AMENDED AND RESTATED CREDIT AGREEMENT
dated as of December 31, 1997
among
MICRO WAREHOUSE, INC.
THE SUBSIDIARIES OF MICRO WAREHOUSE, INC.
THE LENDERS SIGNATORY HERETO
and
THE CHASE MANHATTAN BANK
as Administrative Agent
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS......................................2
Section 1.01. Definitions...............................................2
Section 1.02. Accounting Terms.........................................17
ARTICLE 2. THE CREDIT........................................................17
Section 2.01. Revolving Credit Loans...................................17
Section 2.02. The Revolving Credit Notes...............................18
Section 2.03. Purpose..................................................18
Section 2.04. Borrowing Procedures.....................................18
Section 2.05. Prepayments and Conversions..............................18
Section 2.06. Interest Periods; Renewals...............................19
Section 2.07. Changes of Revolving Credit Commitments..................20
Section 2.08. Certain Notices..........................................20
Section 2.09. Minimum Amounts..........................................20
Section 2.10. Interest.................................................21
Section 2.11. Fees.....................................................21
Section 2.12. Payments Generally.......................................22
Section 2.13. Novation.................................................22
ARTICLE 3. THE LETTERS OF CREDIT.............................................23
Section 3.01. Letters of Credit........................................23
Section 3.02. Purposes.................................................23
Section 3.03. Procedures for Issuance of Letters of Credit.............23
Section 3.04. Participating Interests..................................23
Section 3.05. Payments.................................................24
Section 3.06. Further Assurances.......................................25
Section 3.07. Obligations Absolute.....................................25
Section 3.08. Cash Collateral Account..................................25
Section 3.09. Letter of Credit Fees....................................26
ARTICLE 4. YIELD PROTECTION; ILLEGALITY; ETC.................................26
Section 4.01. Additional Costs.........................................26
Section 4.02. Limitation on Eurocurrency Loans.........................28
Section 4.03. Illegality...............................................28
Section 4.04. Certain Conversions pursuant to Sections 4.01
and 4.03.................................................29
Section 4.05. Certain Compensation.....................................30
Section 4.06. Taxes....................................................30
ARTICLE 5. CONDITIONS PRECEDENT..............................................32
Section 5.01. Documentary Conditions Precedent.........................32
Section 5.02. Additional Conditions Precedent..........................33
Section 5.03. Deemed Representations...................................33
i
ARTICLE 6. REPRESENTATIONS AND WARRANTIES....................................33
Section 6.01. Incorporation, Good Standing and Due Qualification.......33
Section 6.02. Corporate Power and Authority; No Conflicts..............33
Section 6.03. Legally Enforceable Agreements...........................34
Section 6.04. Litigation...............................................34
Section 6.05. Financial Statements.....................................34
Section 6.06. Ownership and Liens......................................35
Section 6.07. Taxes....................................................35
Section 6.08. ERISA....................................................35
Section 6.09. Consolidated Entities and Affiliates.....................36
Section 6.10. Credit Arrangements......................................36
Section 6.11. Operation of Business....................................36
Section 6.12. Hazardous Materials......................................36
Section 6.13. No Default on Outstanding Judgments or Orders............37
Section 6.14. No Defaults on Other Agreements..........................37
Section 6.15. Labor Disputes and Acts of God...........................37
Section 6.16. Governmental Regulation..................................37
Section 6.17. No Forfeiture............................................37
Section 6.18. Solvency.................................................37
ARTICLE 7. AFFIRMATIVE COVENANTS.............................................38
Section 7.01. Maintenance of Existence.................................38
Section 7.02. Conduct of Business......................................38
Section 7.03. Maintenance of Properties................................38
Section 7.04. Maintenance of Records...................................38
Section 7.05. Maintenance of Insurance.................................39
Section 7.06. Compliance with Laws.....................................39
Section 7.07. Right of Inspection......................................39
Section 7.08. Reporting Requirements...................................39
Section 7.09. Additional Subsidiary Guarantors.........................43
ARTICLE 8. NEGATIVE COVENANTS................................................43
Section 8.01. Debt.....................................................43
Section 8.02. Guaranties...............................................44
Section 8.03. Liens....................................................44
Section 8.04. Leases...................................................45
Section 8.05. Investments..............................................46
Section 8.06. Distributions............................................46
Section 8.07. Sale of Assets...........................................47
Section 8.08. Subsidiary Capital Stock.................................47
Section 8.09. Transactions with Affiliates.............................47
Section 8.10. Mergers, Etc.............................................47
Section 8.11. Acquisitions.............................................48
Section 8.12. No Activities Leading to Forfeiture......................48
ii
Section 8.13. Capital Expenditures.....................................48
Section 8.14. Restrictions.............................................48
Section 8.15. Fiscal Year..............................................48
ARTICLE 9. FINANCIAL COVENANTS...............................................48
Section 9.01. Interest Coverage Ratio..................................49
Section 9.02. Minimum Tangible Net Worth...............................49
Section 9.03. Leverage Ratio...........................................49
Section 9.04. Current Ratio............................................49
Section 9.05. Domestic Net Worth.......................................49
ARTICLE 10. EVENTS OF DEFAULT................................................49
Section 10.01. Events of Default.......................................49
ARTICLE 11. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS.......................52
Section 11.01. Guarantied Obligations..................................52
Section 11.02. Performance Under This Agreement........................52
Section 11.03. Waivers.................................................52
Section 11.04. Releases................................................54
Section 11.05. Marshaling..............................................54
Section 11.06. Liability...............................................55
Section 11.07. Unconditional Obligation................................55
Section 11.08. Election to Perform Obligations.........................55
Section 11.09. No Election.............................................55
Section 11.10. Severability............................................56
Section 11.11. Other Enforcement Rights................................56
Section 11.12. Delay or Omission; No Waiver............................56
Section 11.13. Restoration of Rights and Remedies......................56
Section 11.14. Cumulative Remedies.....................................57
Section 11.15. Survival................................................57
Section 11.16. No Setoff, Counterclaim or Withholding; Gross-Up........57
Section 11.17. Payment in Applicable Currency..........................57
ARTICLE 12. THE ADMINISTRATIVE AGENT.........................................57
Section 12.01. Appointment, Powers and Immunities of
Administrative Agent....................................57
Section 12.02. Reliance by Administrative Agent........................58
Section 12.03. Defaults................................................58
Section 12.04. Rights of Administrative Agent as a Lender..............59
Section 12.05. Indemnification of Administrative Agent.................59
Section 12.06. Documents...............................................60
Section 12.07. Non-Reliance on Administrative Agent and Other
Lenders.................................................60
Section 12.08. Failure of Administrative Agent to Act..................60
Section 12.09. Resignation or Removal of Administrative Agent..........60
iii
Section 12.10. Amendments Concerning Agency Function...................61
Section 12.11. Liability of Administrative Agent.......................61
Section 12.12. Transfer of Agency Function.............................61
Section 12.13. Non-Receipt of Funds by the Administrative Agent........61
Section 12.14. Withholding Taxes.......................................62
Section 12.15. Several Obligations and Rights of Lenders...............62
Section 12.16. Pro Rata Treatment of Revolving Credit Loans, Etc.......62
Section 12.17. Sharing of Payments Among Lenders.......................63
ARTICLE 13. MISCELLANEOUS.....................................................63
Section 13.01. Amendments and Waivers..................................63
Section 13.02. Usury...................................................64
Section 13.03. Expenses................................................64
Section 13.04. Survival................................................65
Section 13.05. Assignment; Participations..............................65
Section 13.06. Notices.................................................66
Section 13.07. Setoff..................................................66
SECTION 13.08. JURISDICTION; IMMUNITIES......................................66
Section 13.09. Table of Contents; Headings.............................68
Section 13.10. Severability............................................68
Section 13.11. Counterparts............................................68
Section 13.12. Integration.............................................68
Section 13.13. Governing Law...........................................68
Section 13.14. Confidentiality.........................................68
Section 13.15. Treatment of Certain Information........................69
Section 13.16. Judgment Currency.......................................69
iv
v
vi
vii
EXHIBITS
Exhibit A Opinion of Outside Counsel to the
Consolidated Entities
SCHEDULES
Schedule I Revolving Credit Commitments
Schedule II Consolidated Entities and Affiliates
Schedule III Credit Arrangements
viii
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 31, 1997 among
MICRO WAREHOUSE, INC., a corporation organized under the laws of Delaware
("Micro Warehouse"); each of the Subsidiaries of Micro Warehouse which is a
signatory hereto as a "Subsidiary Borrower" (individually a "Subsidiary
Borrower" and collectively the "Subsidiary Borrowers" and, together with Micro
Warehouse, the "Borrowers"); each of the other Subsidiaries of Micro Warehouse
which is a signatory hereto as a "Subsidiary Guarantor" or which shall become a
party hereto as a "Subsidiary Guarantor" from time to time (individually a
"Subsidiary Guarantor" and collectively the "Subsidiary Guarantors" and,
together with the Borrowers, the "Obligors"); each of the financial institutions
which is a signatory hereto as a "Lender" or which shall become a party hereto
as a "Lender" from time to time (individually a "Lender" and collectively the
"Lenders"); and THE CHASE MANHATTAN BANK, a bank organized under the laws of New
York, as agent for the Lenders (in such capacity, together with its successors
in such capacity, the "Administrative Agent").
WHEREAS, Micro Warehouse, the Subsidiary Borrowers (other than Micro
Warehouse Limited), the Subsidiary Guarantors, the Lenders and the
Administrative Agent have entered into that certain Credit Agreement dated as of
July 25, 1995 (as amended, the "Existing Credit Agreement") pursuant to which
the Lenders have extended credit to the Obligors evidenced by certain Revolving
Credit Notes issued by the respective Borrower (other than Micro Warehouse
Limited) and guarantied by the other Borrowers (other than Micro Warehouse
Limited) and the Subsidiary Guarantors;
WHEREAS, Micro Warehouse Limited acquired the entire business and
undertaking of the company of that name ("the Old MWL") which is party to the
Existing Credit Agreement. Micro Warehouse Limited wishes to step into the
position of the Old MWL and be treated in all respects as if it had by a
novation replaced the Old MWL as party to the Existing Credit Agreement.
WHEREAS, Micro Warehouse, the Subsidiary Borrowers, the Subsidiary
Guarantors, the Lenders and the Administrative Agent have agreed to enter into
this Agreement to amend and restate the Existing Credit Agreement to provide
for, among other things, an extension of the Revolving Credit Termination Date,
an automatic reduction in the Revolving Credit Commitments and modifications of
certain covenants and definitions contained therein; and
WHEREAS, the Obligors have requested that the Lenders make loans to the
respective Borrower, the repayment of which will be guarantied by the other
Borrowers and the Subsidiary Guarantors; each Obligor will receive direct
economic and financial benefits from the Debt incurred under this Agreement and
the incurrence of such Debt is in the best interests of such Obligor; and each
Obligor acknowledges that the Lenders would not provide the financing hereunder
but for the joint and several obligations of such Obligor hereunder with respect
hereto.
1
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.1. Definitions. As used in this Agreement the following terms
have the following meanings (terms defined in the singular to have a correlative
meaning when used in the plural and vice versa):
"Acceptable Acquisition" means any Acquisition which meets all of the
following conditions: (a) the aggregate consideration paid for such Acquisition
and for all prior Acquisitions during the same Fiscal Year does not exceed
$50,000,000; (b) such Acquisition has been approved in good faith by the Board
of Directors of the Person making the Acquisition; (c) no Default or Event of
Default exists or would exist after giving effect to such Acquisition; and (d)
after reviewing historical financial statements of the business being acquired
and considering the pro forma position of the Consolidated Entities subsequent
to such Acquisition, Micro Warehouse believes in good faith that the
Consolidated Entities will continue to be in compliance with the financial
covenants contained in Article 9 on a pro forma basis.
"Acquisition" means any transaction pursuant to which any Consolidated
Entity (a) acquires equity securities (or warrants, options or other rights to
acquire such securities) of any Person, (b) causes or permits any Person to be
merged into such Consolidated Entity, in any case pursuant to a merger, purchase
of assets or any reorganization providing for the delivery or issuance to the
holders of such Person's then outstanding securities, in exchange for such
securities, of cash or securities of any Consolidated Entity, or a combination
thereof, or (c) purchases all or substantially all of the business or assets of
any Person.
"Additional Costs" shall have the meaning assigned to such term in Section
4.01 hereof.
"Affiliate" means any Person: (a) which directly or indirectly controls,
or is controlled by, or is under common control with, any Consolidated Entity;
(b) which directly or indirectly beneficially owns or holds 5% or more of any
class of voting stock of any Consolidated Entity; (c) 5% or more of the voting
stock of which is directly or indirectly beneficially owned or held by any
Consolidated Entity; or (d) which is a partnership in which any Consolidated
Entity is a general partner. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Administrative Agent" shall have the meaning assigned to such term in the
introductory paragraph hereof.
2
"Agreement" means this Credit Agreement, as amended or supplemented from
time to time. References to Articles, Sections, Exhibits, Schedules and the like
refer to the Articles, Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise indicated.
"Alternative Currency" means any currency other than Dollars which is
commonly dealt with in the London interbank market and is freely transferable
and convertible into Dollars.
"Alternative Currency Equivalent" means, with respect to an amount of
Dollars on any date in relation to any specified Alternative Currency, the
amount of such specified Alternative Currency that may be purchased with such
amount of Dollars at the Spot Exchange Rate with respect to Dollars on such
date.
"Assumption Agreements" means each of the Assumption Agreements in the
form of Exhibit E to the Existing Credit Agreement delivered under Section 7.09
hereof.
"Banking Day" means any day on which commercial banks are not authorized
or required to close in New York, New York and whenever such day relates to a
Eurocurrency Loan or notice with respect to any Eurocurrency Loan, a day on
which dealings in Dollar or the applicable Alternative Currency deposits are
also carried out in the London interbank market.
"Borrowers" shall have the meaning assigned to such term in the
introductory paragraph hereof.
"Capital Expenditures" means, with respect to any Person, any expenditures
made by such Person to acquire or construct fixed assets, plant and equipment
(including renewals, improvements, replacements and incurrence of obligations
under Capital Leases, but excluding repairs and Acquisitions).
"Capital Lease" means any lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP.
"Closing Date" means the date upon which the initial borrowing or initial
issuance of a Letter of Credit hereunder occurs.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment Percentage" means, as to any Lender at any date of
determination thereof, the percentage of the aggregate Revolving Credit
Commitments constituted by such Lender's Revolving Credit Commitments at such
date.
3
"Compliance Certificate" means the compliance certificate in the form of
Exhibit B2 to the Existing Credit Agreement to be delivered by Micro Warehouse
under the terms of this Agreement.
"Consolidated Capital Expenditures" means, with respect to any fiscal
period, the aggregate amount of Capital Expenditures of the Consolidated
Entities for such period, as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Current Assets" means, at any date of determination thereof,
all assets of the Consolidated Entities treated as current assets, as determined
on a consolidated basis in accordance with GAAP.
"Consolidated Current Liabilities" means, at any date of determination
thereof, all liabilities of the Consolidated Entities treated as current
liabilities, as determined on a consolidated basis in accordance with GAAP.
"Consolidated Debt" means, at any date of determination thereof, the
aggregate amount of Debt of the Consolidated Entities, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated EBIT" means, with respect to any fiscal period, the sum of
(a) Consolidated Net Income for such period, plus (b) the aggregate amount of
(i) income taxes, (ii) Consolidated Interest Expense, (iii) non-cash charges
taken in the Fiscal Quarter ending on December 31, 1997 arising from the
implementation of the Restructuring Plan not to exceed $53,000,000 and (iv)
non-cash charges arising from any resolution of the action of certain
stockholders pending against Micro Warehouse arising out of the stock merger
between Micro Warehouse and Inmac Corp., to the extent that such aggregate
amount was deducted in the computation of Consolidated Net Income for such
period.
"Consolidated Entity" means Micro Warehouse or any Subsidiary of Micro
Warehouse whose accounts are or are required to be consolidated with the
accounts of Micro Warehouse in accordance with GAAP.
"Consolidated Intangible Assets" means, at any date of determination
thereof, all assets of the Consolidated Entities which would be classified as
intangibles under GAAP but in any event including, without limitation,
unamortized debt discount and expense, unamortized acquisition, organization and
reorganization expense, patents, copyrights, trademarks, trade names,
franchises, goodwill and other similar intangible assets.
"Consolidated Interest Expense" means, with respect to any fiscal period,
the amount of interest accrued on, and with respect to, Consolidated Debt
(including, without limitation, amortization of debt discount and imputed
interest on Capital Leases) plus all finance charges, premiums and other fees,
charges and expenses
4
extracted in exchange for the forbearance from the collection of money during
such period, as determined on a consolidated basis in accordance with GAAP.
"Consolidated Liabilities" means, at any date of determination thereof,
all liabilities of the Consolidated Entities (other than (a) the litigation
settlement accrual arising from the proposed settlements of the consolidated
securities class action lawsuit arising out of Micro Warehouse's announcements
in September and October 1996 that it intended to restate certain financial
statements covering the 1992 through 1995 Fiscal Years not to exceed $9,000,000
and (b) the non-cash portion of the litigation settlement accrual arising from
any resolution of the action of certain stockholders pending against Micro
Warehouse arising out of the stock merger between Micro Warehouse and Inmac
Corp.), as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any fiscal period, net
income for the Consolidated Entities for such fiscal period, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Worth" means, at any date of determination thereof, all
amounts which would be included under stockholders' equity on a consolidated
balance sheet of the Consolidated Entities, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Subordinated Debt" means, at any date of determination
thereof, all Debt of the Consolidated Entities which is subordinated to all
obligations owed to the Required Lenders on terms and conditions acceptable to
the Lenders, as determined on a consolidated basis in accordance with GAAP.
"Consolidated Tangible Net Worth" means, at any date of determination
thereof, the result of (a) Consolidated Net Worth minus (b) Consolidated
Intangible Assets.
"Currency Protection Agreement" means, with respect to any Person, any
foreign exchange contract, currency swap agreement or other financial agreement
or arrangement between one or more Lenders and a Consolidated Entity designed to
protect against fluctuations in currency values.
"Current Ratio" means, at any date of determination thereof, the ratio of
(a) Consolidated Current Assets to (b) Consolidated Current Liabilities.
"Customer" means the account debtor with respect to any of the Receivables
and/or the purchaser of goods, services or both with respect to any contract or
contract right, and/or any Person who enters into any contract or other
arrangement with any Borrower, pursuant to which such Borrower is to deliver any
personal Property or perform any services.
5
"Debt" means, with respect to any Person: (a) indebtedness of such Person
for borrowed money; (b) indebtedness for the deferred purchase price of Property
or services (except trade payables and accrued expenses in the ordinary course
of business); (c) Unfunded Benefit Liabilities of such Person (if such Person is
not a Consolidated Entity, determined in a manner analogous to that of
determining Unfunded Benefit Liabilities of the Consolidated Entities); (d) the
face amount of any outstanding letters of credit issued for the account of such
Person; (e) obligations arising under acceptance facilities; (f) Guaranties of
such Person; (g) obligations secured by any Lien on Property of such Person; (h)
obligations of such Person as lessee under Capital Leases; (i) obligations of
such Person in respect of interest rate protection agreements, foreign currency
exchange agreements, commodity purchase or option agreements or other interest
or exchange rate or commodity price hedging arrangements; and (j) all capital
stock of such Person subject to repurchase or redemption other than at the sole
option of such Person.
"Debt to EBIT Ratio" means, at any date of determination thereof, the
ratio of (a) Consolidated Debt (exclusive of "Debt" included under clause (i) of
the definition thereof) to (b) Consolidated EBIT for the four most recently
ended Fiscal Quarters.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Revolving
Credit Loan and, to the extent permitted by law, any other amount payable by any
Obligor under this Agreement, any Revolving Credit Note or any other Facility
Document, that is not paid when due (whether at stated maturity, by acceleration
or otherwise), a rate per annum during the period from and including the due
date, to, but excluding the date on which such amount is paid in full equal to
four percent (4%) above the Variable Rate as in effect from time to time plus
the Interest Margin (if any); provided that, if the amount so in default is
principal of a Eurocurrency Loan and the due date thereof is a day other than
the last day of the Interest Period therefor, the "Default Rate" for such
principal shall be, for the period from and including the due date and to but
excluding the last day of the Interest Period therefor, two percent (2%) above
the interest rate for such Eurocurrency Loan as provided in Section 2.10 hereof
and, thereafter, the rate provided for above in this definition.
"Denomination Date" means, in relation to any borrowing, conversion or
renewal in an Alternative Currency, the date that is three Banking Days before
the date such borrowing, conversion or renewal is made.
"Distribution" means, with respect to any Person, the declaration or
payment of any dividends by such Person, or the purchase, redemption, retirement
or other acquisition for value of any of its capital stock now or hereafter
outstanding, or the making of any distribution of assets to its stockholders as
such whether in cash, assets or in obligations of such Person, or the allocation
or other setting apart of any sum for the payment of any dividend or
distribution on, or for the purchase,
6
redemption or retirement of any shares of its capital stock, or the making of
any other distribution by reduction of capital or otherwise in respect of any
shares of its capital stock, or the making of payments of interest on, or
payments or prepayments of principal of, or payments (or setting apart of money
for a sinking or other analogous fund) for the purchase,redemption, retirement
or other acquisition of principal or interest, on Consolidated Subordinated
Debt.
"Dollar Equivalent" means, with respect to an amount of any Alternative
Currency on any date, the amount of Dollars that may be purchased with such
amount of such Alternative Currency at the Spot Exchange Rate with respect to
such Alternative Currency on such date.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Domestic Cash Equivalents" means: (a) direct obligations of, or
obligations fully guarantied or insured by, the United States of America or any
agency or instrumentality thereof with maturities of one year or less from the
date of acquisition; (b) commercial paper of a domestic issuer rated at least
"A-1" by Standard & Poor's Corporation or "P-1" by Xxxxx'x Investors Service,
Inc.; (c) time deposits or certificates of deposit with maturities of one year
or less from the date of acquisition issued by any commercial bank operating
within the United States of America having capital and surplus in excess of
$100,000,000; and (d) money market or mutual funds whose sole investments are
comprised of investments permitted under the foregoing clauses (a) through (c).
"Domestic Net Worth" means, at any date of determination thereof, all
amounts which would be included under stockholders' equity on a combined balance
sheet of Micro Warehouse and the Domestic Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Domestic Obligations" means all Obligations of Micro Warehouse and the
Domestic Subsidiaries.
"Domestic Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Consolidated
Entities or any ERISA Affiliate and which is covered by Title IV of ERISA, other
than a Multiemployer Plan.
"Domestic Subsidiary" means a direct or indirect Subsidiary of Micro
Warehouse which is not a Foreign Subsidiary.
"Effective Date" shall have the meaning assigned to such term in Article
5.
"Environmental Laws" means any and all domestic, foreign, federal, state
and local statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees,
7
permits, licenses, agreements with Governmental Authorities or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants, or
industrial, toxic or hazardous substances or wastes into the environment
including, without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which any Consolidated Entity is a member, or (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which any Consolidated Entity is a member.
"Eurocurrency Loan" means any Revolving Credit Loan when and to the extent
the interest rate therefor is determined on the basis of the definition "Fixed
Base Rate."
"Event of Default" shall have the meaning assigned to such term in Section
10.01 hereof.
"Existing Credit Agreement" shall have the meaning assigned to such term
in the first recital hereto.
"Facility Documents" means this Agreement, the Revolving Credit Notes, the
Letters of Credit, each Assumption Agreement, each Interest Rate Protection
Agreement and each Currency Protection Agreement, as each may be amended or
supplemented from time to time.
"Federal Funds Rate" means, for any day, the rate per annum (expressed on
a 365/366 day basis of calculation, if the rate on Variable Rate Loans is so
calculated) equal to the weighted average of the rates on overnight federal
funds transactions as published by the Federal Reserve Lender of New York for
such day (or for any day that is not a Banking Day, for the immediately
preceding Banking Day).
"Fiscal Quarter" means any calendar quarter.
"Fiscal Year" means any calendar year.
"Fiscal Year Net Worth Increase Amounts" means, with respect to each
Fiscal Year, the sum of (a) the greater of (i) Zero Dollars ($0) and (ii) 50% of
Consolidated
8
Net Income for such Fiscal Year plus (b) 50% of the proceeds (net of
underwriting commissions and discounts and reasonable fees and expenses) from
the sale of capital stock of Micro Warehouse during such Fiscal Year.
"Fixed Base Rate" means with respect to any Interest Period for a
Eurocurrency Loan: the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of one percent (1%)) quoted at approximately 11:00 a.m. London time
by the principal London branch of the Reference Lender two Banking Days prior to
the first day of such Interest Period for the offering to leading banks in the
London interbank market of Dollar or Alternative Currency deposits in
immediately available funds, for a period, and in an amount, comparable to the
Interest Period and principal amount of the Eurocurrency Loan which shall be
made.
"Fixed Rate" means, for any Eurocurrency Loan for any Interest Period
therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of one percent (1%)) determined by the Administrative Agent to be equal to the
quotient of (i) the Fixed Base Rate for such Eurocurrency Loan for such Interest
Period, divided by (ii) one minus the Reserve Requirement for such Eurocurrency
Loan for such Interest Period.
"Foreign Cash Equivalents" means: (a) direct obligations of, or
obligations fully guarantied or insured by, the government of the country in
which any Foreign Subsidiary is incorporated or has its principal place of
business with maturities of one year or less from the date of acquisition; and
(b) direct demand obligations issued by the principal banking institutions
located in any such country.
"Foreign Plan" means any pension plan or other deferred compensation plan,
program or arrangement maintained by any Foreign Subsidiary which may or may
not, under applicable local law, be required to be funded through a trust or
other funding vehicle.
"Foreign Subsidiary" means each direct or indirect Subsidiary of Micro
Warehouse which was created or organized under the laws of a jurisdiction other
than the United States of America, any state thereof or the District of
Columbia.
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting any Consolidated Entity or any of its Affiliates before any
Governmental Authority, or the receipt of notice by any such party that any of
them is a suspect in or a target of any governmental inquiry or investigation,
which may result in an indictment of any of them or the seizure or forfeiture of
any of their respective Properties.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in Section
6.05 (except for material changes determined preferable by the Consolidated
Entities' independent public accountants).
9
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantied Obligations" shall have the meaning assigned to such term in
Section 11.01 hereof.
"Guarantor" shall have the meaning assigned to such term in Section 11.01
hereof.
"Guaranty" means, with respect to any Person, guaranties, endorsements
(other than for collection in the ordinary course of business) and other
contingent obligations of such Person with respect to the obligations of any
other Person (including, but not limited to, an agreement to purchase any
obligation, stock, assets, goods or services or to supply or advance any funds,
assets, goods or services, or an agreement to maintain or cause such Person to
maintain a minimum working capital or net worth or otherwise to assure the
creditors of any such other Person against loss).
"Hazardous Materials" means any and all pollutants, contaminants, toxic or
hazardous wastes or any other substances, the removal of which is required or
the generation, manufacture, refining, production, processing, treatment,
storage, handling, transportation, transfer, use, disposal, release, discharge,
spillage, seepage, or filtration of which is restricted, prohibited or penalized
by any applicable Environmental Law.
"Interest Coverage Ratio" means, at any date of determination thereof, the
ratio of (a) Consolidated EBIT for the most recently ended four Fiscal Quarters
to (b) Consolidated Interest Expense during such four Fiscal Quarters.
"Interest Margin" means, for each type of Revolving Credit Loan, the
percentage for such type of Revolving Credit Loan set forth below opposite the
range of the Debt to EBIT Ratio in the schedule below as determined as of the
last day of each Fiscal Quarter, with adjustments to become effective on the
date of receipt by the Administrative Agent of the most recent financial
statements of the Consolidated Entities required to be furnished to the Lenders
under Section 7.08:
Interest Margin
---------------
Debt to EBIT Ratio Variable Rate Eurocurrency
Loans Loans
(a) less than .75 to 1.00 0% .50%
(b) equal to or greater 0% .75%
10
than .75 to 1.00 and
less than 1.00 to 1.00
(c) equal to or greater 0% 1.00%
than 1.00 to 1.00 and
less than 2.00 to 1.00
(d) equal to or greater 0% 1.25%
than 2.00 to 1.00
"Interest Period" means: with respect to any Eurocurrency Loan, the period
commencing on the date such Eurocurrency Loan is made, is converted from a
Variable Rate Loan or an Eurocurrency Loan denominated in another currency or is
renewed, as the case may be, and ending, as any Borrower may select pursuant to
Section 2.06: on the numerically corresponding day in the first, second, third,
or sixth calendar month thereafter, provided that each such Interest Period
which commences on the last Banking Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Banking Day of the appropriate calendar
month.
"Interest Rate Protection Agreement" means an interest rate swap, cap or
collar agreement or similar arrangement between one or more Lenders and a
Consolidated Entity providing for the transfer or mitigation of interest risks
either generally or under specific contingencies.
"Investment" means any loan or advance to any Person or any purchase or
other acquisition of any capital stock, assets, obligations or other securities
of and Person, or any capital contribution to, investment in, or other
acquisition of any interest in, any Person.
"Issuing Lender" means The Chase Manhattan Bank, a bank organized under
the laws of New York, acting in its capacity as Lender hereunder.
"Judgment Currency" shall have the meaning assigned to such term in
Section 13.16 hereof.
"Judgment Currency Conversion Date" shall have the meaning assigned to
such term in Section 13.16 hereof.
"Lender" shall have the meaning assigned to such term in the introductory
paragraph hereof.
"Lending Office" means, for each Lender and for each type of Revolving
Credit Loan, the lending office of such Lender (or of an affiliate of such
Lender) designated as such for such type of Revolving Credit Loan on its
signature page hereof or such
11
other office of such Lender (or of an affiliate of such Lender) as such Lender
may from time to time specify to the Administrative Agent and Micro Warehouse as
the office by which its Revolving Credit Loans of such type are to be made and
maintained.
"Letter of Credit Availability" means, at any date of determination
thereof, the amount by which (a) the lesser of (i) the result of (A) the
aggregate amount of the Revolving Credit Commitments to Micro Warehouse as of
such date minus (B) the unpaid aggregate principal amount of the Revolving
Credit Loans to Micro Warehouse then outstanding and (ii) $10,000,000 exceeds
(b) the aggregate amount of the Letter of Credit Obligations at such date.
"Letter of Credit Funding" shall have the meaning assigned to such term in
Section 3.05(b) hereof.
"Letter of Credit Obligations" means, at any date of determination
thereof, all liabilities of Micro Warehouse with respect to Letters of Credit,
whether or not any liability is contingent, including, without limitation, the
sum of (a) the aggregate amount available to be drawn under the Letters of
Credit then outstanding plus (b) the aggregate amount of all unpaid
Reimbursement Obligations.
"Letters of Credit" shall have the meaning assigned to such term in
Section 3.01(a) hereof.
"Leverage Ratio" means, at any date of determination thereof, the ratio of
(a) Consolidated Liabilities to (b) Consolidated Tangible Net Worth.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other similar encumbrance or right of
others, or any agreement to give any of the foregoing.
"Material Adverse Effect" means any material adverse effect on (a) the
business, profits, properties or condition of the Consolidated Entities, taken
as a whole, (b) the ability of any Obligor to perform its obligations under each
of the Facility Documents to which it is a party or (c) the binding nature,
validity or enforceability of any of the Facility Documents, which, in each
case, arises from, or reasonably could be expected to arise from, any action or
omission of action on the part of any Consolidated Entity or the occurrence of
any event or the existence of any fact or condition in respect of any
Consolidated Entity or any of its Properties.
"Micro Warehouse" shall have the meaning assigned to such term in the
introductory paragraph hereof.
12
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by any Consolidated Entity or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"Obligation Currency" shall have the meaning assigned to such term in
Section 13.16 hereof.
"Obligations" means the unpaid principal of and interest on (including
interest accruing on or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Revolving Credit Notes and all other obligations and liabilities
of any Obligor to the Administrative Agent or any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any Revolving Credit Note, any Letter of Credit, any other Facility
Document and any other document made, delivered or given in connection therewith
or herewith, whether on account of principal, interest, Guaranties,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees and disbursements of counsel to the Administrative
Agent or any Lender) or otherwise.
"Obligor" shall have the meaning assigned to such term in the introductory
paragraph hereof.
"Participating Lender" means, any Lender (other than Issuing Lender) with
respect to its Participating Interest in each Letter of Credit.
"Participating Interest" means, with respect to each Letter of Credit, (a)
in the case of the Issuing Lender, its interest in such Letter of Credit after
giving effect to the granting of any participating interest therein pursuant
hereto and (b) in the case of each Participating Lender, its undivided
participating interest in such Letter of Credit.
"Payor" shall have the meaning assigned to such term in Section 12.13
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Prime Rate" means that rate of interest from time to time announced by
the Reference Lender at its Principal Office as its prime commercial lending
rate.
"Principal Office" means the principal office of the Administrative Agent,
presently located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
13
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"Pro Rata Share" means, with respect to each Lender, a share proportional
to such Lender's Commitment Percentage.
"Purchase Money Lien" means a Lien on any Property acquired by any
Consolidated Entity or placed on any Property in order to finance the
acquisition of such Property, or the assumption of any Lien on Property existing
at the time of the acquisition of such Property or a Lien incurred in connection
with any conditional sale or other title retention agreement or a Capital Lease.
"Receivables" means all accounts, contract rights, instruments, documents,
chattel paper, general intangibles relating to accounts, drafts and acceptances,
and all other forms of obligations arising out of or in connection with the sale
or lease of inventory or for services rendered (including, without limitation,
all rights to receive payments under all contracts), all guarantees and other
security therefor, whether secured or unsecured and whether now existing or
hereafter created.
"Reference Lender" means The Chase Manhattan Bank (or if The Chase
Manhattan Bank no longer quotes on the London interbank market, such successor
leading bank in the London interbank market which shall be reasonably appointed
by the Administrative Agent).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means any change after the date of this Agreement in
United States federal, state, municipal or foreign laws or regulations
(including without limitation Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class of banks
of which such bank is a member, of or under any United States, federal, state,
municipal or foreign laws or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reimbursement Obligation" means the obligation of Micro Warehouse to
reimburse the Issuing Lender in accordance with the terms of this Agreement for
the payment made by the Issuing Lender under any Letter of Credit.
"Required Lenders" means, at any time while no Obligations are
outstanding, Lenders having at least 51% of the aggregate amount of the
Revolving Credit
14
Commitments and, at any time while Obligations are outstanding, Lenders holding
at least 51% of the aggregate amount of Obligations. For purposes of determining
the Required Lenders, any amounts denominated in an Alternative Currency shall
be translated into Dollars at the Spot Exchange Rate in effect at such time.
"Required Payment" shall have the meaning assigned to such term in Section
12.13 hereof.
"Reserve Requirement" means, for any Interest Period for any Eurocurrency
Loan for any Interest Period therefor, the average maximum rate at which
reserves (including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation D by
member banks of the Federal Reserve System in New York City with deposits
exceeding $1,000,000,000 against in the case of Eurocurrency Loans,
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by reason of any
Regulatory Change against (i) any category of liabilities which includes
deposits by reference to which the Fixed Base Rate for Eurocurrency Loans is to
be determined as provided in the definition of "Fixed Base Rate" in this Section
1.01 or (ii) any category of extensions of credit or other assets which include
Eurocurrency Loans.
"Restructuring Plan" means the proposed restructuring of operations of the
Consolidated Entities involving the closing of businesses in Australia and Japan
and the disposal of its operations in Norway, Denmark and Finland and the
restructuring of USA Flex and OnLine Interactive, Inc.
"Revolving Credit Commitments" means, with respect to each Lender, the
obligation of such Lender to make its Revolving Credit Loans to the respective
Borrower under this Agreement in the aggregate principal amount set forth in
Schedule I, as such amount may be reduced or otherwise modified from time to
time.
"Revolving Credit Loans" shall have the meaning assigned to such term in
Section 2.01.
"Revolving Credit Notes" means the promissory notes of the respective
Borrower in the form of Exhibit A to the Existing Credit Agreement evidencing
the Revolving Credit Loans made by a Lender hereunder and all promissory notes
delivered in substitution or exchange therefor, as amended or supplemented from
time to time.
"Revolving Credit Termination Date" means June 30, 1999.
"Spot Exchange Rate" means, on any date of determination thereof, (a) with
respect to any Alternative Currency, the spot rate at which Dollars are offered
on such day by the principal London branch of the Reference Lender at
approximately 11:00 a.m. (London time) and (b) with respect to Dollars in
relation to any specified
15
Alternative Currency, the spot rate at which such specified Alternative Currency
is offered on such date by the principal London branch for Dollars at
approximately 11:00 a.m. (London time). For purposes of determining the Spot
Exchange Rate in connection with a borrowing, conversion or renewal in an
Alternative Currency, such Spot Exchange Rate shall be determined as of the
Denomination Date for such borrowing, conversion or renewal with respect to
transactions in the applicable Alternative Currency that will settle on the date
of such borrowing, conversion or renewal.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the securities or other ownership
interest having ordinary voting power for the election of directors or other
persons performing similar functions are at the time owned directly or
indirectly by such Person. "Wholly-Owned Subsidiary" means any such corporation
or other entity of which all of such securities or other ownership interests are
so owned directly or indirectly by such Person.
"Subsidiary Borrower" shall have the meaning assigned to such term in the
introductory paragraph hereof.
"Subsidiary Guarantor" shall have the meaning assigned to such term in the
introductory paragraph hereof.
"Taxes" shall have the meaning assigned to such term in Section 4.06
hereof.
"`type' of Loan" shall have the meaning assigned to such term in Section
2.01 hereof.
"UCP" shall have the meaning assigned to such term in Section 13.13
hereof.
"Unconditional Guaranty" shall have the meaning assigned to such term in
Section 11.01 hereof.
"Unfunded Benefit Liabilities" means, with respect to any Domestic Plan or
Foreign Plan, the amount (if any) by which the present value of all benefit
liabilities (within the meaning of Section 4001(a)(16) of ERISA or within the
meaning of any similar foreign law) under such Domestic Plan or Foreign Plan
exceeds the fair market value of all assets of such Domestic Plan or Foreign
Plan allocable to such benefit liabilities, as determined on the most recent
valuation date of such Domestic Plan or Foreign Plan and in accordance with the
provisions of ERISA or such similar foreign law for calculating the potential
liability of any Consolidated Entity or any ERISA Affiliate under Title IV of
ERISA or such similar foreign law.
"Variable Rate" means, for any day, the higher of (a) the Federal Funds
Rate for such day plus 1/4 of one percent and (b) the Prime Rate for such day.
16
"Variable Rate Loan" means any Revolving Credit Loan when and to the
extent the interest rate for such Revolving Credit Loan is determined in
relation to the Variable Rate.
Section 1.2. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
ARTICLE 2. THE CREDIT.
Section 2.1. Revolving Credit Loans. (a) Subject to the terms and
conditions of this Agreement, each of the Lenders severally agrees to make
revolving credit loans (the "Revolving Credit Loans") to each Borrower (as
specified in the notice of each borrowing pursuant to Section 2.08) from time to
time from and including the date hereof to and including the Revolving Credit
Termination Date, up to but not exceeding in the aggregate principal amount at
any one time outstanding, the amount of the respective Revolving Credit
Commitments of such Lender to such Borrower. The aggregate amount of the
Revolving Credit Loans outstanding at any time shall never exceed the result of
(i) the aggregate amount of the Revolving Credit Commitments minus (ii) the
aggregate amount of Letter of Credit Obligations outstanding at such time. The
Revolving Credit Loans shall be due and payable on the Revolving Credit
Termination Date. The Revolving Credit Loans may be outstanding as Variable Rate
Loans or Eurocurrency Loans (each a "type" of Revolving Credit Loans).
Eurocurrency Loans may be denominated in Dollars or in one or more Alternative
Currencies but Variable Rate Loans shall be denominated only in Dollars. Each
type of Revolving Credit Loans of each Lender shall be made and maintained at
such Lender's applicable Lending Office for such type of Revolving Credit Loans.
(b) Any Eurocurrency Loan may be made in the Alternative Currency
specified in the notice of each borrowing pursuant to Section 2.08 in an amount
equal to the Alternative Currency Equivalent of the Dollar amount specified in
such notice, as determined by the Administrative Agent as of the Denomination
Date for such borrowing (which determination shall be conclusive absent manifest
error). For purposes of determining the amount outstanding under any Lender's
Revolving Credit Commitments, each Eurocurrency Loan denominated in an
Alternative Currency shall be the Dollar Equivalent for such Eurocurrency Loan
as of the Denomination Date.
Section 2.2. The Revolving Credit Notes. The Revolving Credit Loans of
each Lender to each Borrower are evidenced by a Revolving Credit Note in the
case of Micro Warehouse and Micro Warehouse Limited, dated the Effective Date,
and, in the case of each other Borrower, dated May 10, 1996, duly completed and
executed by such Borrower.
Section 2.3. Purpose. Each Borrower shall use the proceeds of the
Revolving Credit Loans for general corporate purposes (including, without
limitation, working
17
capital and to finance Acceptable Acquisitions). Such proceeds shall not be used
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying "margin stock" within the meaning of Regulation U.
Section 2.4. Borrowing Procedures. Each Borrower shall give the
Administrative Agent notice of each borrowing to be made by it hereunder as
provided in Section 2.08. Not later than 12:00 noon New York, New York time on
the date specified for such borrowing hereunder, each Lender shall, through its
applicable Lending Office and subject to the conditions of this Agreement, make
the amount of the Revolving Credit Loan to be made by it on such day in the
currency in which such Revolving Credit Loan is to be made available to the
Administrative Agent at the Principal Office and in immediately available funds
for the account of the Administrative Agent. The amount so received by the
Administrative Agent shall, subject to the conditions of this Agreement, be made
available to such Borrower, in immediately available funds, by the
Administrative Agent crediting an account of such Borrower designated by such
Borrower and maintained with the Administrative Agent at the Principal Office.
Section 2.5. Prepayments and Conversions. (a) Each Borrower shall have the
right to make prepayments of principal, to convert one type of Revolving Credit
Loans into another type of Revolving Credit Loans or to convert Eurocurrency
Loans denominated in one currency to Eurocurrency Loans denominated in another
currency, at any time or from time to time; provided that: (a) such Borrower
shall give the Administrative Agent notice of each such prepayment or conversion
as provided in Section 2.08; and (b) Eurocurrency Loans may be prepaid or
converted only on the last day of an Interest Period for such Eurocurrency Loans
unless such Borrower agrees to provide to the Administrative Agent for the
account of each Lender compensation in accordance with Section 4.05.
(b) If at any time prior to the Revolving Credit Termination Date,
the aggregate amount of Revolving Credit Loans to any Borrower (plus, in the
case of Micro Warehouse, the Letter of Credit Obligations) shall exceed the
aggregate amount of the Revolving Credit Commitments to such Borrower, such
Borrower shall repay the Lenders forthwith such amounts as may be necessary to
eliminate such excess (and, in the case of Micro Warehouse, if the Revolving
Credit Loans cannot be repaid to eliminate such excess due to the amount of
outstanding Letters of Credit, Micro Warehouse shall deposit with the
Administrative Agent sufficient cash collateral to cover such excess), and the
failure of such Borrower to make and the Lenders to receive such payments shall
constitute an Event of Default hereunder. For the purposes of this Section
2.05(b), the amount outstanding under any Eurocurrency Loan denominated in an
Alternative Currency at any time shall be the Dollar Equivalent thereof as of
the Denomination Date.
Section 2.6. Interest Periods; Renewals. (a) In the case of each
Eurocurrency Loan, the Borrower thereunder shall select an Interest Period of
any duration in accordance with the definition of Interest Period in Section
1.01, subject to the
18
following limitations: (i) no Interest Period may extend beyond the Revolving
Credit Termination Date; (ii) notwithstanding clause (i) above, no Interest
Period shall have a duration less than 30 days, and if any such proposed
Interest Period would otherwise be for a shorter period, such Interest Period
shall not be available; (iii) if an Interest Period would end on a day which is
not a Banking Day, such Interest Period shall be extended to the next Banking
Day, unless such Banking Day would fall in the next calendar month in which
event such Interest Period shall end on the immediately preceding Banking Day;
(iv) no more than ten Interest Periods may be outstanding at any one time; (v)
no more than two Eurocurrency Loan borrowings in each Alternative Currency may
be outstanding at any one time; and (vi) no more than twenty Eurocurrency Loan
borrowings may be outstanding at any one time. For purposes of this Section
2.06(a), borrowings having different Interest Periods or denominated in
different currencies, regardless of whether they commence on the same date,
shall be considered separate borrowings.
(b) Upon notice to the Administrative Agent as provided in Section
2.08, each Borrower may renew any Eurocurrency Loan on the last day of the
Interest Period therefor as the same type of Revolving Credit Loans with an
Interest Period of the same or different duration in accordance with the
limitations provided above. If such Borrower shall fail to give notice to the
Administrative Agent of such a renewal, (i) in the case of a Eurocurrency Loan
denominated in Dollars, such Eurocurrency Loan shall automatically become a
Variable Rate Loan on the last day of the current Interest Period and (ii) in
the case of a Eurocurrency Loan denominated in an Alternative Currency, such
Eurocurrency Loan shall automatically become a Eurocurrency Loan denominated in
the same Alternative Currency having an Interest Period of one month.
Section 2.7. Changes of Revolving Credit Commitments. If the aggregate
amount of the Revolving Credit Commitment of The Chase Manhattan Bank to the
Borrowers shall have not been reduced by $15,000,000 prior to June 30, 1998
(whether by assignment or otherwise), the aggregate amount of Revolving Credit
Commitments of all of the Lenders shall be automatically reduced by
$6,666,666.67 on June 30, 1998, $6,666,666.67 on September 30, 1998 and
$6,666,666.66 on December 31, 1998, each such reduction to be made pro rata in
accordance with each Lender's Pro Rata Share. The Borrowers shall have the right
to elect to have each such reduction applied to the Revolving Credit Commitments
extended to any Borrower(s) upon notice to the Administrative Agent as provided
in Section 2.08; provided that if no such election is made, the Revolving Credit
Commitments of each Lender to Micro Warehouse shall be automatically reduced.
Each Borrower shall have the right to further reduce or terminate the amount of
unused Revolving Credit Commitments at any time or from time to time, provided
that: (i) such Borrower shall give notice of each such reduction or termination
to the Administrative Agent as provided in Section 2.08; and (ii) each partial
reduction shall be in an aggregate amount at least equal to $1,000,000. The
Revolving Credit Commitments once reduced or terminated may not be reinstated.
19
Section 2.8. Certain Notices. Notices by any Borrower to the
Administrative Agent of each borrowing pursuant to Section 2.04, and each
prepayment or conversion pursuant to Section 2.05 and each renewal pursuant to
Section 2.06(b), and each reduction or termination of the Revolving Credit
Commitments pursuant to Section 2.07(a) shall be irrevocable and shall be
effective only if received by the Administrative Agent not later than 11:00 a.m.
New York, New York time, and (a) in the case of borrowings and prepayments of,
conversions into and (in the case of Eurocurrency Loans) renewals of (i)
Variable Rate Loans, given the same Banking Day; and (ii) Eurocurrency Loans,
given three Banking Days prior thereto; and (b) in the case of reductions or
termination of the Revolving Credit Commitments, given the same Banking Day.
Each such notice shall specify the Revolving Credit Loans to be borrowed,
prepaid, converted or renewed, the amount (subject to Section 2.09), the type
and the currency of the Revolving Credit Loans to be borrowed, or converted, or
prepaid or renewed (and, in the case of a conversion, the type of Revolving
Credit Loans to result from such conversion and, in the case of a Eurocurrency
Loan, the Interest Period therefor) and the date of the borrowing or prepayment,
or conversion or renewal (which shall be a Banking Day). Each such notice of
reduction or termination shall specify the amount of the Revolving Credit
Commitments to be reduced or terminated. The Administrative Agent shall promptly
notify the Lenders of the contents of each such notice.
Section 2.9. Minimum Amounts. Except for borrowings which exhaust the full
remaining amount of the Revolving Credit Commitments, prepayments or conversions
which result in the prepayment or conversion of all Revolving Credit Loans of a
particular type and a particular currency or conversions made pursuant to
Section 4.04, each borrowing, prepayment, conversion and renewal of principal of
Revolving Credit Loans of a particular type and a particular currency shall be
in an amount not less than (i) $100,000 in the aggregate for all Lenders in the
case of Variable Rate Loans and (ii) $1,000,000 (or the Dollar Equivalent
thereof) in the aggregate and in increments of $100,000 (or the Dollar
Equivalent thereof) in the case of Eurocurrency Loans unless such minimum amount
is waived by the Required Lenders (borrowings, prepayments, conversions or
renewals of or into Revolving Credit Loans of different types or, in the case of
Eurocurrency Loans, having different Interest Periods or denominated in
different currencies at the same time hereunder to be deemed separate
borrowings, prepayments, conversions and renewals for the purposes of the
foregoing).
Section 2.10. Interest. (a) Interest shall accrue on the outstanding and
unpaid principal amount of each Revolving Credit Loan for the period from and
including the date of such Revolving Credit Loan to but excluding the date such
Revolving Credit Loan is due at the following rates per annum: (i) for a
Variable Rate Loan, at a variable rate per annum equal to the Variable Rate plus
the Interest Margin and (ii) for a Eurocurrency Loan, at a fixed rate equal to
the Fixed Rate plus the Interest Margin. If the principal amount of any
Revolving Credit Loan and any other amount payable by any Obligor hereunder,
under the Revolving Credit Notes or under the other Facility
20
Documents shall not be paid when due (at stated maturity, by acceleration or
otherwise), interest shall accrue on such amount to the fullest extent permitted
by law from and including such due date to but excluding the date such amount is
paid in full at the Default Rate.
(b) The interest rate on each Variable Rate Loan shall change when
the Variable Rate changes and interest on each such Variable Rate Loan shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed. Interest on each Eurocurrency Loan shall be calculated on the basis of
a year of 360 days for the actual number of days elapsed. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Administrative Agent shall notify the applicable Borrower and the Lenders.
(c) Accrued interest shall be due and payable in the relevant
currency in arrears upon any full payment of principal or conversion and (i) for
each Variable Rate Loan, on the last day of each March, June, September and
December, commencing the first such date after such Variable Rate Loan; and (ii)
for each Eurocurrency Loan, on the last day of each Interest Period therefor
and, if such Interest Period is longer than three months, at three month
intervals following the first day of such Interest Period; provided that
interest accruing at the Default Rate shall be due and payable from time to time
on demand of the Administrative Agent.
Section 2.11. Fees. Each Borrower shall pay to the Administrative Agent
for the account of each Lender a commitment fee on the daily average of the
unused Revolving Credit Commitments to such Borrower of such Lender (minus, in
the case of Micro Warehouse, such Lender's Pro Rata Share of Letter of Credit
Obligations), for the period from and including the date hereof to the earlier
of the date the Revolving Credit Commitments are terminated or the Revolving
Credit Termination Date at a rate per annum (i) if the Debt to EBIT Ratio is
less than .75 to 1.00, equal to 1/8 of one percent, (ii) if the Debt to EBIT
Ratio is equal to or greater than .75 to 1.00 and less than 2.00 to 1.00, equal
to 1/4 of one percent or (iii) if the Debt to EBIT Ratio is equal to or greater
than 2.00 to 1.00, equal to 3/8 of one percent, calculated in each case on the
basis of a year of 360 days for the actual number of days elapsed. The accrued
commitment fee shall be due and payable in arrears upon any reduction or
termination of the Revolving Credit Commitments and on the last day of each
March, June, September and December, commencing on the first such date after the
Closing Date.
Section 2.12. Payments Generally. All payments under this Agreement, the
Revolving Credit Notes and the other Facility Documents shall be made in
immediately available funds in Dollars except that payments on Eurocurrency
Loans denominated in an Alternative Currency shall be made in such Alternative
Currency. All payments shall be made not later than 11:00 a.m. New York, New
York time on the relevant dates specified above (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Banking Day) to an account of the Administrative Agent maintained at the
Principal Office for the account of the
21
applicable Lending Office of each Lender. The Administrative Agent, or any
Lender for whose account any such payment is to be made, may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the applicable Borrower with the
Administrative Agent or such Lender, as the case may be, and any Lender so doing
shall promptly notify the Administrative Agent. The applicable Borrower shall,
at the time of making each payment under this Agreement, any Revolving Credit
Note or any other Facility Document, specify to the Administrative Agent the
principal or other amount payable by such Borrower under this Agreement, such
Revolving Credit Note or such other Facility Document to which such payment is
to be applied (and in the event that it fails to so specify, or if a Default or
Event of Default has occurred and is continuing, the Administrative Agent may
apply such payment as it may elect in its sole discretion (subject to Section
12.16)). If the due date of any payment under this Agreement, any Revolving
Credit Note or any other Facility Document would otherwise fall on a day which
is not a Banking Day, such date shall be extended to the next succeeding Banking
Day and interest shall be payable for any principal so extended for the period
of such extension. Each payment received by the Administrative Agent hereunder,
under any Revolving Credit Note or under any other Facility Document for the
account of a Lender shall be paid promptly to such Lender, in immediately
available funds, for the account of such Lender's applicable Lending Office.
Section 2.13. Novation. Micro Warehouse Limited (Company No. 2640772)
hereby agrees to assume all liabilities and obligations whatsoever of the Old
MWL (Company No. 2431673) pursuant to the Existing Credit Agreement (as
amended.)
ARTICLE 3. THE LETTERS OF CREDIT.
Section 3.1. Letters of Credit. (a) Subject to the terms and conditions of
this Agreement, the Issuing Lender, on behalf of the Lenders, and in reliance on
the agreement of the Lenders set forth in Section 3.04, agrees to issue on any
Banking Day prior to the Revolving Credit Termination Date for the account of
Micro Warehouse irrevocable standby letters of credit in such form as may from
time to time be approved by the Issuing Lender acting reasonably (together with
the applications therefor, the "Letters of Credit"); provided that on the date
of the issuance of any Letter of Credit, and after giving effect to such
issuance, the Letter of Credit Obligations shall not exceed the Letter of Credit
Availability.
(b) Each Letter of Credit shall (i) have an expiry date no later
than the earlier of (A) one year from the date of issuance and (B) the Revolving
Credit Termination Date, (ii) be denominated in Dollars, (iii) be in a minimum
face amount of $100,000 and (iv) provide for the payment of sight drafts when
presented for honor thereunder in accordance with the terms thereof and when
accompanied by the documents described or when such documents are presented, as
the case may be.
22
Section 3.2. Purposes. Micro Warehouse shall use the Letters of Credit for
the purpose of securing obligations incurred in the ordinary course of business
(including, without limitation, to secure obligations under insurance programs).
Section 3.3. Procedures for Issuance of Letters of Credit. Micro Warehouse
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an application therefor in such form as may from time to time be approved by the
Issuing Lender acting reasonably, completed to the reasonable satisfaction of
the Issuing Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may reasonably request. Upon receipt of any
application, the Issuing Lender will process such application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit in such customized form as may reasonably be
requested by Micro Warehouse (but in no event shall the Issuing Lender issue any
Letter of Credit later than five Banking Days after receipt of the application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender
and Micro Warehouse. the Issuing Lender shall furnish a copy of such Letter of
Credit to Micro Warehouse promptly following the issuance thereof.
Section 3.4. Participating Interests. In the case of each Letter of
Credit, effective as of the date of the issuance thereof, the Issuing Lender
agrees to allot and does allot to each other Lender, and each such Lender
severally and irrevocably agrees to take and does take a Participating Interest
in such Letter of Credit in a percentage equal to such Lender's Pro Rata Share
of the Letter of Credit Obligations. On the date that any Lender becomes a party
to this Agreement in accordance with Section 13.05, Participating Interests in
any outstanding Letter of Credit held by the transferor Lender from which such
transferee Lender acquired its interest hereunder shall be proportionately
reallotted between such transferee Lender and such transferor Lender. Each
Participating Lender hereby agrees that its obligation to participate in each
Letter of Credit, and to pay or to reimburse the Issuing Lender for its
participating share of the drafts drawn thereunder, is absolute, irrevocable and
unconditional and shall not be affected by any circumstances whatsoever,
including, without limitation, the occurrence and continuance of any Default or
Event of Default, and that each such payment shall be made without any offset,
abatement, withholding or other reduction whatsoever.
Section 3.5. Payments. (a) In order to induce the Issuing Lender to issue
the Letters of Credit, Micro Warehouse hereby agrees to reimburse the Issuing
Lender, unless such Reimbursement Obligation has been accelerated pursuant to
Section 10.02, on each date that Micro Warehouse has been notified by the
Issuing Lender that any draft presented under any Letter of Credit is paid by
the Issuing Lender, for (i) the amount of the draft paid by the Issuing Lender
and (ii) the amount of any taxes,
23
fees, charges or other costs or expenses whatsoever incurred by the Issuing
Lender in connection with any payment made by the Issuing Lender under, or with
respect to, such Letter of Credit. Each such payment shall be made to the
Issuing Lender at its office specified in Section 13.06, in lawful money of the
United States and in immediately available funds on the day that payment is made
by the Issuing Lender. Interest on any and all amounts remaining unpaid by Micro
Warehouse under this Section 3.05 at any time from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until payment
in full shall be payable to the Issuing Lender on demand at a fluctuating rate
per annum equal to the Variable Rate plus 2% per annum.
(b) In the event that the Issuing Lender makes a payment (a "Letter
of Credit Funding") under any Letter of Credit and is not reimbursed in full
therefor on the date of such Letter of Credit Funding, in accordance with the
terms hereof, the Issuing Lender will promptly through the Administrative Agent
notify each Participating Lender that acquired its Participating Interest in
such Letter of Credit from the Issuing Lender. No later than the close of
business on the date such notice is given if such notice is given, each such
Participating Lender will transfer to the Administrative Agent, for the account
of the Issuing Lender, in immediately available funds, an amount equal to such
Participating Lender's Pro Rata Share of the unreimbursed portion of such Letter
of Credit Funding, together with interest, if any, accrued thereon from and
including the date of such transfer at a rate per annum equal to the Federal
Funds Rate.
(c) Whenever, at any time after the Issuing Lender has made payment
under a Letter of Credit and has received from any Participating Lender such
Participating Lender's Pro Rata Share of the unreimbursed portion of such
payment, the Issuing Lender receives any reimbursement on account of such
unreimbursed portion or any payment of interest on account thereof, the Issuing
Lender will distribute to the Administrative Agent, for the account of such
Participating Lender, its Pro Rata Share thereof; provided, however, that in the
event that the receipt by the Issuing Lender of such reimbursement or such
payment of interest (as the case may be) is required to be returned, such
Participating Lender will promptly return to the Administrative Agent, for the
account of the Issuing Lender, any portion thereof previously distributed by the
Issuing Lender to it.
Section 3.6. Further Assurances. Micro Warehouse hereby agrees to do and
perform any and all acts and to execute any and all further instruments from
time to time reasonably requested by the Issuing Lender more fully to effect the
purposes of this Agreement and the issuance of the Letters of Credit opened
hereunder.
Section 3.7. Obligations Absolute. The payment obligations of Micro
Warehouse under Section 3.05 shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
24
(a) the existence of any claim, set-off, defense or other right
which Micro Warehouse may have at any time against any beneficiary, or any
transferee, of any Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Lender or any
Participating Lender, or any other Person, whether in connection with this
Agreement, any other Facility Document, the transactions contemplated herein, or
any unrelated transaction;
(b) any statement or any other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(c) payment by the Issuing Lender under any Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit; or
(d) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing.
Section 3.8. Cash Collateral Account. If the Revolving Credit Commitments
are duly terminated and all amounts owing under this Agreement, the Revolving
Credit Notes and the Letters of Credit become due and payable pursuant to
Section 10, Micro Warehouse shall deposit with the Administrative Agent, on the
date such obligations become due and payable, an amount in cash equal to the
Letter of Credit Obligations as of such date and the Letter of Credit fees in
accordance with Section 3.09. Such amount shall be deposited in a cash
collateral account to be established by the Administrative Agent, for the
benefit of the Lenders, and shall constitute collateral security for the Letter
of Credit Obligations and other amounts owing hereunder. All amounts in such
cash collateral account shall be maintained pursuant to a cash collateral
account agreement which shall grant to the Administrative Agent exclusive
dominion and control (including exclusive rights of withdrawal) over all such
amounts and shall be otherwise satisfactory in form and substance to the
Administrative Agent.
Section 3.9. Letter of Credit Fees. (a) Micro Warehouse agrees to pay the
Administrative Agent, for the account of the Issuing Lender and the
Participating Lenders, a non-refundable letter of credit fee with respect to
each Letter of Credit, payable in Dollars, computed at the rate per annum equal
to 3/4 of one percent, calculated on the basis of a year of 360 days for the
actual days elapsed, of the aggregate undrawn amount under such Letter of Credit
on the date on which such fee is calculated. Such fees shall be payable in
advance on the date of issuance of such Letter of Credit and shall be
nonrefundable.
(b) Micro Warehouse agrees to pay the Issuing Lender, for its own account,
its normal and customary administration, amendment, transfer, payment and
25
negotiation fees charged in connection with its issuance and administration of
letters of credit.
ARTICLE 4. YIELD PROTECTION; ILLEGALITY; ETC.
Section 4.1. Additional Costs. (a) Each Borrower shall pay directly to
each Lender from time to time on demand such amounts as such Lender may
determine to be necessary to compensate it for any costs which such Lender
determines are attributable to its making or maintaining any Eurocurrency Loans
to such Borrower under this Agreement or its Revolving Credit Note of such
Borrower or its obligation to make any such Eurocurrency Loans hereunder, or any
reduction in any amount receivable by such Lender hereunder in respect of any
such Eurocurrency Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation of
any amounts payable to such Lender under this Agreement or its Revolving Credit
Notes in respect of any of such Eurocurrency Loans to such Borrower (other than
taxes imposed on the overall net income or profits of such Lender or of its
Lending Office for any of such Eurocurrency Loans by the jurisdiction in which
such Lender has its principal office or such Lending Office, or any branch or
franchise tax applicable thereto); or (ii) imposes or modifies any reserve,
special deposit, deposit insurance or assessment, minimum capital, capital ratio
or similar requirements relating to any extensions of credit or other assets of,
or any deposits with or other liabilities of, such Lender (including any of such
Eurocurrency Loans or any deposits referred to in the definition of "Fixed Base
Rate" in Section 1.01); or (iii) imposes any other condition affecting this
Agreement or its Revolving Credit Notes (or any of such extensions of credit or
liabilities). Each Lender will notify the applicable Borrower of any event
occurring after the date of this Agreement which will entitle such Lender to
compensation pursuant to this Section 4.01(a) as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation. If any
Lender requests compensation from a Borrower under this Section 4.01(a), or
under Section 4.01(c), such Borrower may, by notice to such Lender (with a copy
to the Administrative Agent), require that such Lender's affected Eurocurrency
Credit Loans with respect to which such compensation is requested be converted
in accordance with Section 4.04.
(b) Without limiting the effect of the foregoing provisions of this
Section 4.01, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
Eurocurrency Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes Eurocurrency
Loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Lender so elects by
notice to the applicable Borrower (with a copy to the Administrative Agent), the
obligation of such Lender to make or renew, and to convert
26
Variable Rate Loans and unaffected Eurocurrency Loans into, affected
Eurocurrency Loans hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (and all affected Eurocurrency Loans held by such
Lender then outstanding shall be converted in accordance with Section 4.04).
(c) Without limiting the effect of the foregoing provisions of this
Section 4.01 (but without duplication), each Borrower shall pay directly to each
Lender from time to time on request such amounts as such Lender may determine to
be necessary to compensate such Lender for any costs which it determines are
attributable to the maintenance by it or any of its affiliates pursuant to any
law or regulation of any jurisdiction or any interpretation, directive or
request (whether or not having the force of law and whether in effect on the
date of this Agreement or thereafter) of any court or governmental or monetary
authority of capital in respect of its Revolving Credit Loans to such Borrower
hereunder or its obligation to make Revolving Credit Loans hereunder (such
compensation to include, without limitation, an amount equal to any reduction in
return on assets or equity of such Lender to a level below that which it could
have achieved but for such law, regulation, interpretation, directive or
request). Each Lender will notify the applicable Borrower if it is entitled to
compensation pursuant to this Section 4.01(c) as promptly as practicable after
it determines to request such compensation.
(d) Determinations and allocations by a Lender for purposes of this
Section 4.01 of the effect of any Regulatory Change pursuant to subsections (a)
or (b), or of the effect of capital maintained pursuant to subsection (c), on
its costs of making or maintaining Revolving Credit Loans or its obligation to
make Revolving Credit Loans, or on amounts receivable by, or the rate of return
to, it in respect of Revolving Credit Loans or such obligation, and of the
additional amounts required to compensate such Lender under this Section 4.01,
shall be conclusive, provided that such determinations and allocations are made
on a reasonable basis.
Section 4.2. Limitation on Eurocurrency Loans. Anything herein to the
contrary notwithstanding, if:
(a) the Administrative Agent determines (which determination shall
be conclusive) that quotations of interest rates for the relevant deposits
referred to in the definition of "Fixed Base Rate" in Section 1.01 are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining the rate of interest for any Eurocurrency Loans as provided in this
Agreement; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the relevant rates of
interest referred to in the definition of "Fixed Base Rate" in Section 1.01 upon
the basis of which the rate of interest for any Eurocurrency Loans is to be
determined do not adequately cover the cost to the Lenders of making or
maintaining such Eurocurrency Loans; or
27
(c) in the case of Eurocurrency Loans denominated in an Alternative
Currency, any Lender shall determine (which determination shall be conclusive)
and notify the Administrative Agent that the relevant Alternative Currency is
not available in the relevant amounts or for the relevant period, or that a
change in national or international controls has occurred which would, in the
opinion of such Lender, make it impracticable for such Lender to make, fund or
maintain its Eurocurrency Loans to be made in such Alternative Currency or for
any Borrower to pay the principal of or interest on such Eurocurrency Loans as
provided in this Agreement;
then the Administrative Agent shall give the applicable Borrower and each Lender
prompt notice thereof, and so long as such condition remains in effect, the
Lenders shall be under no obligation to make or renew affected Eurocurrency
Loans or to convert Variable Rate Loans or unaffected Eurocurrency Loans into
affected Eurocurrency Loans and such Borrower shall, on the last day(s) of the
then current Interest Period(s) for the outstanding affected Eurocurrency Loans,
either prepay such affected Eurocurrency Loans or convert such affected
Eurocurrency Loans into Variable Rate Loans in accordance with Section 2.05.
Section 4.3. Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make, maintain or renew
Eurocurrency Loans in any currency hereunder or convert Variable Rate Loans or
Eurocurrency Loans in a different currency to Eurocurrency Loans in such
currency, then such Lender shall promptly notify the Borrower thereunder (with a
copy to the Administrative Agent) and such Lender's obligation to make or renew
affected Eurocurrency Loans and to convert Variable Rate Loans or unaffected
Eurocurrency Loans into affected Eurocurrency Loans hereunder shall be suspended
until such time as such Lender may again make, renew, or convert and maintain
such affected Eurocurrency Loans and such Lender's outstanding affected
Eurocurrency Loans, as the case may be, shall be converted in accordance with
Section 4.04.
Section 4.4. Certain Conversions pursuant to Sections 4.01 and 4.03. If
affected Eurocurrency Loans are to be converted pursuant to Section 4.01 or
4.03, such Lender's affected Eurocurrency Loans shall be automatically converted
into Variable Rate Loans on the last day(s) of the then current Interest
Period(s) for the affected Eurocurrency Loans (or, in the case of a conversion
required by Section 4.01(b) or 4.03, on such earlier date as such Lender may
specify to the Borrower thereunder with a copy to the Administrative Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in Section 4.01 or 4.03 which gave rise to such
conversion no longer exist:
(a) to the extent that such Lender's affected Eurocurrency Loans
have been so converted, all payments and prepayments of principal which would
28
otherwise be applied to such Lender's affected Eurocurrency Loans shall be
applied instead to its Variable Rate Loans;
(b) all Eurocurrency Loans which would otherwise be made or renewed
by such Lender as affected Eurocurrency Loans shall be made instead as Variable
Rate Loans and all Variable Rate Loans or unaffected Eurocurrency Loans of such
Lender which would otherwise be converted into affected Eurocurrency Loans shall
be converted instead into (or shall remain as) Variable Rate Loans; and
(c) if affected Eurocurrency Loans of other Lenders are subsequently
converted into unaffected Eurocurrency Loans, such Lender's Variable Rate Loans
shall be automatically converted on the conversion date into such other
unaffected Eurocurrency Loans to the extent necessary so that, after giving
effect thereto, all Revolving Credit Loans held by such Lender and the Lenders
whose Revolving Credit Loans are so converted are held pro rata (as to principal
amounts, types, currencies and Interest Periods) in accordance with their
respective Revolving Credit Commitments.
If such Lender gives notice to the applicable Borrower (with a copy to the
Administrative Agent) that the circumstances specified in Section 4.01 or 4.03
which gave rise to the conversion of such Lender's affected Eurocurrency Loans
pursuant to this Section 4.04 no longer exist (which such Lender agrees to do
promptly upon such circumstances ceasing to exist) at a time when affected
Eurocurrency Loans are outstanding, such Lender's Variable Rate Loans shall be
automatically converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding affected Eurocurrency Loans to the extent
necessary so that, after giving effect thereto, all Revolving Credit Loans held
by the Lenders holding affected Eurocurrency Loans and by such Lender are held
pro rata (as to principal amounts, types, currencies and Interest Periods) in
accordance with their respective Revolving Credit Commitments.
Section 4.5. Certain Compensation. Each Borrower shall pay to the
Administrative Agent for the account of each Lender, upon the request of such
Lender through the Administrative Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Lender) to compensate it for any
loss, cost or expense which such Lender determines is attributable to:
(a) any payment, prepayment, conversion or renewal of a Eurocurrency
Loan of such Borrower made by such Lender on a date other than the last day of
an Interest Period for such Eurocurrency Loan (whether by reason of acceleration
or otherwise); or
(b) any failure by such Borrower to borrow, convert into or renew a
Eurocurrency Loan to be made, converted into or renewed by such Lender on the
date specified therefor in the relevant notice under Sections 2.04, 2.05 or
2.06, as the case may be.
29
Without limiting the foregoing, such compensation shall include an amount
equal to the excess, if any, of: (i) the amount of interest which otherwise
would have accrued on the principal amount so paid, prepaid, converted or
renewed or not borrowed, converted or renewed for the period from and including
the date of such payment, prepayment or conversion or failure to borrow, convert
or renew to but excluding the last day of the then current Interest Period for
such Eurocurrency Loan (or, in the case of a failure to borrow, convert or
renew, to but excluding the last day of the Interest Period for such
Eurocurrency Loan which would have commenced on the date specified therefor in
the relevant notice) at the applicable rate of interest for such Eurocurrency
Loan provided for herein; over (ii) the amount of interest (as reasonably
determined by such Lender) such Lender would have bid in the London interbank
market for deposits in the relevant currency of leading banks for amounts
comparable to such principal amount and maturities comparable to such period. A
determination of any Lender as to the amounts payable pursuant to this Section
4.05 shall be conclusive absent manifest error; provided that such determination
is made on a reasonable basis.
Section 4.6. Taxes. Each Borrower covenants and agrees that:
(a) All payments on account of the principal of and interest on its
Revolving Credit Loans and the Revolving Credit Notes, and all other amounts
payable by such Borrower hereunder, under any Revolving Credit Note or under any
other Facility Document, including without limitation amounts payable under
Section 4.06(b), shall be made without any set-off or counterclaim and free and
clear of and without reduction by reason of, all present and future income,
stamp, registration and other taxes and levies, imposts, deductions, charges,
compulsory loans and withholdings whatsoever (other than taxes imposed on the
overall net income of any Lender, or of its applicable Lending Office, by the
jurisdiction in which such Lender's principal office or its applicable Lending
Office is located), and all interest, penalties or similar amounts with respect
thereto, now or hereafter imposed, assessed, levied or collected by any country
or any political subdivision or taxing authority thereof or therein or by any
federation or association of or with which any country may be a member or
associated or by any jurisdiction from which any payment hereunder or under any
Revolving Credit Note is made or any taxing authority thereof or therein, on or
in respect of this Agreement, the Revolving Credit Loans, any Revolving Credit
Note, any other Facility Document, the recording, registration, notarization or
other formalization of any thereof, the enforcement thereof or the introduction
thereof in any judicial proceedings, or on or in respect of any payments of
principal, interest, premiums, charges, fees or other amounts made on, under or
in respect of any thereof (hereinafter called "Taxes"), all of which will be
paid by such Borrower, for its own account, prior to the date on which penalties
attach thereto;
(b) Such Borrower shall indemnify each Lender against, and reimburse
each Lender on demand for, any Taxes and any loss, liability, claim or
30
expense, including interest, penalties and reasonable legal fees (net of any
refunds or tax credits for such Taxes which such Lender shall actually receive
or utilize), which such Lender may incur at any time arising out of or in
connection with any failure of such Borrower to make any payments of Taxes when
due;
(c) In the event that such Borrower is required by applicable law,
decree or regulation to deduct or withhold Taxes from any amounts payable to any
Lender on, under or in respect of this Agreement, the Revolving Credit Loans,
any Revolving Credit Note or any other Facility Document, such Borrower shall
pay to such Lender such additional amount(s) as may be required, after the
deduction or withholding of Taxes, to enable such Lender to receive from such
Borrower an amount equal to the amount stated to be payable by such Borrower to
such Lender under this Agreement, its Revolving Credit Note held by such Lender
or under any other Facility Document;
(d) Such Borrower shall furnish to each Lender the official tax
receipts in respect of each payment of Taxes required under this Section 4.06
within 30 days after the date such payment is due pursuant to applicable law,
and such Borrower shall promptly furnish to each Lender at its request any other
information, documents and receipts that such Lender may, in its reasonable
discretion from time to time, require to establish to its satisfaction that full
and timely payment has been made of all Taxes required to be paid under this
Section 4.06; and
(e) In the event that the payments by such Borrower hereunder become
exempt from or not subject to Taxes, such Borrower will, upon the reasonable
request of any Lender, furnish to such Lender either a certificate from each
appropriate taxing authority or an opinion of counsel reasonably acceptable to
such Lender, in either case stating that payments hereunder are exempt from or
not subject to Taxes.
ARTICLE 5. CONDITIONS PRECEDENT.
Section 5.1. Documentary Conditions Precedent. The obligations of the
Lenders to make the Revolving Credit Loans constituting the initial borrowing
and of the Issuing Lender to issue the Letters of Credit are subject to the
condition precedent that the Administrative Agent shall have received on or
before March 27, 1998 (the "Effective Date") each of the following, in form and
substance satisfactory to the Administrative Agent and its counsel:
(a) counterparts of this Agreement duly executed by each of Micro
Warehouse, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders and
the Administrative Agent;
(b) new Revolving Credit Notes executed by each of Micro Warehouse
and Micro Warehouse Limited;
31
(c) certificates of the Secretary or Assistant Secretary of each of
the Obligors, dated the Effective Date, (i) attesting to all corporate action
taken by such Obligor, including resolutions of its Board of Directors
authorizing the execution, delivery and performance of each of the Facility
Documents to which it is a party and each other document to be delivered
pursuant to this Agreement, (ii) certifying the names and true signatures of the
officers of such Obligor authorized to sign the Facility Documents to which it
is a party and the other documents to be delivered by such Obligor under this
Agreement and (iii) verifying that the charter and by-laws (or other analogous
documents) of such Obligor attached thereto are true, correct and complete as of
the date thereof;
(d) an opinion of Lev, Berlin & Xxxx, P.C., outside counsel to each
of the Consolidated Entities, dated the Effective Date, in substantially the
form of Exhibit A and as to such other matters as the Administrative Agent or
any Lender may reasonably request;
(e) an opinion of Courts & Co, United Kingdom counsel to Micro
Warehouse Limited, dated the Effective Date, in substantially the form of
Exhibit B; and
(f) certified complete and correct copies of all financial
statements described in Section 6.05 (including, without limitation, the 1998
budget of the Consolidated Entities dated March 13, 1998).
Section 5.2. Additional Conditions Precedent. The obligations of the
Lenders to make any Revolving Credit Loans pursuant to a borrowing which
increases the amount outstanding hereunder (including the initial borrowing) and
of the Issuing Lender to issue any Letters of Credit shall be subject to the
further conditions precedent that on the date of such Revolving Credit Loans or
the issuance of such Letters of Credit: (a) the following statements shall be
true: (i) the representations and warranties contained in Article 6 and in each
of the other Facility Documents are true and correct in all material respects on
and as of the date of such Revolving Credit Loans or the issuance of such Letter
of Credit as though made on and as of such date; and (ii) no Default or Event of
Default has occurred and is continuing, or would result from such Revolving
Credit Loans or the issuance of such Letters of Credit; (b) the Administrative
Agent shall have received such independent appraisals, audits and valuations of
assets reasonably satisfactory to the Administrative Agent as the Administrative
Agent may reasonably request; and (c) the Administrative Agent shall have
received such approvals, opinions or documents as the Administrative Agent may
reasonably request.
Section 5.3. Deemed Representations. Each notice of borrowing or request
for the issuance of a Letter of Credit hereunder and acceptance by any Borrower
of the proceeds of such borrowing or the benefit of such Letter of Credit shall
constitute a representation and warranty that the statements contained in
Section 5.02 are true
32
and correct both on the date of such notice and, unless such Borrower otherwise
notifies the Administrative Agent prior to such borrowing or issuance, as of the
date of such borrowing or issuance.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
Each of the Obligors (as to itself and its Subsidiaries) hereby represents
and warrants that:
Section 6.1. Incorporation, Good Standing and Due Qualification. Each of
the Consolidated Entities is duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its assets and to transact the business in
which it is now engaged or proposed to be engaged, and is duly qualified as a
foreign corporation and in good standing under the laws of each other
jurisdiction in which such qualification is required.
Section 6.2. Corporate Power and Authority; No Conflicts. The execution,
delivery and performance by each of the Obligors of the Facility Documents to
which it is a party, the borrowings hereunder and the issuance of the Letters of
Credit have been duly authorized by all necessary corporate action and do not
and will not: (a) require any consent or approval of its stockholders (other
than with respect to Micro Warehouse France SARL, T.D. S.A. and T.D. 2 S.A.);
(b) contravene its charter or by-laws; (c) violate any provision of, or require
any filing, registration, consent or approval under, any law, rule, regulation
(including, without limitation, any exchange control law or regulation), order,
writ, judgment, injunction, decree, determination or award presently in effect
having applicability to any Consolidated Entity; (d) result in a breach of or
constitute a default or require any consent under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which any
Consolidated Entity is a party or by which it or its Properties may be bound or
affected; (e) result in, or require, the creation or imposition of any Lien,
upon or with respect to any of the Properties now owned or hereafter acquired by
any Consolidated Entity; or (f) cause any Consolidated Entity to be in default
under any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or instrument.
Section 6.3. Legally Enforceable Agreements. Each Facility Document to
which any Obligor is a party is, or when delivered under this Agreement will be,
a legal, valid and binding obligation of such Obligor enforceable against such
Obligor in accordance with its terms, except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally.
Section 6.4. Litigation. Except as otherwise disclosed in the financial
statements described in Section 6.05(a), there are no actions, suits or
proceedings pending or, to the knowledge of any Obligor, threatened, against or
affecting any
33
Consolidated Entity before any Governmental Authority which could reasonably be
expected to have a Material Adverse Effect.
Section 6.5. Financial Statements.
(a) The consolidated and consolidating balance sheets of the
Consolidated Entities as at December 31, 1996, 1995 and 1994, and the related
consolidated and consolidating income statements and statements of cash flows
and changes in stockholders' equity of the Consolidated Entities for the Fiscal
Years then ended, and the accompanying footnotes, together with the opinion on
the consolidated statements of KPMG Peat Marwick, independent certified public
accountants, and the interim consolidated and consolidating balance sheets as at
September 30, 1997 and the related consolidated and consolidating income
statements and statements of cash flows and changes in stockholders' equity of
the Consolidated Entities for the nine month period then ended, copies of which
have been furnished to each of the Lenders, are complete and correct and fairly
present the financial condition of the Consolidated Entities at such dates and
the results of the operations of the Consolidated Entities for the periods
covered by such statements, all in accordance with GAAP consistently applied.
(b) The operating plan for the Consolidated Entities for the current
and subsequent Fiscal Years, including budget, personnel, facilities and Capital
Expenditure projections, on a quarterly basis, and projected income and cash
flow statements for each such Fiscal Year, on a quarterly basis, incorporating
the items detailed in such operating plan for each such Fiscal Year, and
accompanied by a description of the material assumptions used in making such
operating plan, have each been prepared in good faith and are based on
reasonable estimates for the operating performance of the Consolidated Entities
on and after the Closing Date.
(c) Except as set forth on the consolidated balance sheet of the
Consolidated Entities as at December 31, 1996, there are no liabilities of any
Consolidated Entity, fixed or contingent, which are material but are not
reflected in the financial statements or in the notes thereto and which would be
required to be recorded in such financial statements or notes in accordance with
GAAP. No written information, exhibit or report furnished by any Consolidated
Entity to the Lenders in connection with the negotiation of this Agreement
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not materially
misleading in each case as determined as of the date of the provision of such
information, exhibit or report. Since December 31, 1997, there has been no
change which could reasonably be expected to have a Material Adverse Effect.
Section 6.6. Ownership and Liens. Each of the Consolidated Entities has
title to, or valid leasehold interests in, all of its Properties, including the
Properties reflected in the financial statements referred to in Section 6.05
(other than any Properties disposed of in the ordinary course of business), and
none of the Properties owned by
34
any Consolidated Entity and none of its leasehold interests is subject to any
Lien, except as may be permitted hereunder.
Section 6.7. Taxes. Each of the Consolidated Entities has filed (or
obtained extensions for) all tax returns (domestic, foreign, federal, state and
local) required to be filed and has paid all taxes, assessments and governmental
charges and levies shown thereon to be due, including interest and penalties.
The charges, accruals and reserves on the books of the Consolidated Entities in
respect of taxes, assessments and other governmental charges are adequate.
Section 6.8. ERISA. Each Domestic Plan, Foreign Plan and, to the best
knowledge of each Obligor, Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in compliance
with, the applicable provisions of ERISA, the Code and any other applicable
domestic, foreign, federal, state or local law, and no event or condition is
occurring or exists concerning which any Consolidated Entity would be under an
obligation to furnish a report to the Lenders in accordance with Section 7.08(j)
hereof. Each of the Consolidated Entities and the ERISA Affiliates have
fulfilled its obligations under the minimum funding standards of ERISA, the Code
and any other applicable domestic, foreign, federal, state or local law.
Section 6.9. Consolidated Entities and Affiliates. Schedule II sets forth
the name of each Consolidated Entity and each Affiliate, in each case showing
(a) the jurisdiction of its incorporation, (b) the percentage of each Person's
ownership of the outstanding capital stock of such Consolidated Entity or such
Affiliate and (c) its business and primary geographic scope of operation. All of
the outstanding shares of capital stock of each Consolidated Entity are validly
issued, fully paid and nonassessable, and all such shares are owned free and
clear of all Liens. Except as set forth on Schedule II, no Consolidated Entity
owns or holds the right to acquire any shares of stock or any other security or
interest in any other Person.
Section 6.10. Credit Arrangements. Schedule III is a complete and correct
list of all credit agreements, indentures, note purchase agreements, guaranties,
Capital Leases and other investments, agreements and arrangements presently in
effect providing for or relating to extensions of credit (including agreements
and arrangements for the issuance of letters of credit or for acceptance
financing) in respect of which any Consolidated Entity is in any manner directly
or contingently obligated; and the maximum principal or face amounts of the
credit in question, outstanding and which can be outstanding, are correctly
stated, and all Liens of any nature given or agreed to be given as security
therefor are correctly described or indicated in such Schedule.
35
Section 6.11. Operation of Business. Each of the Consolidated Entities
possesses all licenses, permits, franchises, patents, copyrights, trademarks and
trade names, or rights thereto, to conduct its business substantially as now
conducted and as presently proposed to be conducted, and no Consolidated Entity
is in material violation of any valid rights of others with respect to any of
the foregoing.
Section 6.12. Hazardous Materials. Each of the Consolidated Entities is in
compliance in all material respects with all Environmental Laws in effect in
each jurisdiction where it is presently doing business. No Consolidated Entity
is subject to any material liability under any Environmental Law.
In addition, no Consolidated Entity has received any (i) notice from any
Governmental Authority by which any of its present or previously-owned or leased
real Properties has been designated, listed, or identified in any manner by any
Governmental Authority charged with administering or enforcing any Environmental
Law as a Hazardous Material disposal or removal site, "Super Fund" clean-up
site, or candidate for removal of Hazardous Materials or closure of a Hazardous
Material disposal site pursuant to any Environmental Law, (ii) notice of any
Lien arising under or in connection with any Environmental Law that has attached
to any revenues of, or to, any of its owned or leased real Properties, or (iii)
summons, citation, notice, directive, letter, or other written communication
from any Governmental Authority concerning any intentional or unintentional
action or omission by such Consolidated Entity in connection with its ownership
or leasing of any real Property resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, dumping, or otherwise disposing of any
Hazardous Material into the environment resulting in any violation of any
Environmental Law.
Section 6.13. No Default on Outstanding Judgments or Orders. Each of the
Consolidated Entities has satisfied all judgments and no Consolidated Entity is
in default with respect to any final judgment, writ, injunction or decree of any
Governmental Authority.
Section 6.14. No Defaults on Other Agreements. No Consolidated Entity is a
party to any indenture, loan or credit agreement or any lease or other agreement
or instrument or subject to any charter or corporate restriction which could
have a Material Adverse Effect. No Consolidated Entity is in default in any
material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument
material to its business to which it is a party.
Section 6.15. Labor Disputes and Acts of God. Neither the business nor the
Properties of any Consolidated Entity are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), which could have a Material Adverse
Effect.
36
Section 6.16. Governmental Regulation. No Consolidated Entity is subject
to regulation under the Public Utility Holding Company Act of 1935, the
Investment Company Act of 1940, the Interstate Commerce Act, the Federal Power
Act or any statute or regulation limiting its ability to incur indebtedness for
money borrowed as contemplated hereby.
Section 6.17. No Forfeiture. Neither any Consolidated Entity nor any of
its Affiliates is engaged in or proposes to be engaged in the conduct of any
business or activity which could result in a Forfeiture Proceeding which could
reasonably be expected to have a Material Adverse Effect and no Forfeiture
Proceeding against any of them is pending or threatened.
Section 6.18. Solvency.
(a) The present fair saleable value of the assets of each Obligor
after giving effect to all the transactions contemplated by the Facility
Documents and the funding of the Revolving Credit Commitments and the issuance
of the Letters of Credit hereunder exceeds the amount that will be required to
be paid on or in respect of the existing debts and other liabilities (including
contingent liabilities) of such Obligor as they mature.
(b) The Property of each Obligor does not constitute unreasonably
small capital for such Obligor to carry out its business as now conducted and as
proposed to be conducted including the capital needs of such Obligor.
(c) No Obligor intends to, nor does such Obligor believe that it
will, incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be received by such Obligor, and
of amounts to be payable on or in respect of Debt of such Obligor). The cash
available to such Obligor after taking into account all other anticipated uses
of the cash of such Obligor, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of such Obligor when such amounts are required
to be paid.
(d) No Obligor believes that final judgments against it in actions
for money damages will be rendered at a time when, or in an amount such that,
such Obligor will be unable to satisfy any such judgments promptly in accordance
with their terms (taking into account the maximum reasonable amount of such
judgments in any such actions and the earliest reasonable time at which such
judgments might be rendered). The cash available to such Obligor after taking
into account all other anticipated uses of the cash of such Obligor (including
the payments on or in respect of debt referred to in paragraph (c) of this
Section 6.18), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
ARTICLE 7. AFFIRMATIVE COVENANTS.
37
So long as any Obligation shall remain unpaid, any Letter of Credit shall
remain outstanding or any Lender shall have any Revolving Credit Commitment,
Micro Warehouse shall:
Section 7.1. Maintenance of Existence. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its corporate existence and
good standing in the jurisdiction of its incorporation, and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is required.
Section 7.2. Conduct of Business. Continue, and cause each of its
Subsidiaries to continue, to engage in the business of the same general type as
conducted by it on the date of this Agreement.
Section 7.3. Maintenance of Properties. Maintain, keep and preserve, and
cause each of its Subsidiaries to maintain, keep and preserve, all of its
Properties necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted.
Section 7.4. Maintenance of Records. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, in which complete
entries will be made in accordance with GAAP, reflecting all financial
transactions of the Consolidated Entities.
Section 7.5. Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same or a similar business and
similarly situated, which insurance may provide for reasonable deductibility
from coverage thereof.
Section 7.6. Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (including, without limitation, any Environmental
Law), such compliance to include, without limitation, paying before the same
become delinquent all taxes, assessments and governmental charges imposed upon
it or upon its Properties.
Section 7.7. Right of Inspection. At any reasonable time and from time to
time permit the Administrative Agent or any Lender or any agent or
representative thereof, to examine and make copies and abstracts from the
records and books of account of, and visit the Properties of, any Consolidated
Entity, and to discuss the affairs, finances and accounts of such Consolidated
Entity with any of their respective officers and directors and independent
accountants.
Section 7.8. Reporting Requirements. Furnish directly to each of the
Lenders:
38
(a) as soon as available and in any event within 90 days after the
end of each Fiscal Year, consolidated and consolidating balance sheets of the
Consolidated Entities as of the end of such Fiscal Year and consolidated and
consolidating income statements and statements of cash flows and changes in
stockholders' equity of the Consolidated Entities for such Fiscal Year, all in
reasonable detail and stating in comparative form the respective figures for the
corresponding date and period in the prior Fiscal Year and all prepared in
accordance with GAAP and as to the consolidated statements accompanied by an
opinion thereon acceptable to the Administrative Agent and each of the Lenders
by KPMG Peat Marwick or other independent accountants of national standing
selected by the Consolidated Entities; provided that delivery within the period
specified above of copies of the Annual Report on Form 10-K of Micro Warehouse
filed with the Securities and Exchange Commission, together with the adjustments
to such consolidated statements necessary to provide consolidating information
for each of the Consolidated Entities, shall be deemed to satisfy the
requirements of this Section 7.08(a) so long as such Form 10-K as so adjusted
shall contain the information referred to in this Section 7.08(a);
(b) as soon as available and in any event within 45 days after the
end of each of the first three Fiscal Quarters, consolidated and consolidating
balance sheet of the Consolidated Entities as of the end of such Fiscal Quarter
and consolidated and consolidating income statements and statements of cash
flows and changes in stockholders' equity of the Consolidated Entities for the
period commencing at the end of the previous Fiscal Year and ending with the end
of such Fiscal Quarter, all in reasonable detail and stating in comparative form
the respective consolidated figures for the corresponding date and period in the
previous Fiscal Year and all prepared in accordance with GAAP and certified by
the chief financial officer of the Consolidated Entities (subject to year-end
adjustments); provided that delivery within the period specified above of copies
of the Quarterly Report on Form 10-Q of Micro Warehouse filed with the
Securities and Exchange Commission, together with the adjustments to such
consolidated statements necessary to provide consolidating information for each
of the Consolidated Entities, shall be deemed to satisfy the requirements of
this Section 7.08(b) so long as such Form 10-Q as so adjusted shall contain the
information referred to in this Section 7.08(b);
(c) simultaneously with the delivery of the financial statements
referred to above, a Compliance Certificate of the chief financial officer of
Micro Warehouse (i) certifying that to the best of his knowledge no Default or
Event of Default has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action which is proposed to be taken with respect thereto, and (ii) with
computations demonstrating compliance with the covenants contained in Article 9;
(d) simultaneously with the delivery of the annual financial
statements referred to in Section 7.08(a), a certificate of the independent
public accountants who audited such statements to the effect that, in making the
39
examination necessary for the audit of such statements, they have obtained no
knowledge of any condition or event which constitutes a Default or Event of
Default, or if such accountants shall have obtained knowledge of any such
condition or event, specifying in such certificate each such condition or event
of which they have knowledge and the nature and status thereof;
(e) simultaneously with the delivery of the financial statements
referred to in Section 7.08(a) and Section 7.08(b), a narrative explanation
signed by the chief financial officer of Micro Warehouse of any material
variance from the budget of the Consolidated Entities for the Fiscal Year that
is reflected in such financial statements;
(f) not later than the 30th day subsequent to the commencement of
each Fiscal Year, (i) a projected balance sheet of the Consolidated Entities for
such Fiscal Year on a quarterly basis and (ii) an operating plan for the
Consolidated Entities for such Fiscal Year, including budget, personnel,
facilities and Capital Expenditure projections, on a quarterly basis, and a
projected income and cash flows statement for such Fiscal Year, on a quarterly
basis, incorporating the items detailed in such operating plan for such Fiscal
Year, and accompanied by a description of the material assumptions used in
making such operating plan; and, as soon as available thereafter, any
modifications to any of the foregoing after the Board of Directors of Micro
Warehouse has reviewed such plan;
(g) promptly after the commencement thereof, notice of all actions,
suits, and proceedings before any Governmental Authority;
(h) as soon as possible and in any event within 10 days after
becoming aware of or having reason to become aware of the occurrence of each
Default or Event of Default a written notice setting forth the details of such
Default or Event of Default and the action which is proposed to be taken by the
Consolidated Entities with respect thereto;
(i) as soon as possible, and in any event within 10 days after any
Consolidated Entity knows or has reason to know that any of the events or
conditions specified below with respect to any Domestic Plan, Foreign Plan or
Multiemployer Plan have occurred or exist, a statement signed by a senior
financial officer of such Consolidated Entity setting forth details respecting
such event or condition and the action, if any, which such Consolidated Entity
or an ERISA Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC or any other
Governmental Authority by such Consolidated Entity or an ERISA Affiliate with
respect to such event or condition): (i) any reportable event, as defined in
Section 4043(b) of ERISA, with respect to a Domestic Plan, as to which PBGC has
not 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 that a failure
to meet the minimum funding standard of Section 412 of the Code or Section 302
of
40
ERISA including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or Section 302(e)
of ERISA, shall be a reportable event regardless of the issuance of any waivers
in accordance with Section 412(d) of the Code) and any request for a waiver
under Section 412(d) of the Code for any Domestic Plan; (ii) the distribution
under Section 4041 of ERISA or under any similar foreign law of a notice of
intent to terminate any Domestic Plan or Foreign Plan or any action taken by
such Consolidated Entity or an ERISA Affiliate to terminate any Domestic Plan or
Foreign Plan; (iii) the institution by PBGC or any other Governmental Authority
of proceedings under Section 4042 of ERISA or under any similar foreign law for
the termination of, or the appointment of a trustee to administer, any Domestic
Plan or any Foreign Plan, or the receipt by such Consolidated Entity or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action has been
taken by PBGC with respect to such Multiemployer Plan; (iv) the complete or
partial withdrawal from a Multiemployer Plan by such Consolidated Entity or any
ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a result of a
purchaser default) or the receipt of such Consolidated Entity or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA; (v) the institution of
a proceeding by a fiduciary or any Multiemployer Plan against such Consolidated
Entity or any ERISA Affiliate to enforce Section 515 of ERISA, which proceeding
is not dismissed within 30 days; (vi) the adoption of an amendment to any
Domestic Plan that pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA would result in the loss of tax-exempt status of the trust of which such
Domestic Plan is a part if such Consolidated Entity or an ERISA Affiliate fails
to timely provide security to the Domestic Plan in accordance with the
provisions of said Sections; (vii) any event or circumstance exists which may
reasonably be expected to constitute grounds for such Consolidated Entity or any
ERISA Affiliate to incur liability under Title IV of ERISA or under Sections
412(c)(11) or 412(n) of the Code with respect to any Domestic Plan; and (viii)
the Unfunded Benefit Liabilities of one or more Domestic Plans and Foreign Plans
increase after the date of this Agreement in an amount which is material in
relation to the financial condition of the Consolidated Entities; provided,
however, that such increase shall not be deemed to be material so long as it
does not exceed during any consecutive 3 year period $1,000,000;
(j) promptly after the request of any Lender, copies of each annual
report filed pursuant to Section 104 of ERISA with respect to each Domestic Plan
(including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each Domestic Plan under Section 4065 of
ERISA; provided, however, that in the case of a Multiemployer Plan, such annual
reports shall be furnished only if they are available to such Consolidated
Entity or an ERISA Affiliate;
41
(k) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which any Consolidated Entity
sends to its stockholders, and copies of all regular, periodic and special
reports, and all registration statements which such Consolidated Entity files
with the Securities and Exchange Commission or any Governmental Authority which
may be substituted therefor, or with any national securities exchange;
(l) promptly after becoming aware of the existence of any violation
or alleged violation in any material respect of any Environmental Law by any
Consolidated Entity, written notice of and a description of the nature of such
violation or alleged violation, what action such Consolidated Entity is taking
or proposes to take with respect thereto and, when known, any action taken, or
proposed to be taken, by any Governmental Authority with respect thereto;
(m) promptly after the commencement thereof or promptly after any
Consolidated Entity knows of the commencement or threat thereof, notice of any
Forfeiture Proceeding; and
(n) such other information respecting the condition or operations,
financial or otherwise, of any Consolidated Entity as the Administrative Agent
or any Lender may from time to time reasonably request.
Section 7.09. Additional Subsidiary Guarantors. In the event that any of
its Subsidiaries that is not an Obligor as of the date hereof shall have assets
greater than $500,000 (as determined as of the end of each Fiscal Quarter),
cause such Subsidiary to become a "Subsidiary Guarantor" and thereby an
"Obligor" hereunder pursuant to an Assumption Agreement, and shall deliver such
proof of corporate action, incumbency of officers, opinions of counsel and other
documents as is consistent with those delivered by the Obligors pursuant to
Article 5 of the Existing Credit Agreement upon the Closing Date or as the
Administrative Agent shall have reasonably requested.
ARTICLE 8. NEGATIVE COVENANTS.
So long as any Obligation shall remain unpaid, any Letter of Credit shall
remain outstanding or any Lender shall have any Revolving Credit Commitment,
Micro Warehouse shall not:
Section 8.1. Debt. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Debt,
except:
(a) Debt of the Obligors under this Agreement, the Revolving Credit
Notes, the Letters of Credit and the other Facility Documents;
(b) Consolidated Subordinated Debt;
42
(c) Debt described on Schedule III but no renewals, extensions or
refinancings thereof;
(d) Debt consisting of Guaranties permitted pursuant to Section
8.02;
(e) Debt of any Obligor to any other Obligor incurred in the
ordinary course of business and either consistent with past practices or for
cash management services;
(f) accounts payable to trade creditors for goods or services and
current operating liabilities (other than for borrowed money), in each case
incurred in the ordinary course of business and paid within prescribed time
limits that are in the ordinary course of business, unless contested in good
faith and by appropriate proceedings;
(g) Debt of any Consolidated Entity secured by Purchase Money Liens
permitted by Section 8.03(j) provided that the aggregate principal amount of
such Debt together with all Debt secured by Purchase Money Liens described on
Schedule III (other than Debt owing to Apple Computer, Inc. for the purchase of
inventory) does not at any time exceed $5,000,000;
(h) Debt of any Consolidated Entity under interest rate protection
agreements, foreign currency exchange agreements and other interest and exchange
rate arrangements so long as the "aggregate net exposure" (conclusively presumed
to be equal to 20% of the aggregate notional principal amount) under all such
arrangements does not at any time exceed $5,000,000; and
(i) Debt of Micro Warehouse Canada Limited so long as the aggregate
principal amount of such Debt does not at any time exceed $5,000,000.
Section 8.2. Guaranties. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Guaranty, except (a) the Unconditional Guaranties by the Guarantors hereunder,
(b) Guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business and (c)
Guaranties by Micro Warehouse of obligations owed by any of its Subsidiaries to
trade vendors that have been incurred in the ordinary course of business.
Section 8.3. Liens. Create, incur, assume or suffer to exist any Lien, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, upon
or with respect to any of its Property, now owned or hereafter acquired, except:
43
(a) Liens in favor of the Administrative Agent on behalf of the
Lenders securing the Revolving Credit Loans and the Letter of Credit Obligations
hereunder;
(b) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 90 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment insurance,
social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(f) judgment and other similar Liens arising in connection with
court proceedings; provided that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by any Consolidated Entity of the Property
encumbered thereby in the normal course of its business or materially impair the
value of the Property subject thereto;
(h) Liens securing obligations of any Obligor to any other Obligor;
(i) Liens described on Schedule III provided that such Liens shall
secure only those obligations which they secure on the date hereof; and
(j) Purchase Money Liens; provided that:
(i) any Property subject to any of the foregoing is acquired
by any Consolidated Entity in the ordinary course of its business and the Lien
on any such Property is created contemporaneously with such acquisition;
44
(ii) the obligation secured by any Lien so created, assumed or
existing shall not exceed 100% of the lesser of cost or fair market value as of
the time of acquisition of the Property covered thereby to such Consolidated
Entity acquiring the same;
(iii) each such Lien shall attach only to the Property so
acquired and fixed improvements thereon; and
(iv) the obligations secured by such Lien are permitted by the
provisions of Section 8.01(g) and the related expenditure is permitted under
Section 8.13.
Section 8.4. Leases. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal Property,
except:
(a) leases existing on the date of this Agreement and any extensions
or renewals thereof;
(b) Capital Leases permitted by Section 8.01, Section 8.03 and
Section 8.13; and
(c) leases (other than Capital Leases) so long as the Consolidated
Entities are not required on a consolidated basis to make payments (including
taxes, insurance, maintenance and similar expense which any Consolidated Entity
is required to pay under the terms of any lease) in the aggregate under all
leases (other than Capital Leases) in any Fiscal Year in excess of $20,000,000.
Section 8.5. Investments. Make, or permit any of its Subsidiaries to make,
any Investment, except for:
(a) Investments in Domestic Cash Equivalents and Foreign Cash
Equivalents;
(b) Investments in Property to be used or useful in the ordinary
course of business of the Consolidated Entities;
(c) Investments in stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to any
Consolidated Entity;
(d) Investments to or in any Obligor or in any corporation that
concurrently with such Investment becomes an Obligor;
45
(e) Investments made in connection with an Acceptable Acquisition;
and
(f) other Investments not listed in clauses (a) through (e),
inclusive, provided that the aggregate amount of such Investments for all
Consolidated Entities does not exceed at any time $5,000,000.
Section 8.6. Distributions. Make, or permit any of its Subsidiaries to
make, any Distribution, except that:
(a) Micro Warehouse may make Distributions payable solely in its
common stock;
(b) any Consolidated Entity may make Distributions to any Obligor;
and
(c) so long as no Default or Event of Default would exist after
giving effect to such redemption, Micro Warehouse may redeem shares of its
capital stock in an amount not to exceed $30,000,000 in the aggregate during the
period from the Effective Date to the Revolving Credit Termination Date.
Section 8.7. Sale of Assets. Sell, lease, assign, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, assign, transfer
or otherwise dispose of, any of its now owned or hereafter acquired Property
(including, without limitation, shares of stock and indebtedness, receivables
and leasehold interests); except:
(a) for inventory disposed of in the ordinary course of business;
(b) the sale or other disposition of Property no longer used or
useful in the conduct of its business;
(c) any Consolidated Entity may sell, lease, assign, or otherwise
transfer its Property to any Obligor; and
(d) so long as no Default or Event of Default exists or would exist
after giving effect to such disposition, the sale or other disposition of
Property pursuant to the Restructuring Plan.
Section 8.8. Subsidiary Capital Stock. (a) Sell or otherwise dispose of
any shares of capital stock of any of its Subsidiaries, except (i) so long as no
Default or Event of Default would exist after giving effect to such disposition,
the sale or other disposition of shares of Subsidiaries pursuant to the
Restructuring Plan (provided that if such disposition involves shares of a
Subsidiary Borrower, all Debt under the Revolving Credit Notes of such
Subsidiary Borrower shall have been paid in full and all Revolving Credit
Commitments to such Subsidiary Borrower shall have been
46
terminated) and (ii) in a transaction permitted by Section 8.10(a), or (b)
permit any such Subsidiary to issue any additional shares of its capital stock,
except (i) directors' qualifying shares and (ii) to Micro Warehouse or any
Wholly-Owned Subsidiary.
Section 8.9. Transactions with Affiliates. Enter, or permit any Subsidiary
to enter, into any transaction, including, without limitation, the purchase,
sale or exchange of Property or the rendering of any service, with any
Affiliate, except in the ordinary course of and pursuant to the reasonable
requirements of Micro Warehouse's or such Subsidiary's business and upon fair
and reasonable terms no less favorable to Micro Warehouse or such Subsidiary
than would obtain in a comparable arm's length transaction with a Person not an
Affiliate.
Section 8.10. Mergers, Etc. Merge or consolidate with, or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or acquire all or substantially all of the
assets or the business of any Person (or enter into any agreement to do any of
the foregoing), or permit any of its Subsidiaries to do so, except that:
(a) any Consolidated Entity may merge into or consolidate with or
transfer assets to any Obligor; and
(b) any Consolidated Entity may effect any Acquisition permitted by
Section 8.11.
Section 8.11. Acquisitions. Make, or permit any of its Subsidiaries to
make, any Acquisition other than an Acceptable Acquisition.
Section 8.12. No Activities Leading to Forfeiture. Engage in or propose to
be engaged in, or permit any of its Subsidiaries to engage in or propose to be
engaged in, the conduct of any business or activity which could result in a
Forfeiture Proceeding which could have a Material Adverse Effect.
Section 8.13. Capital Expenditures. Make or commit to make, or permit any
of its Subsidiaries to make or commit to make, (other than by way of
Acquisition) any expenditures in respect of the purchase or other acquisition of
fixed or capital assets, except for Consolidated Capital Expenditures in the
ordinary course of business not exceeding $27,000,000 in any Fiscal Year.
Section 8.14. Restrictions. Enter into, or suffer to exist, or permit any
of its Subsidiaries to enter into, or suffer to exist, any agreement with any
Person other than the Lenders that (a) prohibits, requires the consent of such
Person for or limits the ability of (i) any Consolidated Entity to pay dividends
or make other distributions or pay Debt owed to any other Consolidated Entity,
make loans or advances to any other Consolidated Entity or transfer any of its
Property to any other Consolidated Entity, (ii)
47
any Consolidated Entity to create, incur, assume or suffer to exist any Lien
upon any of its Property or (iii) any Consolidated Entity to enter into any
modification or supplement of the Facility Documents; or (b) contains financial
covenants which, taken as a whole, are more restrictive on the Consolidated
Entities than the financial covenants contained in Article 9.
Section 8.15. Fiscal Year. Permit the fiscal year of the Consolidated
Entities to end on a day other than December 31.
ARTICLE 9. FINANCIAL COVENANTS.
So long as any Obligation shall remain unpaid, any Letter of Credit shall
remain outstanding or any Lender shall have any Revolving Credit Commitment and
as determined as of the end of each Fiscal Quarter:
Section 9.1. Interest Coverage Ratio. Micro Warehouse shall maintain at
all times an Interest Coverage Ratio of not less than 3.00 to 1.00.
Section 9.2. Minimum Tangible Net Worth. Micro Warehouse shall maintain at
all times Consolidated Tangible Net Worth of not less than the sum of (a)
$175,000,000 plus (b) the aggregate sum of the Fiscal Year Net Worth Increase
Amounts calculated for each Fiscal Year ending on or after the Closing Date.
Section 9.3. Leverage Ratio. Micro Warehouse shall maintain at all times a
Leverage Ratio of not greater than 1.00 to 1.00.
Section 9.4. Current Ratio. Micro Warehouse shall maintain at all times a
Current Ratio of not less than 1.50 to 1.00.
Section 9.5. Domestic Net Worth. Micro Warehouse shall maintain at all
times a Domestic Net Worth of not less than $150,000,000.
ARTICLE 10. EVENTS OF DEFAULT.
Section 10.1. Events of Default. Any of the following events shall be an
"Event of Default":
(a) any Borrower shall: (i) fail to pay the principal of any
Revolving Credit Note or any Reimbursement Obligation on or before the date when
due and payable; or (ii) fail to pay interest on any Revolving Credit Note or
any fee or other amount due hereunder on or before the date when due and
payable;
(b) any representation or warranty made or deemed made by any
Consolidated Entity in this Agreement or in any other Facility Document or which
is contained in any certificate, document, opinion, financial or other statement
furnished
48
at any time under or in connection with any Facility Document shall prove to
have been incorrect in any material respect on or as of the date made;
(c) (i) any Obligor shall fail to perform or observe any term,
covenant or agreement contained in Section 2.03 or 3.02 or Articles 8 or 9; or
(ii) any Obligor shall fail to perform or observe any term, covenant or
agreement on its part to be performed or observed (other than the obligations
specifically referred to elsewhere in this Section 10.01) in any Facility
Document to which it is a party and such failure shall continue for 30
consecutive days;
(d) any Consolidated Entity shall: (i) fail to pay any indebtedness
in excess of $1,000,000 (other than the payment obligations described in (a)
above), or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); (ii) fail to
perform or observe any term, covenant or condition on its part to be performed
or observed under any agreement or instrument relating to any such indebtedness,
when required to be performed or observed, if the effect of such failure to
perform or observe is to accelerate, or to permit the acceleration of, after the
giving of notice or passage of time, or both, the maturity of such indebtedness,
whether or not such failure to perform or observe shall be waived by the holder
of such indebtedness; or any such indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) any Consolidated Entity: (i) shall generally not, or be unable
to, or shall admit in writing its inability to, pay its debts as such debts
become due; or (ii) shall make an assignment for the benefit of creditors,
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets; or (iii) shall commence
any proceeding under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect; or (iv) shall have had any such petition or
application filed or any such proceeding shall have been commenced, against it,
in which an adjudication or appointment is made or order for relief is entered,
or which petition, application or proceeding remains undismissed for a period of
30 days or more; or shall be the subject of any proceeding under which its
assets may be subject to seizure, forfeiture or divestiture (other than a
proceeding in respect of a Lien permitted under Section 8.03(b)); or (v) by any
act or omission shall indicate its consent to, approval of or acquiescence in
any such petition, application or proceeding or order for relief or the
appointment of a custodian, receiver or trustee for all or any substantial part
of its Property; or (vi) shall suffer any such custodianship, receivership or
trusteeship to continue undischarged for a period of 30 days or more;
(f) one or more judgments, decrees or orders for the payment of
money in excess of $1,000,000 in the aggregate shall be rendered against any
Consolidated Entity and such judgments, decrees or orders shall continue
unsatisfied
49
and in effect for a period of 30 consecutive days without being vacated,
discharged, satisfied or stayed or bonded pending appeal;
(g) any event or condition shall occur or exist with respect to any
Domestic Plan, Foreign Plan or Multiemployer Plan concerning which any
Consolidated Entity is under an obligation to furnish a report to the Lenders in
accordance with Section 7.08(j) hereof and as a result of such event or
condition, together with all other such events or conditions, such Consolidated
Entity or any ERISA Affiliate has incurred or in the opinion of the Lenders is
reasonably likely to incur a liability to a Domestic Plan, a Foreign Plan, a
Multiemployer Plan, the PBGC, a Section 4042 Trustee or any other Governmental
Authority (or any combination of the foregoing) which is material in relation to
the financial position of the Consolidated Entities; provided, however, that any
such amount shall not be deemed to be material so long as all such amounts do
not exceed $1,000,000 in the aggregate during the term of this Agreement;
(h) the Unfunded Benefit Liabilities of one or more Domestic Plans
or Foreign Plans have increased after the date of this Agreement in an amount
which is material (as specified in Section 7.08(j)(viii) hereof);
(i) (i) any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rules 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of
10% or more of the outstanding shares of voting capital stock of Micro
Warehouse; or (ii) during any period of 12 consecutive months, commencing before
or after the date of this Agreement, individuals who at the beginning of such
12-month period were directors (or persons nominated by such individuals) of
Micro Warehouse cease for any reason to constitute a majority of the Board of
Directors of Micro Warehouse; or
(j) any Forfeiture Proceeding shall have been commenced or any
Consolidated Entity shall have given any Lender written notice of the
commencement of any Forfeiture Proceeding as provided in Section 7.08(n) which,
in either case, could reasonably be expected to have a Material Adverse Effect.
Section 10.2. Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent shall, upon request of the Required
Lenders, by notice to Micro Warehouse (a) declare the Revolving Credit
Commitments to be terminated, whereupon the same shall forthwith terminate and
so shall the obligations of the Issuing Lender to issue any Letter of Credit,
(b) declare the outstanding principal of any or all of the Revolving Credit
Notes, all interest thereon and all other amounts payable under this Agreement,
the Revolving Credit Notes and the other Facility Documents to be forthwith due
and payable, whereupon such Revolving Credit Notes, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
50
expressly waived by the Borrowers and/or (c) direct Micro Warehouse to pay to
the Administrative Agent an amount, to be held as cash security in the cash
collateral account held by the Administrative Agent under Section 3.08, equal to
the Letter of Credit Obligations then outstanding; provided that, in the case of
an Event of Default referred to in Section 10.01(e) or Section 10.01(i) above,
the Revolving Credit Commitments and the obligation to issue Letters of Credit
shall be immediately terminated, and the Revolving Credit Notes, all interest
thereon and all other amounts payable under this Agreement, the Revolving Credit
Notes and the other Facility Documents shall be immediately due and payable
without notice, presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrowers.
ARTICLE 11. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS.
Guarantied Obligations. (a) Each of (x) the Borrowers other than, in each
of their respective capacities as the primary obligor under the respective
Revolving Credit Note to which it is party and (y) the Subsidiary Guarantors
(each of the foregoing entities individually a "Guarantor" and collectively the
"Guarantors") (but in the case of Micro Warehouse (Deutschland) GmbH, subject to
the limitations of Sections 30 and 31 of the German Act on Limited Liability
Companies), jointly and severally, in consideration of the execution and
delivery of this Agreement by the Lenders and the Administrative Agent, hereby
irrevocably and unconditionally guarantees to the Administrative Agent, for the
benefit of the Lenders, as and for such Guarantor's own debt, until final
payment has been made, the due and punctual payment and performance in full in
cash in the applicable currency of the Obligations (but excluding, with respect
to each Foreign Subsidiary, the Domestic Obligations) (all such obligations so
guarantied are herein collectively referred to as the "Guarantied Obligations"),
in each case when and as the same shall become due and payable, whether at
maturity, pursuant to mandatory or optional prepayment, by acceleration or
otherwise, all in accordance with the terms and provisions hereof and thereof,
it being the intent of the Guarantors that the guaranty set forth in this
Section 11.01 (the "Unconditional Guaranty") shall be a guaranty of payment and
not a guaranty of collection.
(b) As a separate and alternative stipulation, each of the
Guarantors unconditionally and irrevocably agrees that any sum expressed to be
payable by any Guarantor under Section 11.01(a) but which is for any reason
(whether or not now existing and whether or not now known or becoming known to
any party to this Agreement) not recoverable from such Guarantor on the basis of
a guaranty shall nevertheless be recoverable from it as if it were the sole
principal debtor and shall be paid by it to the Administrative Agent, for the
benefit of the Lenders, on demand.
Section 11.2. Performance Under This Agreement. In the event any Borrower
fails to make, on or before the due date thereof, any payment of the Guarantied
Obligations, the Guarantors shall cause forthwith to be paid the moneys, or to
be
51
performed, kept, observed, or fulfilled each of such Guarantied Obligations, in
respect of which such failure has occurred.
Section 11.3. Waivers. To the fullest extent permitted by law, each
Guarantor does hereby waive:
(a) notice of acceptance of the Unconditional Guaranty;
(b) notice of any borrowings under this Agreement, or the creation,
existence or acquisition of any of the Guarantied Obligations, subject to such
Guarantor's right to make inquiry of the Administrative Agent to ascertain the
amount of the Guarantied Obligations at any reasonable time;
(c) notice of the amount of the Guarantied Obligations, subject to
such Guarantor's right to make inquiry of the Administrative Agent to ascertain
the amount of the Guarantied Obligations at any reasonable time;
(d) notice of adverse change in the financial condition of any
Borrower, any other Guarantor or any other fact that might increase such
Guarantor's risk hereunder;
(e) notice of presentment for payment, demand, protest, and notice
thereof as to the Revolving Credit Notes or any other instrument;
(f) notice of any Default or Event of Default;
(g) all other notices and demands to which such Guarantor might
otherwise be entitled (except if such notice or demand is specifically otherwise
required to be given to such Guarantor hereunder or under the other Facility
Documents);
(h) the right by statute or otherwise to require any or each Lender
or the Administrative Agent to institute suit against any Borrower or to exhaust
the rights and remedies of any or each Lender or the Administrative Agent
against any Borrower, such Guarantor being bound to the payment of each and all
Guarantied Obligations, whether now existing or hereafter accruing, as fully as
if such Guarantied Obligations were directly owing to each Lender by such
Guarantor;
(i) any defense arising by reason of any disability or other defense
(other than the defense that the Guarantied Obligations shall have been fully
and finally performed and indefeasibly paid) of any Borrower or by reason of the
cessation from any cause whatsoever of the liability of any Borrower in respect
thereof; and
(j) any stay (except in connection with a pending appeal),
valuation, appraisal, redemption or extension law now or at any time hereafter
in force which, but for this waiver, might be applicable to any sale of Property
of such Guarantor made
52
under any judgment, order or decree based on this Agreement, and such Guarantor
covenants that it will not at any time insist upon or plead, or in any manner
claim or take the benefit or advantage of such law.
Until all of the Guarantied Obligations shall have been paid in full, none of
the Guarantors shall have any right of subrogation, reimbursement, or indemnity
whatsoever in respect thereof and any right of recourse to or with respect to
any assets or Property of any Borrower or any other Guarantor. Nothing shall
discharge or satisfy the obligations of the Guarantors hereunder except the full
and final performance and indefeasible payment of the Guarantied Obligations in
cash in the applicable currency by the Guarantors, upon which each Lender agrees
to transfer and assign its interest in the Revolving Credit Notes to the
Guarantors without recourse, representation or warranty of any kind (other than
that such Lender owns such Revolving Credit Notes and that such Revolving Credit
Notes are free of Liens created by such holder). All of the Guarantied
Obligations shall in the manner and subject to the limitations provided herein
for the acceleration of, the Revolving Credit Notes and the Letter of Credit
Obligations, forthwith become due and payable without notice.
Section 11.4. Releases. Each of the Guarantors consents and agrees that,
without notice to or by such Guarantor and without affecting or impairing the
obligations of such Guarantor hereunder, each Lender or the Administrative
Agent, in the manner provided herein, by action or inaction, may:
(a) compromise or settle, extend the period of duration or the time
for the payment, or discharge the performance of, or may refuse to, or otherwise
not, enforce, or may, by action or inaction, release all or any one or more
parties to, any one or more of the Revolving Credit Notes or the other Facility
Documents;
(b) grant other indulgences to any Borrower in respect thereof;
(c) amend or modify in any manner and at any time (or from time to
time) any one or more of the Revolving Credit Notes, the Letters of Credit and
the other Facility Documents in accordance with Section 13.01 or otherwise;
(d) release or substitute any one or more of the endorsers or
guarantors of the Guarantied Obligations whether parties hereto or not; and
(e) exchange, enforce, waive, or release, by action or inaction, any
security for the Guarantied Obligations (including, without limitation, any of
the collateral therefor) or any other guaranty of any of the Revolving Credit
Notes or the Letter of Credit Obligations.
53
Section 11.5. Marshaling. Each of the Guarantors consents and agrees that:
(a) the Administrative Agent shall be under no obligation to marshal
any assets in favor of such Guarantor or against or in payment of any or all of
the Guarantied Obligations; and
(b) to the extent any Borrower or any other Guarantor makes a
payment or payments to any Lender, which payment or payments or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside, or required, for any of the foregoing reasons or for any other reason, to
be repaid or paid over to a custodian, trustee, receiver, or any other party
under any bankruptcy law, common law, or equitable cause, then to the extent of
such payment or repayment, the obligation or part thereof intended to be
satisfied thereby shall be revived and continued in full force and effect as if
said payment or payments had not been made and such Guarantor shall be primarily
liable for such obligation.
Section 11.6. Liability. Each of the Guarantors agrees that the liability
of such Guarantor in respect of this Article 11 shall not be contingent upon the
exercise or enforcement by any Lender or the Administrative Agent of whatever
remedies such Lender or the Administrative Agent may have against any Borrower
or any other Guarantor or the enforcement of any Lien or realization upon any
security such Lender or the Administrative Agent may at any time possess.
Section 11.7. Unconditional Obligation. The Unconditional Guaranty set
forth in this Article 11 is an absolute, unconditional, continuing and
irrevocable guaranty of payment and performance and shall remain in full force
and effect until the full and final payment of the Guarantied Obligations
without respect to future changes in conditions, including change of law or any
invalidity or irregularity with respect to the issuance or assumption of any
obligations (including, without limitation, the Revolving Credit Notes and the
Letter of Credit Obligations) of or by any Borrower or any other Guarantor, or
with respect to the execution and delivery of any agreement (including, without
limitation, the Revolving Credit Notes and the other Facility Documents) of any
Borrower or any other Guarantor.
Section 11.08. Election to Perform Obligations. Any election by any of the
Guarantors to pay or otherwise perform any of the obligations of any Borrower
under the Revolving Credit Notes or under any of the other Facility Documents,
whether pursuant to this Article 11 or otherwise, shall not release such
Borrower from such obligations or any of its other obligations under the
Revolving Credit Notes or under any of the other Facility Documents.
Section 11.09. No Election. The Administrative Agent shall have the right
to seek recourse against any one or more of the Guarantors to the fullest extent
provided for herein for such Guarantor's obligations under this Agreement
(including, without limitation, this Article 11) in respect of the Revolving
Credit Notes and the Letters of
54
Credit. No election to proceed in one form of action or proceeding, or against
any party, or on any obligation, shall constitute a waiver of the Administrative
Agent's right to proceed in any other form of action or proceeding or against
other parties unless such holder has expressly waived such right in writing.
Specifically, but without limiting the generality of the foregoing, no action or
proceeding by any Lender or the Administrative Agent against any Borrower under
any document or instrument evidencing obligations of such Borrower to such
Lender or the Administrative Agent shall serve to diminish the liability of any
of the Guarantors under this Agreement (including, without limitation, this
Article 11) except to the extent that such Lender finally and unconditionally
shall have realized payment by such action or proceeding, notwithstanding the
effect of any such action or proceeding upon any Guarantor's right of
subrogation against such Borrower.
Section 11.10. Severability. Subject to Article 10 hereof and applicable
law, each of the rights and remedies granted under this Article 11 to the
Administrative Agent may be exercised by the Administrative Agent without notice
by the Administrative Agent to, or the consent of or any other action by, the
Administrative Agent, provided that each of the Guarantors will give each Lender
immediate notice of any exercise of rights and remedies by the Administrative
Agent under this Article 11.
Section 11.11. Other Enforcement Rights. The Administrative Agent may
proceed, as provided in Article 11 hereof, to protect and enforce the
Unconditional Guaranty by suit or suits or proceedings in equity, at law or in
bankruptcy, and whether for the specific performance of any covenant or
agreement contained herein (including, without limitation, in this Article 11)
or in execution or aid of any power herein granted; or for the recovery of
judgment for the obligations hereby guarantied or for the enforcement of any
other proper, legal or equitable remedy available under applicable law. Each
Lender shall have, to the fullest extent permitted by law and this Agreement, a
right of set-off against, any and all credits and any and all other Property of
any Guarantor, now or at any time whatsoever with, or in the possession of, such
holder, or anyone acting for such holder, as security for any and all
obligations of the Guarantors hereunder and such Lien shall be deemed permitted
for all purposes under Article 8 hereof.
Section 11.12. Delay or Omission; No Waiver. No course of dealing on the
part of any Lender or the Administrative Agent and no delay or failure on the
part of any such Person to exercise any right hereunder (including, without
limitation, this Article 11) shall impair such right or operate as a waiver of
such right or otherwise prejudice such Person's rights, powers and remedies
hereunder. Every right and remedy given by the Unconditional Guaranty or by law
to any Lender or the Administrative Agent may be exercised from time to time as
often as may be deemed expedient by such Person.
55
Section 11.13. Restoration of Rights and Remedies. If any Lender or the
Administrative Agent shall have instituted any proceeding to enforce any right
or remedy under the Unconditional Guaranty, under any Revolving Credit Note held
by such Lender, or under the Security Agreement, and such proceeding shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely to such Lender or the Administrative Agent, then and in every such
case each such Lender, the Administrative Agent, each Borrower and each
Guarantor shall, except as may be limited or affected by any determination in
such proceeding, be restored severally and respectively to its respective former
positions hereunder and thereunder, and thereafter, subject as aforesaid, the
rights and remedies of such Lender or the Administrative Agent shall continue as
though no such proceeding had been instituted.
Section 11.14. Cumulative Remedies. No remedy under this Agreement
(including, without limitation, this Article 11), the Revolving Credit Notes,
the Letters of Credit or any of the other Facility Documents is intended to be
exclusive of any other remedy, but each and every remedy shall be cumulative and
in addition to any and every other remedy given hereunder this Agreement
(including, without limitation, this Article 11), under the Revolving Credit
Notes, the Letters of Credit or under any of the other Facility Documents.
Section 11.15. Survival. So long as the Guarantied Obligations shall not
have been fully and finally performed and indefeasibly paid, the obligations of
the Guarantors under this Article 11 shall survive the transfer and payment of
any Revolving Credit Note or Letter of Credit Obligation and the payment in full
of all the Revolving Credit Notes and Letter of Credit Obligations and the
expiration and termination of the Revolving Credit Commitments.
Section 11.16. No Setoff, Counterclaim or Withholding; Gross-Up. Each
payment by a Guarantor shall be made without setoff or counterclaim and without
withholding for or on account of any present or future Taxes imposed by any
Governmental Authority. If any such withholding is so required, such Guarantor
shall make the withholding and pay the amount withheld to the appropriate
Governmental Authority before penalties attach thereto or interest accrues
thereon.
Section 11.17. Payment in Applicable Currency. Any payment of a Guarantied
Obligation required to be made pursuant to this Agreement shall be made in the
currency in which such Guarantied Obligation is required to be made pursuant to
this Agreement, any Revolving Credit Note or any other Facility Document.
ARTICLE 12. THE ADMINISTRATIVE AGENT.
56
Section 12.1. Appointment, Powers and Immunities of Administrative Agent.
Each Lender hereby irrevocably (but subject to removal by the Required Lenders
pursuant to Section 12.09) appoints and authorizes the Administrative Agent to
act as its agent hereunder and under any other Facility Document with such
powers as are specifically delegated to the Administrative Agent by the terms of
this Agreement and any other Facility Document, together with such other powers
as are reasonably incidental thereto. The Administrative Agent shall have no
duties or responsibilities except those expressly set forth in this Agreement
and any other Facility Document, and shall not by reason of this Agreement be a
trustee for any Lender. The Administrative Agent shall not be responsible to the
Lenders for any recitals, statements, representations or warranties made by any
Obligor or any officer or official of such Obligor or any other Person contained
in this Agreement or any other Facility Document, or in any certificate or other
document or instrument referred to or provided for in, or received by any of
them under, this Agreement or any other Facility Document, or for the value,
legality, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Facility Document or any other document or
instrument referred to or provided for herein or therein, for the perfection or
priority of any collateral security for the Revolving Credit Loans or the
Letters of Credit or for any failure by any Obligor to perform any of its
obligations hereunder or thereunder. The Administrative Agent may employ agents
and attorneys-in-fact and shall not be responsible, except as to money or
securities received by it or its authorized agents, for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any other Facility
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct.
Section 12.2. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telecopier, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat each Lender as
the holder of the Revolving Credit Loans made by it and the Letter of Credit
Obligations attributable to it for all purposes hereof unless and until a notice
of the assignment or transfer thereof satisfactory to the Administrative Agent
signed by such Lender shall have been furnished to the Administrative Agent but
the Administrative Agent shall not be required to deal with any Person who has
acquired a participation in any Revolving Credit Loan or Letter of Credit
Obligation from a Lender. As to any matters not expressly provided for by this
Agreement or any other Facility Document, the Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders, and such
instructions of the Required Lenders and any action taken or failure to act
57
pursuant thereto shall be binding on all of the Lenders and any other holder of
all or any portion of any Revolving Credit Loan or Letter of Credit Obligation.
Section 12.3. Defaults. The Administrative Agent shall not be deemed to
have knowledge of the occurrence of a Default or Event of Default (other than
the non-payment of principal of or interest on the Revolving Credit Loans and
the Letter of Credit Obligations to the extent the same is required to be paid
to the Administrative Agent for the account of the Lenders) unless the
Administrative Agent has received notice from a Lender or any Obligor specifying
such Default or Event of Default and stating that such notice is a "Notice of
Default." In the event that the Administrative Agent receives such a notice of
the occurrence of a Default or Event of Default, the Administrative Agent shall
give prompt notice thereof to the Lenders (and shall give each Lender prompt
notice of each such non-payment). The Administrative Agent shall (subject to
Section 12.08) take such action with respect to such Default or Event of Default
which is continuing as shall be directed by the Required Lenders; provided that,
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders; and provided further that the
Administrative Agent shall not be required to take any such action which it
determines to be contrary to law.
Section 12.4. Rights of Administrative Agent as a Lender. With respect to
its Revolving Credit Commitments and the Revolving Credit Loans made by it and
the Letter of Credit Obligations attributable to it, the Administrative Agent in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Agent in its
capacity as a Lender. The Administrative Agent and its affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to
(on a secured or unsecured basis), and generally engage in any kind of banking,
trust or other business with, any Consolidated Entity (and any of its
affiliates) as if it were not acting as the Administrative Agent, and the
Administrative Agent may accept fees and other consideration from any
Consolidated Entity for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders. Although the
Administrative Agent and its affiliates may in the course of such relationships
and relationships with other Persons acquire information about any Obligor, its
Affiliates and such other Persons, the Administrative Agent shall have no duty
to disclose such information to the Lenders.
Section 12.5. Indemnification of Administrative Agent. The Lenders agree
to indemnify the Administrative Agent (to the extent not reimbursed under
Section 13.03 or under the applicable provisions of any other Facility Document,
but without limiting the obligations of the Obligors under Section 13.03 or such
provisions), ratably in accordance with the aggregate unpaid principal amount of
the Obligations held by the
58
Lenders (without giving effect to any participations, in all or any portion of
such Obligations, sold by them to any other Person) (or, if no Obligations are
at the time outstanding, ratably in accordance with their respective Revolving
Credit Commitments), for any and all 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 Administrative Agent in any way relating to or arising out of this
Agreement, any other Facility Document or any other documents contemplated by or
referred to herein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses which the Obligors are
obligated to pay under Section 13.03 or under the applicable provisions of any
other Facility Document but excluding, unless a Default or Event of Default has
occurred, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents or instruments; provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
Section 12.6. Documents. The Administrative Agent will forward to each
Lender, promptly after the Administrative Agent's receipt thereof but in any
event within 10 days, a copy of each report, notice or other document required
by this Agreement or any other Facility Document to be delivered to the
Administrative Agent for such Lender.
Section 12.7. Non-Reliance on Administrative Agent and Other Lenders. Each
Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Consolidated Entities and decision to enter into this Agreement and that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any other Facility Document.
The Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Consolidated Entities of this Agreement or any
other Facility Document or any other document referred to or provided for herein
or therein or to inspect the Properties or books of any Consolidated Entity.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs,
financial condition or business of any Consolidated Entity (or any of its
Affiliates) which may come into the possession of the Administrative Agent or
any of its affiliates. The Administrative Agent shall not be required to file
this Agreement, any other Facility Document or any document or instrument
referred to herein or therein, for record or give notice of this Agreement, any
other Facility Document or any document or instrument referred to herein or
therein, to anyone.
59
Section 12.8. Failure of Administrative Agent to Act. Except for action
expressly required of the Administrative Agent hereunder, the Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have received further assurances (which may include
cash collateral) of the indemnification obligations of the Lenders under Section
12.05 in respect of any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
Section 12.9. Resignation or Removal of Administrative Agent. Subject to
the appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and Micro Warehouse, and the Administrative Agent may be
removed at any time with or without cause by the Required Lenders; provided that
Micro Warehouse and the other Lenders shall be promptly notified thereof. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent's giving
of notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be a bank
which has an office in New York, New York. The Required Lenders or the retiring
Administrative Agent, as the case may be, shall upon the appointment of a
successor Administrative Agent promptly so notify Micro Warehouse and the other
Lenders. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article 12 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent.
Section 12.10. Amendments Concerning Agency Function. The Administrative
Agent shall not be bound by any waiver, amendment, supplement or modification of
this Agreement or any other Facility Document which affects its duties hereunder
or thereunder unless it shall have given its prior consent thereto.
Section 12.11. Liability of Administrative Agent. The Administrative Agent
shall not have any liabilities or responsibilities to any Consolidated Entity on
account of the failure of any Lender to perform its obligations hereunder or to
any Lender on account of the failure of any Consolidated Entity to perform its
obligations hereunder or under any other Facility Document.
60
Section 12.12. Transfer of Agency Function. Without the consent of the
Obligors or any Lender, the Administrative Agent may at any time or from time to
time transfer its functions as Administrative Agent hereunder to any of its
offices wherever located, provided that the Administrative Agent shall promptly
notify Micro Warehouse and the Lenders thereof.
Section 12.13. Non-Receipt of Funds by the Administrative Agent. Unless
the Administrative Agent shall have been notified by a Lender or Micro Warehouse
(either one as appropriate being the "Payor") prior to the date on which such
Lender is to make payment hereunder to the Administrative Agent of the proceeds
of a Revolving Credit Loan or any Borrower is to make payment to the
Administrative Agent, as the case may be (either such payment being a "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the Payor has
not in fact made the Required Payment to the Administrative Agent, the recipient
of such payment (and, if such recipient is a Borrower and the Payor Lender fails
to pay the amount thereof to the Administrative Agent forthwith upon demand,
such Borrower) shall, on demand, repay to the Administrative Agent the amount
made available to it together with interest thereon for the period from the date
such amount was so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum equal to the
average daily Federal Funds Rate for such period.
Section 12.14. Withholding Taxes. Each Lender represents that it will
furnish to the Administrative Agent such forms, certifications, statements and
other documents as the Administrative Agent may request from time to time to
evidence such Lender's exemption from the withholding of any tax imposed by any
jurisdiction to the extent an exemption is available or to enable the
Administrative Agent to comply with any applicable laws or regulations relating
thereto. Without limiting the effect of the foregoing, if any Lender is not
created or organized under the laws of the United States of America or any state
thereof, in the event that the payment of interest by any Borrower is treated
for U.S. income tax purposes as derived in whole or in part from sources from
within the U.S., such Lender will furnish to the Administrative Agent Form 4224
or Form 1001 of the Internal Revenue Service, or such other forms,
certifications, statements or documents, duly executed and completed by such
Lender as evidence of such Lender's exemption from the withholding of U.S. tax
with respect thereto. The Administrative Agent shall not be obligated to make
any payments hereunder to such Lender in respect of any Revolving Credit Loan or
such Lender's Revolving Credit Commitments until such Lender shall have
furnished to the Administrative Agent the requested form, certification,
statement or document.
61
Section 12.15. Several Obligations and Rights of Lenders. The failure of
any Lender to make any Revolving Credit Loan to be made by it on the date
specified therefor shall not relieve any other Lender of its obligation to make
its Revolving Credit Loan on such date, but no Lender shall be responsible for
the failure of any other Lender to make a Revolving Credit Loan to be made by
such other Lender. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement, and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
Section 12.16. Pro Rata Treatment of Revolving Credit Loans, Etc. Except
to the extent otherwise provided: (a) each borrowing under Section 2.01 shall be
made from the Lenders, each reduction or termination of the amount of the
Revolving Credit Commitments under Section 2.06 shall be applied to the
Revolving Credit Commitments of the Lenders, and each payment of commitment fee
accruing under Section 2.09 shall be made for the account of the Lenders,
according to their Pro Rata Share; and (b) each prepayment and payment of
principal of or interest on Revolving Credit Loans shall be made to the
Administrative Agent for the account of the Lenders holding Revolving Credit
Loans pro rata in accordance with the respective unpaid principal amounts of
such Revolving Credit Loans held by such Lenders; and (c) each prepayment and
payment of fees under Section 3.09(a) and Letter of Credit Obligations shall be
made pro rata in accordance with the Pro Rata Share of the Lenders in the Letter
of Credit Obligations held by each of them.
Section 12.17. Sharing of Payments Among Lenders. If a Lender shall obtain
payment of any Obligation owed to it through the exercise of any right of
setoff, banker's lien, counterclaim, or by any other means, it shall promptly
purchase from the other Lenders participations in (or, if and to the extent
specified by such Lender, direct interests in) the Obligations of the other
Lenders in such amounts, and make such other adjustments from time to time as
shall be equitable to the end that all the Lenders shall share the benefit of
such payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with the amount of
Obligations held by each of them. To such end the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. Each Obligor agrees
that any Lender so purchasing a participation (or direct interest) in the
Obligations owed to the other Lenders may exercise all rights of setoff,
banker's lien, counterclaim or similar rights with respect to such participation
(or direct interest). Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness of any Consolidated Entity.
ARTICLE 13. MISCELLANEOUS.
62
Section 13.01. Amendments and Waivers. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by Micro Warehouse, the
affected Borrowers, the Administrative Agent and the Required Lenders, or by
Micro Warehouse, the affected Borrowers and the Administrative Agent acting with
the consent of the Required Lenders and any provision of this Agreement may be
waived by the Required Lenders or by the Administrative Agent acting with the
consent of the Required Lenders; provided that no amendment, modification or
waiver shall, unless by an instrument signed by all of the Lenders or by the
Administrative Agent acting with the consent of all of the Lenders: (a) increase
or extend the term, or extend the time or waive any requirement for the
reduction or termination, of the Revolving Credit Commitments; (b) modify the
date fixed for the payment of principal of or interest on any Revolving Credit
Loan, any Letter of Credit Obligation or any fee payable hereunder; (c) reduce
the amount of any payment of principal thereof or the rate at which interest is
payable thereon or any fee payable hereunder; (d) alter the terms of this
Section 13.01; (e) amend the definition of the term "Required Lenders"; (f)
waive any of the conditions precedent set forth in Section 4.01 hereof; or (g)
discharge any Guarantor from its Unconditional Guaranty under Article 11 hereof;
and provided, further, that any amendment of Article 12 hereof or any amendment
which increases the obligations of the Administrative Agent hereunder shall
require the consent of the Administrative Agent. No failure on the part of the
Administrative Agent or any Lender to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 13.02. Usury. Anything herein to the contrary notwithstanding, the
obligations of the Borrowers under this Agreement, the Revolving Credit Notes
and the other Facility Documents shall be subject to the limitation that
payments of interest shall not be required to the extent that receipt thereof
would be contrary to provisions of law applicable to a Lender limiting rates of
interest which may be charged or collected by such Lender.
Section 13.03. Expenses. Micro Warehouse (and, insofar it is responsible
for such expenses, each Obligor) shall reimburse the Administrative Agent on
demand for all reasonable costs, expenses and charges (including, without
limitation, reasonable fees and charges of external domestic and foreign legal
counsel for the Administrative Agent) in connection with the preparation of, and
any amendment, supplement, waiver or modification to (in each case, whether or
not consummated), this Agreement, any other Facility Document and any other
documents prepared in connection herewith or therewith. Micro Warehouse (and,
insofar it is responsible for such expenses, each Obligor) shall reimburse the
Administrative Agent and each Lender for all reasonable costs expenses and
charges (including, without limitation, reasonable fees and charges of external
domestic and foreign legal counsel for the Administrative Agent and each Lender)
in connection with the enforcement or preservation of any rights or remedies
63
during the existence of an Event of Default (including, without limitation, in
connection with any restructuring or insolvency or bankruptcy proceeding). Micro
Warehouse (and, insofar as it is responsible for the indemnified liability in
question, each Obligor) agrees to indemnify the Administrative Agent and each
Lender and their respective directors, officers, employees and agent from, and
hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them arising out of or by reason of any
investigation or litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to this Agreement or
any other Facility Document or to any actual or proposed use by any Borrower of
the proceeds of the Revolving Credit Loans or the Letters of Credit or to the
performance or enforcement of this Agreement or the other Facility Documents,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation or litigation or other
proceedings (but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the negligence or wilful misconduct of the Person
to be indemnified).
Section 13.04. Survival. The obligations of the Obligors under Sections
4.01, 4.05, 4.06, 13.03 and 13.16 shall survive the repayment of the Obligations
and the termination of the Revolving Credit Commitments.
Section 13.05. Assignment; Participations.
(a) This Agreement shall be binding upon, and shall inure to the
benefit of, Micro Warehouse, the Subsidiary Borrowers, the Subsidiary
Guarantors, the Administrative Agent, the Lenders and their respective
successors and assigns, except that none of the Obligors may not assign or
transfer their rights or obligations hereunder. So long as any assignment or
participation by any Lender of its rights and obligations in respect of the
Letters of Credit shall require the prior consent of the Issuing Lender such
consent not to be unreasonably withheld, each Lender may assign, or sell
participations in, all or any part of any Obligation to another bank or other
entity, in which event (i) in the case of an assignment, upon notice thereof by
the Lender to Micro Warehouse with a copy to the Administrative Agent, the
assignee shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights, benefits and obligations as it would have if it were
a Lender hereunder; and (ii) in the case of a participation, the participant
shall have no rights under the Facility Documents and all amounts payable by the
Borrowers under Articles 2 and 3 shall be determined as if such Lender had not
sold such participation. The agreement executed by such Lender in favor of the
participant shall not give the participant the right to require such Lender to
take or omit to take any action hereunder except action directly relating to (i)
the extension of a payment date with respect to any portion of the principal of
or interest on any amount outstanding hereunder allocated to such participant,
(ii) the reduction of the principal amount outstanding hereunder or (iii) the
reduction of the rate of interest payable on such amount or any amount of fees
payable hereunder to a rate or amount, as the case may be, below that which the
participant is entitled to receive under its agreement with such Lender. Such
Lender
64
may furnish any information concerning the Consolidated Entities in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall require any such prospective assignee or such participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of such
information. In connection with any assignment pursuant to this paragraph (a),
the assigning Lender shall pay the Administrative Agent an administrative fee
for processing such assignment in the amount of $5,000.
(b) In addition to the assignments and participations permitted
under paragraph (a) above, any Lender may assign and pledge all or any portion
of its Revolving Credit Loans and Revolving Credit Notes to (i) any affiliate of
such Lender or (ii) any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
Operating Circular issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.
Section 13.06. Notices. Unless the party to be notified otherwise notifies
the other party in writing as provided in this Section, and except as otherwise
provided in this Agreement, notices shall be given to the Administrative Agent
by telephone, confirmed by telex, telecopy or other writing, and to the Lenders
and to the Obligors by ordinary mail or telecopier addressed to such party at
its address on the signature page of this Agreement. Notices shall be effective:
(a) if given by mail, 72 hours after deposit in the mails with first class
postage prepaid, addressed as aforesaid; and (b) if given by telecopier, when
the telecopy is transmitted to the telecopier number as aforesaid; provided that
notices to the Administrative Agent and the Lenders shall be effective upon
receipt.
Section 13.07. Setoff. Each Obligor agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim a
Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances (general or special, time or demand, provisional or final) held
by it for the account of such Obligor at any of such Lender's offices, in
Dollars or in any other currency, against any amount payable by such Obligor to
such Lender under this Agreement, such Lender's Revolving Credit Notes, any
Letter of Credit or any other Facility Document which is not paid when due
(regardless of whether such balances are then due to such Obligor), in which
case it shall promptly notify such Obligor and the Administrative Agent thereof;
provided that such Lender's failure to give such notice shall not affect the
validity thereof. Payments by any Obligor hereunder shall be made without setoff
or counterclaim.
SECTION 13.08. JURISDICTION; IMMUNITIES. (a) EACH OF THE OBLIGORS HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY CONNECTICUT STATE OR UNITED
STATES FEDERAL COURT SITTING IN FAIRFIELD COUNTY OVER ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY REVOLVING CREDIT NOTE, ANY
LETTER OF CREDIT OR ANY
65
OTHER FACILITY DOCUMENT, AND EACH OF THE OBLIGORS HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH CONNECTICUT STATE OR FEDERAL COURT. EACH OF THE OBLIGORS DESIGNATES AND
APPOINTS MICRO WAREHOUSE, INC., 000 XXXXXXXXXXX XXXXXX, XXXXXXX, XXXXXXXXXXX
00000 AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY EACH
OBLIGOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH
PROCESS SO SERVED SHALL BE MAILED TO THE APPLICABLE OBLIGOR AT ITS ADDRESS
SPECIFIED IN SECTION 13.06 EXCEPT ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT
THE VALIDITY OF SERVICE OF PROCESS. EACH OF THE OBLIGORS AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. EACH OF THE OBLIGORS FURTHER WAIVES ANY OBJECTION TO VENUE IN
SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE
BASIS OF FORUM NON CONVENIENS.
(b) EACH OF THE OBLIGORS WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL.
THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY EACH OF THE
OBLIGORS AND SUCH OBLIGOR ACKNOWLEDGES THAT NO PERSON ACTING ON BEHALF OF
ANOTHER PARTY TO THIS AGREEMENT HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. EACH
OF THE OBLIGORS FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD
THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE
WILL AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
(c) TO INDUCE THE LENDERS TO ENTER INTO THE COMMERCIAL LOAN
TRANSACTION EVIDENCED BY THE FACILITY DOCUMENTS, EACH OF THE OBLIGORS AGREES
THAT THE SAID TRANSACTION IS COMMERCIAL AND NOT A CONSUMER TRANSACTION AND
WAIVES ANY RIGHT TO NOTICE OF AND HEARING OF THE RIGHTS OF THE ADMINISTRATIVE
AGENT AND THE LENDERS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES,
REVISIONS OF 1958, AS AMENDED, OR OTHER STATUTE OR STATUTES AFFECTING
PREJUDGMENT REMEDIES AND AUTHORIZES THE ADMINISTRATIVE AGENT'S OR ANY LENDER'S
ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED
THAT THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER.
(d) Nothing in this Section 13.08 shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
66
permitted by law or affect the right of the Administrative Agent or any Lender
to bring any action or proceeding against any Obligor or its Property in the
courts of any other jurisdictions.
(e) To the extent that any Obligor has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its Property, such Obligor
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement, the Revolving Credit Notes, the Letters of Credit and the other
Facility Documents.
Section 13.09. Table of Contents; Headings. Any table of contents and the
headings and captions hereunder are for convenience only and shall not affect
the interpretation or construction of this Agreement.
Section 13.10. Severability. The provisions of this Agreement are intended
to be severable. If for any reason any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction. Without limiting the foregoing, to the extent that
mandatory and non-waivable provisions of applicable law (including but not
limited to any applicable laws pertaining to fraudulent conveyance and any
applicable business corporation laws (including, in the case of Micro Warehouse
(Deutschland) GmbH, Section 30 of the German Act on Limited Liability Companies)
otherwise would render the full amount of any Obligor's obligations under this
Agreement and under the other Facility Documents invalid or unenforceable such
Obligor's obligations under this Agreement and under the other Facility
Documents shall be limited to the maximum amount which does not result in such
invalidity or unenforceability.
Section 13.11. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
Section 13.12. Integration. The Facility Documents set forth the entire
agreement among the parties hereto relating to the transactions contemplated
thereby and supersede any prior oral or written statements or agreements with
respect to such transactions.
SECTION 13.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CONNECTICUT. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
IN ACCORDANCE WITH, THE LAWS
67
OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE
DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UCP")
AND AS TO MATTERS NOT GOVERNED BY THE UCP, THE LAWS OF THE STATE OF CONNECTICUT.
Section 13.14. Confidentiality. Each Lender and the Administrative Agent
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with safe and sound banking practices, any
non-public information supplied to it by any Consolidated Entity pursuant to
this Agreement which is identified by such Consolidated Entity as being
confidential at the time the same is delivered to the Lenders or the
Administrative Agent, provided that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for any of the Lenders or the Administrative
Agent, (iii) to bank examiners, auditors or accountants, (iv) in connection with
any litigation to which any one or more of the Lenders is a party or (v) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) agrees to use
reasonable precautions to keep such information confidential; and provided
finally that in no event shall any Lender or the Administrative Agent be
obligated or required to return any materials furnished by such Consolidated
Entity.
Section 13.15. Treatment of Certain Information. Each of the Obligors (a)
acknowledges that services may be offered or provided to it (in connection with
this Agreement or otherwise) by each Lender or by one or more of their
respective subsidiaries or affiliates and (b) acknowledges that information
delivered to each Lender by any Consolidated Entity may be provided to each such
subsidiary and affiliate.
Section 13.16. Judgment Currency. The obligations of each Obligor under
this Agreement, the Revolving Credit Notes, the Letters of Credit and the other
Facility Documents to make payments in Dollars or in any Alternative Currency
(the "Obligation Currency") shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Administrative Agent or a
Lender of the full amount of the Obligation Currency expressed to be payable to
them under this Agreement, the Revolving Credit Notes, the Letters of Credit and
the other Facility Documents. If for the purpose of obtaining or enforcing
judgment against any Obligor in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made, at the Alternative Currency Equivalent or Dollar Equivalent, in the case
of any Alternative Currency or Dollars, and, in the case of other currencies,
the rate of
68
exchange (as quoted by the Administrative Agent or if the Administrative Agent
does not quote a rate of exchange on such currency, by a known dealer in such
currency designated by the Administrative Agent) determined, in each case, as on
the day immediately preceding the day on which the judgment is given (such
Banking Day being hereinafter referred to as the "Judgment Currency Conversion
Date").
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, each Obligor covenants and agrees to pay such additional amounts, if
any (but in any event not a lesser amount), as may be necessary to ensure that
the amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate of exchange prevailing
on the Judgment Currency Conversion Date.
(c) For purposes of determining the Alternative Currency Equivalent
or Dollar Equivalent or rate of exchange for this Section 13.16, such amount
shall include any premium and costs payable in connection with the purchase of
the Obligation Currency.
69
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
Address for Notices: MICRO WAREHOUSE, INC.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000 By:/s/ Xxxxx X. Xxx
Telephone No.: (000) 000-0000 ---------------------------
Telecopier No.: (000) 000-0000 Name:
Attention: Chief Financial Officer Title:
Attention: General Manager
SUBSIDIARY BORROWERS:
Address for Notices: MICRO WAREHOUSE SWEDEN AB
Midskogsgrand 0
X-000 00 Xxxxxxxxx By:/s/ Xxxxx X. Xxx
Sweden ---------------------------
Telephone No.: 000-00-0000-0000 Name:
Telecopier No.: 000-00-0000-0000 Title:
Attention: General Manager
Address for Notices: MICRO WAREHOUSE HOLDING B.V.
GSA Business Center B.V.
Prof. Lorenziann 3A By:/s/ Xxxxx X. Xxx
3701 CA ZEIST ---------------------------
Telephone No.: 000-00-00000-0000 Name:
Telecopier No.: 011-31-34043-3248 Title:
Attention: General Manager
Address for Notices: MICRO WAREHOUSE LIMITED
Xxxx 0, Xxxxxx Xxxx
Xxxxxxx Xxxx By:/s/ Xxxxx X. Xxx
Xxxxxxx Xxxxx XX00XX ---------------------------
Telephone No.: 000-000-000000-0000 Name:
Telecopier No.: 011-441-192323-4112 Title:
Attention: General Manager
[SIGNATURE PAGE TO CREDIT AGREEMENT]
Address for Notices: MICRO WAREHOUSE FRANCE SARL
Techno Direct
6 Boulevard Xxxxx Xxxxxxx By:/s/ Xxxxx X. Xxx
00000 Xxxxxxxx ---------------------------
Telephone No.: 000-00-00000-0000 Name:
Telecopier No.: 011-33-14099-2888 Title:
Attention: General Manager
Address for Notices: MICRO WAREHOUSE (DEUTSCHLAND)
GMBH
Xxxxxxxxxxxxxxx 0
00000 Xxx-xxxxxxxx
Xxxxxxxxxxx By:/s/ Xxxxx X. Xxx
Telephone No.: 000-00-0000-000000 ---------------------------
Telecopier No.: 011-49-6102-705200 Name:
Attention: General Manager Title:
[SIGNATURE PAGE TO CREDIT AGREEMENT]
SUBSIDIARY GUARANTORS:
Address for Notices: MICRO WAREHOUSE CANADA LIMITED
000 Xxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx By:/s/ Xxxxx X. Xxx
Xxxxxx X0X 0X0 ---------------------------
Telephone No.: 000-000-0000 Name:
Telecopier No.: 000-000-0000 Title:
Attention: General Manager
Address for Notices: MICRO WAREHOUSE, INC. OF OHIO
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000 By:/s/ Xxxxx X. Xxx
Telephone No.: (000) 000-0000 ---------------------------
Telecopier No.: (000) 000-0000 Name:
Attention: Chief Financial Officer Title:
Address for Notices: MICRO WAREHOUSE, INC. OF NEW JERSEY
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000 By:/s/ Xxxxx X. Xxx
Telephone No.: (000) 000-0000 ---------------------------
Telecopier No.: (000) 000-0000 Name:
Attention: Chief Financial Officer Title:
Address for Notices: MICRO WAREHOUSE INTERNATIONAL, INC.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000 By:/s/ Xxxxx X. Xxx
Telephone No.: (000) 000-0000 ---------------------------
Telecopier No.: (000) 000-0000 Name:
Attention: Chief Financial Officer Title:
[SIGNATURE PAGE TO CREDIT AGREEMENT]
Address for Notices: XXXXXX SISTEMAS, S.A. de C.V.
Circuito Novelistas 129-106
Ciudad Satelite By:/s/ Xxxxx X. Xxx
Naucalpan ---------------------------
Xxxxxx. xx Xxxxxx X.X. 00000 Name:
Telephone No.: 000-00-0000-00000 Title:
Telecopier No.: 000-00-0000-0000
Attention: General Manager
Address for Notices: INMAC AB SWEDEN
Midskogsgrand 0
X-000 00 Xxxxxxxxx By:/s/ Xxxxx X. Xxx
Sweden ---------------------------
Telephone No.: 000-00-0000-0000 Name:
Telecopier No.: 000-00-0000-0000 Title:
Attention: General Manager
Address for Notices: MICRO WAREHOUSE B.V.
GSA Business Center B.V.
Prof. Lorenziann 3A By:/s/ Xxxxx X. Xxx
3701 CA ZEIST ---------------------------
Telephone No.: 000-00-00000-0000 Name:
Telecopier No.: 011-31-34043-3248 Title:
Attention: General Manager
[SIGNATURE PAGE TO CREDIT AGREEMENT]
ADMINISTRATIVE AGENT:
THE CHASE MANHATTAN BANK
By /s/ Xxxx Aria
-------------------------------
Name:
Title:
Address for Notices:
New York Agency
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
with a copy to:
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Aria
Telecopier No.: (000)000-0000
[SIGNATURE PAGE TO CREDIT AGREEMENT]
LENDERS:
THE CHASE MANHATTAN BANK
By /s/ Xxxx Aria
-------------------------------
Name:
Title:
Lending Office for Variable Rate Loans:
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Lending Office for Eurocurrency Loans:
Nassau Branch c/o
Eurocurrency Operations
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Address for Notices:
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Aria
Telecopier No.: (000) 000-0000
[SIGNATURE PAGE TO CREDIT AGREEMENT]
LENDERS:
STATE STREET BANK AND
TRUST COMPANY
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name:
Title:
Address for Notices:
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxx
Telecopier No.: (000) 000-0000
[SIGNATURE PAGE TO CREDIT AGREEMENT]
SCHEDULE I
REVOLVING CREDIT COMMITMENTS
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
XXX XXXXX XXXXX XXXXXX
XXXXXXXX XXXXXXXXX BANK AND TRUST
BANK COMPANY
================================================================================
MICRO WAREHOUSE, INC $28,666,666.66 $14,333,333.34
--------------------------------------------------------------------------------
MICRO WAREHOUSE SWEDEN AB 2,666,666.67 1,333,333.33
--------------------------------------------------------------------------------
MICRO WAREHOUSE HOLDING B.V 4,000,000.00 2,000,000.00
--------------------------------------------------------------------------------
MICRO WAREHOUSE LIMITED 6,666,666.67 3,333,333.33
--------------------------------------------------------------------------------
MICRO WAREHOUSE FRANCE SARL 4,000,000.00 2,000,000.00
--------------------------------------------------------------------------------
MICRO WAREHOUSE (DEUTSCHLAND) GMBH 4,000,000.00 2,000,000.00
--------------------------------------------------------------------------------
TOTAL REVOLVING CREDIT COMMITMENTS 50,000,000.00 25,000,000.00
================================================================================
