT..................................................................24
5.4. FINANCIAL STATEMENTS.............................................................................24
5.5. MATERIAL ADVERSE CHANGE..........................................................................24
5.6. TAXES............................................................................................25
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5.7. LITIGATION AND CONTINGENT OBLIGATIONS............................................................25
5.8. SUBSIDIARIES.....................................................................................25
5.9. ERISA............................................................................................25
5.10. ACCURACY OF INFORMATION..............................................................................25
5.11. REGULATIONS S, T, U AND X............................................................................25
5.12. MATERIAL AGREEMENTS..................................................................................25
5.13. COMPLIANCE WITH LAWS.................................................................................26
5.14. OWNERSHIP OF PROPERTIES..............................................................................26
5.15. PLAN ASSETS; PROHIBITED TRANSACTIONS.................................................................26
5.16. ENVIRONMENTAL MATTERS................................................................................26
5.17. INVESTMENT COMPANY ACT...............................................................................26
5.18. PUBLIC UTILITY HOLDING COMPANY ACT...................................................................26
ARTICLE VI. COVENANTS................................................................................................26
6.1. FINANCIAL REPORTING..............................................................................26
6.2. USE OF PROCEEDS..................................................................................28
6.3. NOTICE OF DEFAULT................................................................................28
6.4. CONDUCT OF BUSINESS..............................................................................28
6.5. TAXES............................................................................................28
6.6. INSURANCE........................................................................................28
6.7. COMPLIANCE WITH LAWS.............................................................................28
6.8. MAINTENANCE OF PROPERTIES........................................................................28
6.9. INSPECTION.......................................................................................29
6.11. INDEBTEDNESS.........................................................................................29
6.12. MERGER...............................................................................................29
6.13. SALE OF ASSETS.......................................................................................29
6.14. INVESTMENTS AND ACQUISITIONS.........................................................................30
6.15. LIENS................................................................................................31
[6.16. AFFILIATES...........................................................................................33
[6.17. FINANCIAL CONTRACTS..................................................................................33
6.18. FINANCIAL COVENANTS..................................................................................33
6.18.1. FIXED CHARGE COVERAGE RATIO..............................................................33
6.18.2. LEVERAGE RATIO...........................................................................33
6.18.3. MINIMUM NET WORTH........................................................................33
6.19. GUARANTIES...........................................................................................33
[6.18. SUBORDINATED INDEBTEDNESS; OTHER INDEBTEDNESS........................................................34
ARTICLE VII. DEFAULTS................................................................................................34
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.........................................................37
8.1. ACCELERATION; FACILITY LC COLLATERAL ACCOUNT.....................................................37
8.2. AMENDMENTS.......................................................................................37
8.3. PRESERVATION OF RIGHTS...........................................................................38
ARTICLE IX. GENERAL PROVISIONS........................................................................................38
9.1. SURVIVAL OF REPRESENTATIONS......................................................................38
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9.2. GOVERNMENTAL REGULATION..........................................................................38
9.3. HEADINGS.........................................................................................38
9.4. ENTIRE AGREEMENT.................................................................................39
9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT..................................................39
9.6. EXPENSES; INDEMNIFICATION........................................................................39
9.7. NUMBERS OF DOCUMENTS.............................................................................39
9.8. ACCOUNTING.......................................................................................40
9.9. SEVERABILITY OF PROVISIONS.......................................................................40
9.10. NONLIABILITY OF LENDERS..............................................................................40
9.11. CONFIDENTIALITY......................................................................................41
9.12. NONRELIANCE..........................................................................................41
9.13. DISCLOSURE...........................................................................................41
ARTICLE X. THE AGENT..................................................................................................41
10.1. APPOINTMENT; NATURE OF RELATIONSHIP..................................................................41
10.2. POWERS...............................................................................................41
10.3. GENERAL IMMUNITY.....................................................................................41
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC...........................................................42
10.5. ACTION ON INSTRUCTIONS OF LENDERS....................................................................42
10.6. EMPLOYMENT OF AGENTS AND COUNSEL.....................................................................42
10.7. RELIANCE ON DOCUMENTS; COUNSEL.......................................................................42
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION............................................................42
10.9. NOTICE OF DEFAULT....................................................................................43
10.10. RIGHTS AS A LENDER...................................................................................43
10.11. LENDER CREDIT DECISION...............................................................................43
10.12. SUCCESSOR AGENT......................................................................................43
10.13. AGENT AND ARRANGER FEES..............................................................................44
10.14. DELEGATION TO AFFILIATES.............................................................................44
[10.15. CO-AGENTS, DOCUMENTATION AGENT, SYNDICATION AGENT, ETC...............................................44
ARTICLE XI. SETOFF; RATABLE PAYMENTS..................................................................................44
11.1. SETOFF...............................................................................................44
11.2. RATABLE PAYMENTS.....................................................................................45
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.......................................................45
12.1. SUCCESSORS AND ASSIGNS...............................................................................45
12.2. PARTICIPATIONS.......................................................................................45
12.2.1. PERMITTED PARTICIPANTS; EFFECT...........................................................45
12.2.2. VOTING RIGHTS............................................................................46
12.2.3. BENEFIT OF SETOFF........................................................................46
12.3. ASSIGNMENTS..........................................................................................46
12.3.1. PERMITTED ASSIGNMENTS....................................................................46
12.3.2. EFFECT; EFFECTIVE DATE...................................................................46
12.4. DISSEMINATION OF INFORMATION.........................................................................47
12.5. TAX TREATMENT........................................................................................47
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ARTICLE XIII. NOTICES................................................................................................47
13.1. NOTICES..............................................................................................47
13.2. CHANGE OF ADDRESS....................................................................................48
ARTICLE XIV. COUNTERPARTS.............................................................................................48
ARTICLE XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.............................................48
15.1. CHOICE OF LAW........................................................................................48
15.2. CONSENT TO JURISDICTION..............................................................................48
15.3. WAIVER OF JURY TRIAL.................................................................................49
PRICING SCHEDULE.......................................................................................................65
EXHIBIT A. FORM OF OPINION...........................................................................................67
EXHIBIT B. COMPLIANCE CERTIFICATE....................................................................................69
EXHIBIT C. ASSIGNMENT AGREEMENT......................................................................................71
EXHIBIT D. LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION............................................................79
EXHIBIT E. NOTE......................................................................................................80
SCHEDULE 1. SUBSIDIARIES AND OTHER INVESTMENTS.......................................................................82
SCHEDULE 2. INDEBTEDNESS AND LIENS...................................................................................83
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364-DAY CREDIT AGREEMENT
This 364-Day Credit Agreement, dated as of September 15, 2000, is among
Pioneer-Standard Electronics, Inc., an Ohio corporation, the Lenders and Bank
One, Michigan, a Michigan banking corporation having its principal office in
Detroit, Michigan, 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 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.
"Affected Lender" is defined in Section 2.20.
"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 Credit Exposure of all the Lenders.
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"Agreement" means this 364-Day 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.
"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
(3) with respect to any other Person, the board or committee or manager
of such Person serving a similar function.
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"Borrower" means Pioneer-Standard Electronics, Inc., an Ohio
corporation, and its permitted successors and assigns.
"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 and LC Obligations (as each of those terms is defined in the
Five-Year Credit Agreement) under the Five-Year 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.
"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.
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"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.
"Commitment" means, for each Lender, the obligation of such Lender to
make Revolving Loans to the 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 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.
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"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.
"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 $150,000,000, under that certain Junior
Subordinated Indenture, dated as of March 23, 1998, of Borrower to Wilmington
Trust Company, as trustee, as supplemented by that certain First Supplemental
Indenture, dated as of March 23, 1998, of Borrower to Wilmington Trust Company,
as trustee.
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"Default" means an event described in Article VII.
"Defaulting Lender" means any Lender that (i) on any Borrowing Date
fails to make available to the Agent such Lender's Loans required to be made to
the Borrower on such Borrowing Date, or (ii) shall not have made a payment to
the Agent required under this Agreement. Once a Lender becomes a Defaulting
Lender, such Lender shall continue as a Defaulting Lender until such time as
such Defaulting Lender makes available to the Agent, the amount of such
Defaulting Lender's Loans together with all other amounts required to be paid to
the Agent pursuant to this Agreement.
"Dollar Amount" of any currency at any date shall mean (i) the amount
of such currency if such currency is Dollars or (ii) the equivalent in such
currency of such amount of Dollars if such currency is any currency other than
Dollars, calculated on the basis of the arithmetical mean of the buy and sell
spot rates of exchange of the Agent for such currency on the London market at
11:00 a.m., London time, on such date.
"Dollars" and "$" 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 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.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
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"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 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.
"Facility Termination Date" means the date two years after the
Revolving Credit Termination Date.
"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.
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"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.
"Five-Year Credit Agreement" means the Five-Year Credit Agreement dated
the date hereof among the Borrower, the Lenders and the Agent, as amended,
modified, replaced or refinanced from time to time.
"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.
"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.
"Guarantor" means any Subsidiary, if any, executing a Guaranty at any
time pursuant hereto.
"Guaranty" means each guaranty, if any, executed by any Guarantor in
favor of the Agent, for the ratable benefit of the Lenders, pursuant to Section
6.18 of this Agreement and 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.
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"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 owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"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.
"Loan Documents" means this Agreement, 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 the 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 or the Lenders thereunder.
"Material Indebtedness" is defined in Section 7.5.
"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.
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"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 accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent 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
aggregate principal amount of its Revolving Loans 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.
"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.
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"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.
"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
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from time to time in effect and any successor or other regulation or official
interpretation of said Board of Governors.
"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 Credit Termination Balance" means the aggregate principal
amount of Advances outstanding on the Revolving Credit Termination Date after
giving effect to any Advances made or repaid on such date.
"Revolving Credit Termination Date" means the date 364 days after the
date hereof, or any earlier date on which the Aggregate Commitment is reduced to
zero or otherwise terminated pursuant to the terms hereof.
"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.
"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
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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.
"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.
"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.
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"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 Revolving Credit Termination Date, each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make Revolving Loans to
the Borrower, provided that, after giving effect to the making of each such
Loan, such Lender's Outstanding Credit Exposure shall not exceed its Commitment
and 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
Revolving Credit Termination Date. The Commitments to extend credit hereunder
shall expire on the Revolving Credit Termination Date.
2.2. REQUIRED PAYMENTS; TERMINATION. Unless earlier payment is
required hereunder, the Revolving Credit Termination Balance and all other
unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date. Additionally, the Borrower shall promptly pay the Aggregate
Outstanding Credit Exposure to the extent the 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 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. [Intentionally Omitted]
2.6. FACILITY FEE; REDUCTIONS IN AGGREGATE COMMITMENT. (i) The Borrower
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 Revolving Credit Termination Date and,
after the Revolving Credit Termination Date, on the average daily principal
amount of such Lender's Outstanding Credit Exposure, 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
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(a) the amount of the Aggregate Commitment may not be reduced below the
Aggregate Outstanding Credit Exposure and (b) simultaneously with any such
reduction, the Borrower shall reduce the Aggregate Commitments (as defined in
the Five-Year Credit Agreement) under the Five-Year Credit Agreement on a pro
rata basis. All accrued facility fees shall be payable on the effective date of
any termination of the obligations of the Lenders to make Advances hereunder.
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 shall be in the minimum amount of
$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, 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 upon
two Business Days' prior notice to the Agent. 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 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 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
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elect from time to time to convert all or any part of a Floating Rate Advance
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 (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 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. 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, and (ii)
each Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 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 shall be applicable to all Advances
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 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
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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, and (ii) SECOND, to Advances required to be made by such Defaulting
Lender on any Borrowing Date to the extent such Defaulting Lender fails to make
such Advances. 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 and fees as it becomes due hereunder.
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
and (c) 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 substantially in the form of Exhibit E (each a "Note"). In such
event, the Borrower shall prepare, execute and deliver to such Lender such Note
payable to the order of such Lender. Thereafter, the Loans evidenced by 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 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.
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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 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 at any
Lending Installation selected by such Lender 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 and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender 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 and for whose account Loan payments are
to be made.
2.19. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the 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 case of a Lender, the
proceeds of a Loan or (ii) in the case of the 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 the 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 the Borrower, the interest rate applicable to the relevant Loan.
2.20. 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
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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.
ARTICLE III
YIELD PROTECTION; TAXES
-----------------------
3.1. YIELD PROTECTION. 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 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 to
any Taxes, or changes the basis of taxation of payments (other
than with respect to Excluded Taxes) to any Lender in respect
of its Eurodollar Loans, 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 (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
of making, funding or maintaining its Eurodollar Loans, or
reduces any amount receivable by any Lender or any applicable
Lending Installation in connection with its Eurodollar Loans,
or requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of
Eurodollar Loans held or interest received by it, by an amount
deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation, as the case may be, of making or maintaining
its Eurodollar Loans or Commitment or to reduce the return received by such
Lender or applicable Lending Installation, as the case may be, in
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connection with such Eurodollar Loans or Commitment, then, within 30 days of
demand by such Lender, the Borrower shall pay such Lender such additional amount
or amounts as will compensate such Lender for such increased cost or reduction
in amount received.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 30 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Outstanding
Credit Exposure or its Commitment to make Loans, as the case may be, hereunder
(after taking into account such Lender'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 any Lending Installation or any corporation
controlling any Lender. "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,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance 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.
3.5. TAXES. (i) All payments by Borrower to or for the account of any
Lender or the Agent hereunder or under any Note shall be made free and clear of
and without deduction for any and all Taxes. If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder to
any Lender 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 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) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
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(ii) In addition, the 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 from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent 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 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 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 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
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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 ADVANCE. The Lenders shall not be required to make the
initial Advance hereunder unless the Borrower has furnished to the Agent with
sufficient copies for the Lenders:
(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.
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(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Borrowing 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) 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.
(ix) The Five-Year Credit Agreement shall close simultaneously with
this Agreement.
(x) Payment in full and termination of the National City Credit
Agreement simultaneously with such initial Advance.
(xi) Such other documents as the Agent or its counsel may have
reasonably requested.
4.2. EACH BORROWING. The Lenders shall not be required to make any
Borrowing unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Borrowing 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) All legal matters incident to the making of such Borrowing
shall be satisfactory to the Agent and its counsel.
Each Borrowing Notice with respect to each such Borrowing 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
------------------------------
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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. The 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 the 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 the Borrower is a party constitute legal, valid and binding
obligations of the Borrower enforceable against the 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 the 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 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 other material 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 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 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 Borrower 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.
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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 Borrowings. 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, 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.
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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. ss.
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
Borrowings 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 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:
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(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.
(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.
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(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 Borrowings 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 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
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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.
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 (as defined in the
Five-Year Credit Agreement) 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:
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(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 Five-Year Credit Agreement is reduced,
on a pro rata basis between the Aggregate Commitment hereunder
and under the Five-Year Credit Agreement, by an amount equal
to 100% of the aggregate amount of such financing in 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
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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 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 Five-Year 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:
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(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.
(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.
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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 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
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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 the 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 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
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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 Borrowing, 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.
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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, or nonpayment of interest upon any Loan or of any facility
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 the 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.
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
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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.
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.
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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' 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. (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 shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Agent or any Lender. If any other Default occurs, the Agent, with the
consent of or at the request of the Required Lenders may terminate or suspend
the obligations of the Lenders to make Loans hereunder 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 the Borrower hereby expressly waives.
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, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
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 Borrower 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 Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan or forgive all or any
portion of the principal amount thereof, any accrued interest
or fees or reduce the Applicable Margin or the Applicable Fee
Rate or extend the time of payment of interest or fees
thereon.
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(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Revolving Credit Termination Date, 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, the Commitment of any Lender hereunder,
or permit the Borrower to assign its rights under this
Agreement.
(iv) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. 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.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders 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 Borrowing notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Borrowing
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 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 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 Borrower contained in this Agreement, as updated from time to time in
accordance with Section 8.2, shall survive the making of the Borrowings herein
contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the 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.
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9.4. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent 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
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 and the Lenders, which attorneys may be employees of the
Agent, the Arranger or the Lenders) paid or incurred by the Agent, the Arranger
or any Lender in connection with the collection and enforcement of the Loan
Documents. Expenses being reimbursed by 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 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 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 Borrowing 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.
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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 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 Borrower on
the one hand and the Lenders 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 Borrower. Neither the Agent,
the Arranger nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations. The Borrower agrees that neither the Agent,
the Arranger nor any Lender shall have liability to the Borrower (whether
sounding in tort, contract or otherwise) for losses suffered by the 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 nor any Lender
shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to sue for, any special, indirect, consequential or
punitive damages suffered by the Borrower in connection with, arising out of, or
in any way related to the Loan Documents or the transactions contemplated
thereby.
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9.11. CONFIDENTIALITY. Each Lender agrees to hold any confidential
information which it may receive from the Borrower 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 Borrowings provided
for herein.
9.13. DISCLOSURE. The Borrower 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 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 Borrower, 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
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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 the 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 Borrower to
the Agent at such time, but is voluntarily furnished by the Borrower 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 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
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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" 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
43
49
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.
10.14. DELEGATION TO AFFILIATES. The Borrower 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 the 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
44
50
Lender to or for the credit or account of the 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 Borrower and the
Lenders and their respective successors 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
45
51
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
Borrowing 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
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 and the Agent 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 Five-Year 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
46
52
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 Borrower authorizes 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 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
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53
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. The 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 and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.
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. THE 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 OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT 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.
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54
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT 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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55
IN WITNESS WHEREOF, the Borrower, the Lenders 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
50
56
Commitments
- -----------
$13,333,331 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
51
57
Commitments
- -----------
$12,000,000 KEYBANK NATIONAL ASSOCIATION,
as Syndication Agent and as a Lender
By: /s/ Brendan Lawlor
-------------------------------------
Brendan Lawlor
Title: Vice President
----------------------------------
127 Public Square
Cleveland, OH 44114
Attention: Brendan Lawlor
Telephone: (216) 689-5642
FAX: (216) 689-4981
52
58
Commitments
- -----------
$10,666,667 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
53
59
Commitments
- -----------
$9,333,333 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
54
60
Commitments
- -----------
$6,666,667 BANK OF TOKYO-MITSUBISHI, LTD.,
as a Co-Agent and as a Lender
By: /s/ Hisashi Miyashiro
------------------------------------
Hisashi 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
55
61
Commitments
- -----------
$6,666,667 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
56
62
Commitments
- -----------
$6,666,667 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
57
63
Commitments
- -----------
$6,666,667 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
58
64
Commitments
- -----------
$6,666,667 MELLON BANK, N.A.,
as a Co-Agent and as a Lender
By: /s/ Mark F. Johnston
-------------------------------------
Title: Vice President
----------------------------------
Three Mellon Bank Center
Room 1203
Pittsburgh, PA 15259
Attention: Mark F. Johnston
Telephone: (412) 326-2793
FAX: (412) 326-1914
59
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Commitments
- -----------
$6,666,667 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
60
66
Commitments
- -----------
$4,000,000 FIFTH THIRD BANK, NORTHEASTERN OHIO
By: /s/ R. C. Lanctot
-------------------------------------
Title: Vice President
----------------------------------
1404 East 9th Street
Cleveland, OH 44114
Attention: Roy C. Lanctot
Telephone: (216) 274-5473
FAX: (216) 274-5510
61
67
COMMITMENTS
- -----------
$4,000,000 FIRSTMERIT BANK, N.A.
By: /s/ Edward Yannayon
------------------------------------
Title: Vice President
---------------------------------
106 S. Main Street
Akron, Ohio 44308
Attention: Ed Yannayon
Telephone: (330) 996-6044
FAX: (330) 996-6272
62
68
Commitments
$4,000,000 THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
-------------------------------------
Peter L. Chinnici
Title: Senior Vice President & Group Head
-----------------------------------
63
69
Commitments
- -----------
$2,666,667 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
DETROIT 7-3403 547855
64
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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 0.85% 1.05% 1.25% 1.55% 1.85%
of Credit Applicable Margin
- ---------------------------- -------------- ------------------ ------------------ ----------------- ----------------
Floating Rate Applicable 0.0% 0.0% 0.0% 0.125% 0.50%
Margin
============================ ============== ================== ================== ================= ================
Facility Fee Applicable 0.15% 0.20% 0.25% 0.325% 0.40%
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 II 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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72
EXHIBIT A
FORM OF OPINION
[To be replaced by opinion issued at closing]
The Agent and the Lenders who are
parties to the 364-Day 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 364-Day Credit Agreement dated as of September 15, 2000 (the "Agreement")
among the Borrower, the Lenders named therein, and Bank One, Michigan, as Agent,
and providing for Borrowings 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
73
(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.
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 Lenders and their
participants, assignees and other transferees.
Very truly yours,
74
EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
364-Day Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
364-Day 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") and lenders party thereto and Bank One,
Michigan, as Agent for the Lenders. 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
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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 364-Day 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 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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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 the 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 the 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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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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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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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 364-Day Credit Agreement
Described Below.
Re: 364-Day 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 Lenders party thereto 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. Unless earlier payment is required under 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 364-Day 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 lenders party thereto
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
- ----------------------------------------------------------------------------------------------------------------
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SCHEDULE 1
SUBSIDIARIES AND OTHER INVESTMENTS
(See Sections 5.8 and 6.13)
Investment Jurisdiction of Owned Amount of Percent
In Organization By Investment Ownership
- ---------------------------------------------------------------------------------------------------------------------
88
SCHEDULE 2
INDEBTEDNESS AND LIENS
(See Sections 5.14, 6.10 and 6.14)
Maturity
Indebtedness Indebtedness Property and Amount
Incurred By Owed To Encumbered (If Any) of Indebtedness
- ----------------------------------------------------------------------------------------------------------------