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EXHIBIT 10.1
AMENDMENT #8 TO VANSTAR CORPORATION
SECOND AMENDED AND RESTATED FINANCING PROGRAM AGREEMENT
This Amendment to Vanstar Corporation Second Amended and Restated Financing
Program Agreement (this "Amendment") is made as of December 11, 1997 by and
between Vanstar Corporation, a Delaware corporation ("Borrower") and IBM Credit
Corporation, a Delaware Corporation ("IBM Credit").
RECITALS
A. Borrower and IBM Credit have entered into that certain Vanstar
Corporation Second Amended and Restated Financing Program Agreement dated as of
April 30, 1995 (as amended by Amendment #1 dated as of September 15, 1995,
Amendment #2 dated as of October 26, 1995, Amendment #3 dated as of November
10, 1995, Acknowledgement, Waiver and Amendment dated as of April 17, 1996,
Amendment #4 dated as of July 24, 1996, Amendment #5 dated as of September 25,
1996, Amendment #6 dated as of December 20, 1996, Amendment #7 dated as of
October 31, 1997 and as the same may be further amended, supplemented or as
otherwise modified from time to time, the "Agreement").
B. Vanstar Federal, Inc. ("VFI") is a Subsidiary of Vanstar Corporation
("Vanstar") and Vanstar and/or VFI intends to purchase Products for VFI from
Authorized Suppliers.
C. Vanstar has requested that IBM Credit finance Vanstar's purchase of
such Products for VFI and VFI's working capital requirements.
D. Vanstar, VFI and IBM Credit believe its in their best interest to
make VFI a party to the Agreement as an additional Borrower thereunder.
E. IBM Credit is willing to provide such financing to VFI subject to the
terms and conditions of the Agreement as herein amended.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Vanstar, VFI and IBM Credit hereby agree is follows:
Section 1. All capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement.
Section 2. Modification of Agreement
A. The following provisions are incorporated into and supplement the
Agreement as if fully set forth as additional terms therein. In the event of
conflict between the terms of this Amendment and the terms of the Agreement,
the terms of this Amendment will control in determining the agreement between
IBM Credit, Vanstar and VFI.
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(a) Parties to the Agreement.
VFI is hereby made a party to this Agreement, and all references to
"Borrower" in this Agreement shall be deemed to be references to VFI and
Vanstar Corporation (the "Original Borrower") acting jointly and severally
unless otherwise specified herein. Vanstar and VFI each hereby expressly
assumes all Obligations of Original Borrower under the Agreement, including
without limitation all obligations regarding fees and other amounts payable to
IBM Credit in connection with the Agreement. Vanstar hereby affirms all
representations, warranties and Obligations of Original Borrower in this
Agreement (except for those relating specifically to Vanstar and those limited
by their terms to the date given or another specific date) and Vanstar and VFI
agree that VFI shall be deemed to have made identical representations and
warranties hereunder. Vanstar and VFI shall be jointly and severally
responsible and liable for all Obligations, representations and warranties
under this Agreement, as amended hereby.
(b) Security.
In furtherance of the foregoing and not as a limitation, (a) to secure all
of Borrower's current and future debts to IBM Credit, whether now or hereafter
existing, due or to become due, direct or indirect, joint or several, or
absolute or contingent, Vanstar reaffirms the security interest granted to IBM
Credit in the Agreement and VFI hereby assigns and grants to IBM Credit a
security interest in all of its right, title and interest whether now owned or
hereafter acquired or existing in, to and under (i) (A) all inventory located
in the United States and its possessions in which the Uniform Commercial Code
has been adopted which bears the trademark or trade-name of International
Business Machines ("IBM"), (B) all inventory which is an individual item sold
by IBM to Borrower located in the United States and it possessions in which the
Uniform Commercial Code has been adopted and (C) all equipment located in the
United States and its possessions in which the Uniform Commercial Code has been
adopted, and in each case, all parts thereof, attachments and accessions
thereto, products thereof and documents therefor; (ii) all rebates, discounts,
credits and incentive payments that are or may become due to Borrower with
respect to any and all inventory or equipment as to which a security interest
has been granted in clause (i) above; and (iii) all substitutions and
replacements for all of the foregoing and all proceeds and insurance proceeds
of all the foregoing).
(b) In addition to the security interest created by paragraph (a) above,
to secure further the payment and performance of all Borrower's Obligations,
Vanstar reaffirms the security interest granted to IBM Credit in the Agreement
and VFI hereby assigns, pledges and grants to IBM Credit a security interest
in, all of its right, title and interest in and to, whether now owned or
hereafter acquired or existing (i) all inventory located in the United States
and its possessions in which the Uniform Commercial Code has been adopted that
(A) does not bear the trademark or trade-name of IBM or (b) is not an
individual item of inventory sold by IBM to Borrower and in each case, all
parts thereof, attachments and accessions thereto, products thereof and
documents therefor); (ii) all accounts (as such term is defined in the Uniform
Commercial Code in effect in the state of California from time to time);
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(iii) all rights in and to all contracts securing or otherwise relating to an
Account; (iv) general intangibles, and all rights in and to all contracts
securing or otherwise relating to any of the same, excluding franchise
agreements and equity securities of Dealers; (v) all rebates, discounts, credits
and incentive payments that are or may become due to Borrower with respect to
any and all inventory as to which a security interest has been granted in
clause (i) above; (vi) all equipment located in the United States and its
possessions in which the Uniform Commercial Code has been adopted that (A) does
not bear the trademark or trade-name of IBM or (B) is not an individual item of
equipment sold by IBM to Borrower and in each case, all parts thereof,
attachments an accessions thereto, products thereof and documents therefor;
(vii) all instruments, excluding equity securities of Dealers and securities of
entities not incorporated under the laws of any state of the United States,
documents, deposit accounts and chattel paper (as such items are defined in the
Uniform Commercial Code in effect in California from time to time); (viii) all
books, correspondence, credit files, records invoices and other papers,
including all tapes, cards, computer runs and other papers and documents in the
possession or under the control of Borrower relating to the foregoing
collateral referred to in clauses (i) through (vii); and (ix) all substitutions
and replacements for the foregoing and all proceeds and insurance proceeds of
all of the foregoing (all of the foregoing described in 2 A. b) (a) and (b) and
all other property of Borrower in which Borrower may hereafter grant a security
interest to IBM Credit being "Collateral").
Vanstar and VFI covenant with IBM Credit that: (a) the security interest
granted pursuant to the Agreement and this Amendment No. 8 is in addition to
any other security from time to time held by IBM Credit and (b) the security
interest hereby created is a continuing security interest and will cover and
secure the payment of all Obligations both present and future of Borrower to
IBM Credit.
(c) Acknowledgement.
Subject to the terms and conditions set forth herein, VFI acknowledges
and agrees to all terms and conditions of the Agreement, as the same may be
modified hereby, and shall be bound by such terms and conditions as if VFI were
an original signatory hereto and had executed this Agreement as of the date of
this Agreement.
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(d) Joint and Several Guaranty.
(A) Each Borrower hereby jointly and severally guarantees to IBM Credit
the prompt payment when due and the full, prompt, and faithful performance of
any and all Obligations upon which the other Borrower is in any manner
obligated, heretofore, now, or hereafter owned, contracted or acquired by IBM
Credit, whether the same are individual, joint or several, primary, secondary,
direct, contingent or otherwise. Each Borrower irrevocably waives any and all
rights to which it may be entitled, by operation of law or otherwise, upon
making any payment hereunder (i) to be subrogated to the rights of IBM Credit
against the other Borrower hereto with respect to such payment, in each such
case, until such time as all Obligations have been paid in full or otherwise to
be reimbursed, indemnified or exonerated by the other Borrower in respect
thereof, or (ii) to receive any payment, in the nature of contribution or for
any other reason, from the other Borrower hereto with respect to such payment.
(B) Notwithstanding any provision herein to the contrary, the liability
of each Borrower hereunder, shall in no event exceed the maximum amount that is
valid and enforceable in any action or proceeding involving any applicable
state corporate law or any applicable state or federal bankruptcy, insolvency,
reorganization, fraudulent conveyance or other law involving the rights of
creditors generally.
(C) The liability of each Borrower hereunder is direct and unconditional
and shall not be affected by any extension, renewal or other change in the
terms of payment or performance thereof, or the release, settlement or
compromise of or with any party liable for the payment or performance thereof,
the release or nonperfection of any security thereunder, or any change in the
other Borrower's financial condition. Each Borrower's obligation pursuant to
this section shall continue for so long as any sums owing to IBM Credit by any
Borrower remains outstanding and unpaid, unless terminated in the manner
provided herein. Each Borrower acknowledges that its obligations hereunder are
in addition to and independent of any agreement or transaction between IBM
Credit and the other Borrower or any other person creating or reserving any
lien, encumbrance or security interest in any property of the other Borrower's
or any other person as security for any obligation of such Borrower.
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(D) Each Borrower has made an independent investigation of the financial
condition of the other Borrower and guarantees the Obligations based on that
investigation and not upon any representations made by IBM Credit. Each
Borrower acknowledges that it has access to current and future Borrower
financial information which will enable each Borrower to continuously remain
informed of the other Borrower's financial condition. Each Borrower also
consents to and agrees that the Obligations shall not be affected by IBM
Credit's subsequent increases or decreases in the credit line that IBM credit
may grant to the other Borrower; substitutions, exchanges or releases of all or
any part of the Collateral now or hereafter securing any of the Obligations;
sales or other dispositions of any or all of the Collateral now or hereafter
securing any of the Obligations; realizing on the Collateral to the extent IBM
Credit, in its sole discretion deem proper.
(E) Each Borrower waives to the extent permitted by applicable law (1)
demand, protest and all notices of protest or dishonor, (2) all notices of
payment and nonpayment, (3) all notices required by law, and (4) all notices of
nonpayment at maturity, release, compromise, settlement, extension or renewal
of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guarantees at any time held by IBM Credit on
which the other Borrower may, in any way, be liable and each Borrower hereby
ratifies and confirms whatever IBM Credit may do in that regard.
(F) This guaranty obligation and any and all obligations, liabilities,
terms and provisions herein shall survive any and all bankruptcy or insolvency
proceedings, actions and/or claims brought by or against any Borrower, whether
such proceedings, actions and/or claims are federal and/or state.
(G) The Obligations are joint and several, shall be binding upon each
Borrower and each Borrower's respective successors and assigns, and will be for
IBM Credit's benefit and the benefit of IBM Credit's successors and assigns.
The Obligations and any terms or provisions herein may be modified or amended
only by a document signed by both IBM Credit and Borrower.
(e) Ownership of VFI.
Vanstar shall at all times own directly or indirectly One Hundred Percent
(100%) of the outstanding stock of VFI, except that VFI may be merged into
Vanstar or a wholly owned subsidiary of Vanstar that is a Guarantor Subsidiary
or upon such merger becomes a Guarantor Subsidiary.
C. Section 2(B)(viii) of the Agreement is hereby amended by deleting
this Section in its entirety and substituting, in lieu thereof, the following:
"(viii) on each Friday, a report setting forth for and as of the end of
the immediately preceding Thursday a summary of all of Borrower's and the
Guarantor Subsidiaries' Excess Eligible Inventory (as hereinafter defined),
inventory referred to in Section 3(d)(ix) and IBM Product Inventory, in form
and substance satisfactory to IBM Credit, including for each model or product
(1) the quantity of products unsold, (2) the type, model and version of each
model or product, (3) the quantity of
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each model or product unsold, (4) the extended cost of all such unsold models
and products and (5) the amount of any obligations owing to the parties who
manufactured or sold the Excess Eligible Inventory to Borrower. Borrower shall
not reduce the amount of obligations owing by any payments made to these parties
by Borrower via a check until such time as the check clears Borrower's
account."
B. Section 3(d) of the Agreement is hereby amended by inserting
immediately following the second sentence of the third paragraph thereof, the
following additional sentence: "Notwithstanding any other provision of this
Agreement, assets that are owned by VFI shall constitute no more than One
Hundred Million Dollars ($100,000,000) of Value."
C. Section 19 of the Agreement is hereby amended by deleting clause (ii)
of the definition of "Eligible Receivables" in its entirety and substituting,
in lieu thereof, the following clause (ii):
"(A) accounts (other than accounts created from the sale of goods and
services to a Governmental Authority (as hereinafter defined in clause (viii)
of this definition) and accounts represented by Borrower's "08 invoices" (in
accordance with Borrower's invoicing practices in effect on and prior to the
date hereof)) unpaid more than ninety (90) days from the date of invoice and
(B) accounts created from the sale of goods and services to a Governmental
Authority or represented by Borrower's "08 invoices" (in accordance with
Borrower's invoicing practices in effect on and prior to the date hereof)
unpaid more than one hundred twenty (120) days from the date of invoice;"
D. Section 19 of the Agreement is hereby amended by deleting clause
(viii) of the definition of "Eligible Receivables" in its entirety and
substituting, in lieu thereof, the following clause (viii):
"(viii) accounts with respect to which the obligor is the United States or
any agency, instrumentality or political subdivision thereof ("Governmental
Authority") (1) if such accounts (A) may not be assigned under the Assignment
of Claims Act of 1940 (31 U.S.C. Section 3727 and 41 U.S.C. Section 15), (B)
arise from a written contract between Borrower and the Governmental Authority
obligor where the original amount of such written contract is equal to or
greater than $50,000 unless such written contract has, to IBM Credit's
satisfaction, been assigned to IBM Credit under the Assignment and Claims Act
of 1990, (C) arise from a written contract which prohibits assignment of amounts
payable thereunder to a third party, or (D) have been assigned in full, or in
part, to any party other than IBM Credit unless such assignment has been
terminated in form and substance satisfactory to IBM Credit or (2) if (A) IBM
Credit is not a "financing institution" within the meaning of such Act, (B) all
assignments and notices that are required to be given under the Act shall not
have been made and received, and (C) the Assignment of Claims Act of 1940 has
not been complied with in all other applicable respects;"
E. The Agreement is hereby modified by deleting Schedule 2 and 3 in
their entirety and substituting in lieu thereof, the Schedule 2 and 3 attached
hereto.
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Section 3. Representations and Warranties. Vanstar and VFI each make to IBM
Credit the following representations and warranties all of which are material
and are made to induce IBM Credit to enter into this Amendment.
Section 3.1 Accuracy and Completeness of Warranties and Representations. All
representations made by Original Borrower in the Agreement were true and
accurate and complete in every respect as of the date made, and, as amended by
this Amendment, all representations made by each of Vanstar and VFI in the
Agreement are true, accurate and complete in every material respect as of the
date hereof, and do not fail to disclose any material fact necessary to make
representations not misleading.
Section 3.2 Violation of Other Agreements. The execution and delivery of this
Amendment and the performance and observance of the covenants to be performed
and observed hereunder do not violate or cause either of Vanstar and VFI not to
be in compliance with the terms of any agreement to which Vanstar and VFI each
is a party.
Section 3.3 Litigation. There is no litigation, proceeding, investigation or
labor dispute pending or threatened against either Vanstar or VFI, which if
adversely determined, would materially adversely affect either of Vanstar's or
VFI's ability to perform its obligations under the Agreement and the other
documents, instruments and agreements executed in connection therewith or
pursuant hereto.
Section 3.4 Enforceability of Amendment. This Amendment has been duly
authorized, executed and delivered by Vanstar and VFI and is enforceable
against Vanstar and VFI in accordance with its terms.
Section 4. Ratification of Agreement. Except as specifically amended hereby,
all of the provisions of the Agreement shall remain unamended and in full force
and effect. Vanstar and VFI each hereby, ratify, confirm and agree that the
Agreement, as amended hereby, represents a valid and enforceable obligation of
each of Vanstar and VFI, and is not subject to any claims, offsets or defense.
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Section 5. Governing Law. This Amendment shall be governed by and interpreted
in accordance with the laws of the State of California.
Section 6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed by the authorized
officers of the undersigned as of the day and year first above written.
VANSTAR FEDERAL, INC. VANSTAR CORPORATION
B: /s/ X.X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Senior Vice President Title: Treasurer
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/s/ Xxxxx XxXxxx /s/ X.X. Xxxxxxxxx
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Assistant Secretary Secretary
Accepted and Agreed:
IBM CREDIT CORPORATION
By: /s/ Xxxxxx Xxxxx
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Title: /s/ Director Global Credit
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Remarketer Financing
