EXHIBIT 10.1
EXECUTION VERSION
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FORBEARANCE AGREEMENT
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This FORBEARANCE AGREEMENT, dated as of April 4, 2003 (this "Agreement"),
is by and among MCSi, Inc., a Maryland corporation, which is the successor by
merger to Miami Computer Supply Corporation, an Ohio corporation (herein,
together with its successors and assigns, the "Borrower"); the financial
institutions listed on the signature pages hereof (the "Lenders"); NATIONAL CITY
BANK, a national banking association, as a Lender and as Documentation Agent;
and PNC BANK, NATIONAL ASSOCIATION, a national banking association, as a Lender,
the Swing Line Lender, a Letter of Credit Issuer, the Collateral Agent and
Administrative Agent (the "Administrative Agent") for the Lenders under the
Credit Agreement.
PRELIMINARY STATEMENTS
1. The Borrower, the Lenders, and the Administrative Agent entered into the
Amended and Restated Credit Agreement, dated as of December 1, 1998 (as amended,
the "Credit Agreement"; capitalized terms used but not otherwise defined herein
shall have the meanings accorded such terms contained or incorporated in the
Credit Agreement).
2. The Borrower has failed to, or anticipates that it will fail to, perform
or observe certain covenants and agreements contained in the Credit Agreement,
which failures have resulted or will result in Events of Default under the
Credit Agreement.
3. The Borrower has requested that the Administrative Agent and the Lenders
forbear, until May 2, 2003, from exercising their rights and remedies under the
Credit Agreement and the other Credit Documents with respect to such Events of
Default, and the Lenders, subject to and based upon the agreements,
representations, terms and conditions herein, agree to such request. In
furtherance of such request, the Borrower, the Administrative Agent and the
Lenders have agreed to amend the Credit Agreement, all on the terms and subject
to the conditions of this Agreement.
AGREEMENT
In consideration of the mutual agreements contained in this Agreement, and
other good and valuable consideration the receipt and sufficiency of which are
acknowledged, the parties to this Agreement agree as follows:
SECTION 1 ACKNOWLEDGMENT OF THE BORROWER.
1.1 Outstanding Balance. As of the date of this Agreement, the Borrower
owes the Lenders $129,400,000.00 in principal amount of General Revolving Loans
under the Credit Agreement and $302,610.95 in accrued and unpaid interest and
fees under the Credit Agreement, and has outstanding a Letter of Credit with a
Stated Amount of $527,500.03, and all of such indebtedness, together with
continually accruing interest and related costs, fees and expenses (including,
without limitation, attorneys' fees and fees of financial advisors) is, as of
the date
hereof, owing without claim, counterclaim, right of recoupment, abatement,
reduction or set-off of any kind or nature.
1.2 Default. The Borrower acknowledges that Events of Default have occurred
and are continuing as follows:
(a) under Section 10.1(c) of the Credit Agreement, the Borrower failed to
comply with Section 9.7 (Consolidated Total Debt/Consolidated EBITDA Ratio) of
the Credit Agreement for the Testing Period ended December 31, 2002;
(b) under Section 10.1(c) of the Credit Agreement, the Borrower failed to
comply with Section 9.8 (Fixed Charge Coverage Ratio) of the Credit Agreement
for the Testing Period ended December 31, 2002; and
(c) under Section 10.1(j) of the Credit Agreement, the existence of events
and circumstances that have had a Material Adverse Effect upon the Borrower
(collectively, the "Certain Existing Defaults").
In addition, the Borrower anticipates that it will not be in compliance with the
covenants set forth in Section 9.7 and 9.8 of the Credit Agreement, in each case
for the Testing Period ended March 31, 2003, which noncompliance will result in
additional Events of Default under Section 10.1(c) of the Credit Agreement (the
"Anticipated Defaults"). As used herein, "Forbearance Defaults" means (i) the
Certain Existing Defaults, (ii) the Anticipated Defaults, and (iii) any other
Default or Event of Default that has occurred and was continuing prior to the
date hereof.
SECTION 2 FORBEARANCE.
2.1 Forbearance. During the Forbearance Period (as defined below), neither
the Administrative Agent nor the Lenders will exercise any of their rights or
remedies under the Credit Agreement and the other Credit Documents solely with
respect to the Forbearance Defaults. For purposes of this Agreement: (i) the
"Forbearance Period" means the period commencing on the Effective Date (as
defined below) and ending on the Termination Date (as defined below); (ii) the
"Effective Date" means the date first written above or such later date as each
of the conditions precedent set forth in Section 6 hereof has been satisfied;
and (iii) the "Termination Date" means the earlier of (a) May 2, 2003, and (b)
the date the Forbearance Period is terminated upon the occurrence of any of the
events described in Section 2.2 below. Nothing in this Agreement shall
constitute a waiver by the Lenders of any Default or Event of Default under the
Credit Agreement (including the Forbearance Defaults), whether now existing or
hereafter arising. This Agreement only constitutes an agreement by the Lenders
to forbear from exercising their rights and remedies under the Credit Agreement
and the other Credit Documents based upon the Forbearance Defaults on the terms
and subject to the conditions set forth in this Agreement.
2.2 Termination of Forbearance. Upon the occurrence of any Termination
Event (as defined below), the Required Lenders are entitled to, without prior
notice to the Borrower, immediately terminate the Forbearance Period, unless
such Termination Event is an Event of Default described in Section 10.1(h) of
the Credit Agreement, in which case the Forbearance
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Period will automatically terminate without demand or notice of any kind. For
purposes of this Agreement, "Termination Event" means:
(a) the Borrower shall (i) default in the payment when due of any principal
of the Loans or any reimbursement obligation in respect of any Unpaid Drawing;
or (ii) default, and such default shall continue for five or more days, in the
payment when due of any interest on the Loans or any Fees or any other amounts
owing under the Credit Agreement or under any other Credit Document;
(b) the Borrower shall default in the due performance or observance by it
of any term, covenant or agreement contained in Section 9 of the Credit
Agreement (other than Sections 9.7 through 9.11, inclusive);
(c) the occurrence of an Event of Default under Section 10.1(h) of the
Credit Agreement;
(d) one or more judgments or decrees shall be entered against the Borrower
and/or any of its Subsidiaries involving a liability (whether or not covered by
insurance) of $125,000 or more in the aggregate for all such judgments and
decrees for the Borrower and its Subsidiaries;
(e) failure by the Borrower to comply with any of its other agreements
described in Section 4; or
(f) any representation or warranty made by any Credit Party under this
Agreement or any agreement, instrument or other document executed or delivered
by any Credit Party in connection with this Agreement is untrue or incorrect in
any material respect when made or any schedule, certificate, statement, report,
financial data, notice or writing furnished at any time in connection herewith
by any Credit Party to the Lenders or the Administrative Agent is untrue or
incorrect in any material respect on the date as of which the facts set forth
therein are stated or certified.
2.3 Effect at End of Forbearance Period. When the Forbearance Period ends,
all Obligations may be declared immediately due and payable as provided in the
Credit Agreement, without notice or demand, and without regard to any matters
transpiring during the Forbearance Period or the financial condition or
prospects of the Borrower as of such date, and the Lenders will be fully
entitled to exercise any rights and remedies they may have under the Credit
Agreement, the other Credit Documents or applicable law.
2.4 No Waiver.
(a) The Lenders have not waived, are not by this Agreement waiving, and
have no present intention of waiving, any Events of Default that may be
continuing on the date hereof or any Events of Default that may occur after the
date hereof (whether the same or similar to the Forbearance Defaults or
otherwise), and the Lenders have not agreed to forbear with respect to any of
their rights or remedies concerning any Events of Default (other than, during
the Forbearance Period, the Forbearance Defaults), that may have occurred or are
continuing as of the date hereof or that may occur after the date hereof.
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(b) Subject to Section 2.1 above (solely with respect to the Forbearance
Defaults), the Lenders reserve the right, in their sole discretion, to exercise
any or all of their rights and remedies under the Credit Agreement, the other
Credit Documents and applicable law as a result of any Events of Default that
may exist and be continuing on the date hereof or any Event of Default that may
occur after the date hereof, and the Lenders have not waived any of such rights
or remedies, and nothing in this Agreement, and no delay on their part in
exercising any such rights or remedies, should be construed as a waiver of any
such rights or remedies.
(c) Without limiting the generality of the foregoing, the Borrower will not
claim that any prior action or course of conduct by the Lenders constitutes an
agreement or obligation to continue such action or course of conduct in the
future. The Borrower acknowledges that the Lenders have made no commitment as to
how or whether the Forbearance Defaults will be resolved upon or following the
Termination Date.
(d) Nothing in this Agreement, other than the provisions in Section 3 below
and except as provided in Section 4 below, shall be construed as an amendment to
the Credit Agreement or any Credit Document. The Credit Agreement and the other
Credit Documents are in full force and effect, as modified by the provisions in
Section 3 and Section 4 below, and shall remain in full force and effect unless
and until an agreement modifying such documents is executed by applicable Credit
Party and the Lenders or Administrative Agent, as applicable.
SECTION 3 AMENDMENTS TO CREDIT AGREEMENT. Effective as of the Effective
Date, the Credit Agreement will be amended as follows:
3.1 Definitions - Asset Sale. The definition of "Asset Sale" contained in
Section 1.1 of the Credit Agreement is hereby, effective as of the Effective
Date, amended and restated in its entirety to read as follows:
"Asset Sale" shall mean the sale, transfer or other disposition
(including by means of Sale and Lease-Back Transaction, and by means of
mergers, consolidations, and liquidations of a corporation, partnership or
limited liability company of the interests therein of the Borrower or any
Subsidiary) by the Borrower or any Subsidiary to any person other than the
Borrower or any Domestic Subsidiary of any of their respective assets,
including but not limited to bulk sales of obsolete inventory, provided
that the term Asset Sale shall not include sales, transfers or other
dispositions of inventory in the ordinary course of business.
3.2 Certain Proceeds of Asset Sales. Section 5.2(d) of the Credit Agreement
is hereby, effective as of the Effective Date, amended and restated in its
entirety to read as follows:
(d) Certain Proceeds of Asset Sales. If the Borrower or any of its
Subsidiaries have received Cash Proceeds from any Asset Sale (in a single
transaction or a series of related transactions) of at least $25,000, not
later than the second Business Day following the date of receipt of any
Cash Proceeds in excess of such amount, an amount at least equal to 100% of
the Net Cash Proceeds then received in excess of such amount from such
Asset Sale, shall be applied as a mandatory prepayment of principal of the
outstanding General Revolving Loans, and the General Revolving Loan
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Commitments shall be permanently reduced as provided in Section 4.3(c) of
the Credit Agreement.
3.3 Permitted Acquisitions. Section 9.2(c) of the Credit Agreement is
hereby, effective as of the Effective Date, amended and restated in its entirety
to read as follows:
(c) Permitted Acquisitions. [Reserved]
3.4 Dividends. Section 9.6 of the Credit Agreement is hereby, effective as
of the Effective Date, amended and restated in its entirety to read as follows:
9.6. Dividends, etc. The Borrower will not (a) directly or indirectly
declare, order, pay or make any dividend (other than dividends payable
solely in capital stock of the Borrower) or other distribution on or in
respect of any capital stock of any class of the Borrower, whether by
reduction of capital or otherwise, or (b) directly or indirectly make, or
permit any of its Subsidiaries to directly or indirectly make, any
purchase, redemption, retirement or other acquisition of any capital stock
of any class of the Borrower (other than for a consideration consisting
solely of capital stock of the same class of the Borrower) or of any
warrants, rights or options to acquire or any securities convertible into
or exchangeable for any capital stock of the Borrower.
3.5 General Revolving Loan Commitment. The General Revolving Loan
Commitments of the Lenders are hereby, effective as of the Effective Date,
decreased by $30,000,000 in the aggregate, and the General Revolving Loan
Commitments of the Lenders set forth on Annex I of the Credit Agreement are
hereby amended to reflect such decrease as follows (as the same may be further
decreased as provided herein and in the Credit Agreement):
Lender General Revolving Loan Commitment
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PNC Bank, National Association $20,312,500.00
National City Bank $20,312,500.00
LaSalle Bank, National Association $20,312,500.00
US Bank, National Association $20,312,500.00
Fifth Third Bank $12,187,500.00
The Huntington National Bank $20,312,500.00
The Provident Bank $16,250,000.00
Total $130,000,000.00
SECTION 4 AGREEMENTS OF THE BORROWER.
In consideration of the Lenders' forbearance under this Agreement, the Borrower
agrees as follows:
4.1 Special Financial Covenants. As used herein, the following definitions
shall have the following meanings:
"Antecedent Debt Payments" means Antecedent Debt Payments, as reflected or
would be reflected in the Cash Budget.
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"Cash Budget" shall mean the Consolidated Cash Flow Projections of the
Borrower for the period March 24, 2003 through May 2, 2003, a copy of which is
attached hereto as Exhibit A.
"Capital Expenditures" means Capital Expenditures, as reflected or would be
reflected in the Cash Budget.
"Contingency" means Contingency, as reflected or would be reflected in the
Cash Budget.
"Cumulative Operating Cash" means Total Cash Receipts minus Total Operating
Disbursements.
"Cumulative Other Expenditures" means Cumulative, Other Expenditures, as
reflected or would be reflected in the Cash Budget.
"Direct Costs" means Direct Costs, as reflected or would be reflected in
the Cash Budget.
"Interest" means Interest, as reflected or would be reflected in the Cash
Budget.
"Inventory Optimization" means Inventory Optimization, as reflected or
would be reflected in the Cash Budget.
"Letters of Credit" means Letter of Credit, as reflected or would be
reflected in the Cash Budget.
"Measurement Date" means each of the following dates: (i) April 4, 2003,
(ii) April 18, 2003, and (iii) May 2, 2003.
"Overhead Costs" means Overhead Costs, as reflected or would be reflected
in the Cash Budget.
"Total Cash Receipts" means Total Cash Receipts, as reflected or would be
reflected in the Cash Budget.
"Total Disbursements" means the sum of (i) Total Operating Disbursements
and (ii) Total Other Expenditures.
"Total Operating Disbursements" means the sum of (i) Direct Costs, (ii)
Overhead Costs, (iii) Interest and (iv) Capital Expenditures.
"Total Other Expenditures" means the sum of (i) Antecedent Debt Payments,
(ii) Inventory Optimization, (iii) Letters of Credit, and (iv) Contingency.
(a) Total Operating Disbursements. During the Forbearance Period, the
Borrower shall not permit Total Operating Disbursements in the aggregate to be
in excess of the amount set forth below for the periods set forth below ending
on the Measurement Date set forth below:
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Measurement Date Total Operating Disbursements
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For the two weeks ending April 4, 2003 $20,645,784
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For the four weeks ending April 18, 2003 $37,048,731
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For the six weeks ending May 2, 2003 $56,633,241
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(b) Cumulative Other Expenditures. During the Forbearance Period, the
Borrower shall not permit Cumulative Other Expenditures in the aggregate to be
in excess of the amount set forth below for the periods set forth below ending
on the Measurement Date set forth below:
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Measurement Date Cumulative Other Expenditures
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For the two weeks ending April 4, 2003 $3,927,500
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For the four weeks ending April 18, 2003 $7,227,500
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For the six weeks ending May 2, 2003 $8,427,500
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(c) Cumulative Operating Cash. During the Forbearance Period, the Borrower
shall not permit the Cumulative Operating Cash to be in less than the amount set
forth below for the periods set forth below ending on the Measurement Date set
forth below:
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Measurement Date Cumulative Operating Cash
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For the two weeks ending April 4, 2003 ($3,693,360)
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For the four weeks ending April 18, 2003 ($9,014,011)
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For the six weeks ending May 2, 2003 ($10,581,405)
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(d) Bonding. Without the prior written approval of the Administrative
Agent, during the Forbearance Period, the maximum amount of the cash collateral
and other collateral supporting performance bonds or bid bonds constituting part
of the "Contingency" component of Total Other Expenditures shall not exceed
$3,000,000 in the aggregate.
(e) Compliance Certificate. On the Wednesday following each Measurement
Date, or more often as the Administrative Agent may request, the Borrower will
provide an officer's certificate certifying compliance with this Section 4.1,
and demonstrating in detail satisfactory to the Administrative Agent the
calculations necessary for such certification.
4.2 Reporting. During the Forbearance Period and thereafter, the Borrower
will provide the Administrative Agent and Lenders with a rolling 13 week cash
flow forecast on Wednesday of each week for the current week and the following
12 weeks, together with a variance comparison to the previous two weeks and
accompanied by an officer's certificate certifying the information therein.
4.3 Condition Precedent to Loans. In lieu of the conditions precedent set
forth in Section 6.2 of the Credit Agreement, as a condition precedent to the
obligations of the Lenders to make each Loan and/or of a Letter of Credit Issuer
to issue each Letter of Credit during the Forbearance Period, the Borrower will
provide an officer's certificate certifying compliance with this Agreement,
including but not limited to Section 4.1 hereof (together with such supporting
information as the Administrative Agent may reasonably request). During the
Forbearance Period, the Borrower will not request, and the Lenders will not be
obligated to fund, any General Revolving Loans other than in accordance with the
Cash Budget, and the proceeds of such Loans shall be used by the Borrower as set
forth in Cash Budget within the categories set forth in the
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Cash Budget, provided that any use of proceeds in excess of $25,000 for the
category Contingency shall be approved by the Administrative Agent in writing,
such approval not to be unreasonably withheld.
4.4 Tax Refunds. Notwithstanding anything to the contrary in the Credit
Agreement, immediately upon the receipt of the presently anticipated tax refund
(estimated by the Borrower to be approximately $25,000,000), the Borrower will
make a mandatory prepayment of General Revolving Loans in an amount equal to
100% of such tax refund, and the General Revolving Commitments will be
permanently reduced in an amount equal to the amount of any such tax refund less
the lesser of (i) 40% of the tax refund or (ii) $10,000,000.
4.5 Loans; Interest Rates. Notwithstanding anything to the contrary in the
Credit Agreement, during the Forbearance Period and thereafter, the Borrower may
only borrow Prime Rate Loans; provided that (1) one Eurodollar Loan in the
principal amount of $30 million outstanding on the Effective Date may remain
outstanding and may be renewed as a Eurodollar Loan so long as the Hedge
Agreement to which it relates is outstanding and (2) the two other Eurodollar
Loans outstanding on the Effective Date may remain outstanding but may not be
renewed as Eurodollar Loans. Notwithstanding anything to the contrary in the
Credit Agreement, during the Forbearance Period and thereafter, all Prime Rate
Loans will bear interest at a rate equal to (i) the Prime Rate, plus (ii) the
highest Applicable Prime Rate Margin set forth on the Pricing Grid, plus (iii)
200 basis points. The Lenders acknowledge and agree that such interest includes
default interest payable under Section 2.7(d) of the Credit Agreement.
4.6 Letters of Credit. During the Forbearance Period and thereafter, to the
extent any existing Letter of Credit and any future Letter of Credit or renewal
of an existing Letter of Credit is outstanding when an Event of Default exists
(other than the Forbearance Defaults during the Forbearance Period), the
Borrower will be deemed to have requested (and the Lenders will be deemed to
have advanced) General Revolving Loans in an amount equal to 105% of the Stated
Amount of all such Letters of Credit and such amount shall be deposited with and
retained by the Administrative Agent as cash collateral for such Letters of
Credit. During the Forbearance Period and thereafter, in the event that any
Letter of Credit Issuer makes any payment or disbursement under any Letter of
Credit, the Borrower will be deemed to have concurrently requested (and the
Lenders shall be deemed to have advanced) General Revolving Loans in the amount
of the payment to drawing to reimburse such Letter of Credit Issuer for such
payment and/or drawing. During the Forbearance Period and thereafter, any Letter
of Credit, other than the renewal of the existing Letter of Credit with a Stated
Amount of $527,500.03 and other than a new Letter of Credit with the Stated
Amount of $527,500 as reflected in the Cash Budget, shall be issued in the sole
and absolute discretion of the Letter of Credit Issuer.
4.7 Real Property Leases. Notwithstanding anything in the Credit Agreement
to the contrary, during the Forbearance Period and thereafter, neither the
Borrower nor any of its subsidiaries will enter into any new leases of real
property without the prior written consent of the Administrative Agent.
4.8 Bank Accounts. During the Forbearance Period and thereafter (i) the
Borrower will not open any bank, deposit or securities accounts other than
accounts with the Administrative Agent or a Lender; (ii) all existing accounts
and relationships will be maintained and any changes will require the consent of
the Administrative Agent; (iii) the Borrower will not
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change any of its existing standing transfer orders with existing banks without
the approval of the Administrative Agent; and (iv) all funds held by or on
behalf of the Borrower or any of its Domestic Subsidiaries in any account other
than an account with the Administrative Agent shall be transferred daily to an
account with the Administrative Agent.
4.9 Foreign Subsidiaries. Notwithstanding anything to the contrary in the
Credit Agreement or in any previously provided waiver or consent, during the
Forbearance Period and thereafter: (i) neither the Borrower nor any of its
Subsidiaries shall engage in any transaction (including without limitation any
disposition or winding down of operations) involving any Foreign Subsidiary of
the Borrower located in Canada or the United Kingdom without the prior written
consent of the Administrative Agent and the Required Lenders, provided that a
liquidation or other dissolution of MCSi Europe Limited shall not require such
prior written consent, and it being expressly understood that such liquidation
or other dissolution of MCSi Europe Limited shall not constitute an Event of
Default under Section 10.1(h) of the Credit Agreement; and (ii) neither the
Borrower nor any of its Subsidiaries shall make any further loans or advances
to, capital contributions to or other investments in, any Foreign Subsidiary
without the prior written consent of the Administrative Agent and the Required
Lenders.
4.10 Eligible Transferees. As contemplated by the definition of "Eligible
Transferee", the Borrower hereby confirms and agrees that on and after the
Effective Date it will not have the right to disapprove an assignment by a
Lender under the Credit Agreement.
4.11 Change of Control - Chief Executive Officer. As contemplated by the
definition of "Change of Control", the Required Lenders hereby consent to the
appointment of D. Xxxxxx Xxxxxxxxxx as successor to Xxxxxxx X. Xxxxxx as Chief
Executive Officer of the Borrower. Notwithstanding the foregoing and anything in
the Credit Agreement to the contrary, if after the date hereof D. Xxxxxx
Xxxxxxxxxx shall cease to be the Chief Executive Officer of the Borrower for any
reason whatsoever, an immediate Event of Default shall occur under the Credit
Agreement unless a successor acceptable to the Required Lenders in their sole
and absolute discretion is expeditiously appointed to such office. In addition,
if at any time after the Effective Date the person serving in the capacity as
Chief Financial Officer of the Borrower ceases to be acceptable to the Required
Lenders, then an immediate Event of Default shall occur under the Credit
Agreement, it being expressly understood that Xxxxxx Xxxxxxxx serving in the
capacity as Chief Financial Officer of the Borrower is acceptable to the
Required Lenders.
4.12 Acknowledgment and Consent. The Borrower will cause the Subsidiary
Guarantors to execute and deliver to the Lenders the Acknowledgment and Consent
of the Subsidiary Guarantors attached hereto as Exhibit B as soon as reasonably
practicable after the date of this Agreement.
4.13 Asset Sales. Notwithstanding the existence of the Forbearance Defaults
and anything to the contrary contained in the Credit Agreement, during the
Forbearance Period the Borrower and its Subsidiaries may dispose of inventory in
the ordinary course of business.
4.14 Further Assurances. At any time and from time to time, at the cost and
expense of the Borrower, the Borrower will, and will cause its Subsidiaries to:
(i) execute and deliver all further agreements, instruments and documents, and
take all further action, that may be reasonably necessary to complete the
transactions contemplated by this Agreement; (ii)
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cooperate fully with the Lenders' personnel and representatives with respect to
any reasonable request for information by such personnel and representatives,
and (iii) subject to any attorney-client or other privilege of the Borrower,
comply with any reasonable request of the Administrative Agent or any of the
Lenders to permit officers and designated representatives of the Administrative
Agent or any of the Lenders to visit and inspect any of the properties or assets
of the Borrower and any of its Subsidiaries in whomsoever's possession (but only
to the extent the Borrower or such Subsidiary has the right to do so to the
extent in the possession of another person), to examine the books of account and
other records of the Borrower and any of its Subsidiaries, to make copies
thereof and take extracts therefrom, and to discuss the affairs, finances and
accounts of the Borrower and of any of its Subsidiaries with, and be advised as
to the same by, its and their officers.
SECTION 5 REPRESENTATIONS AND WARRANTIES.
To induce the Administrative Agent and the Lenders to enter into this Agreement,
the Borrower represents and warrants to the Administrative Agent and the Lenders
that:
5.1 Due Authorization; No Conflict; No Lien; Enforceable Obligation. The
execution, delivery and performance by the Borrower of this Agreement are within
its corporate powers, have been duly authorized by all necessary corporate
action, have received all necessary governmental, regulatory or other approvals
(if any are required) and do not and will not contravene or conflict with any
provision of (i) any law, (ii) any judgment, decree or order, or (iii) the
Borrower's articles or certificate of incorporation or by-laws (or other
organizational documents), and do not and will not contravene or conflict with,
or cause any lien to arise under any provision of any material agreement or
instrument binding upon the Borrower or upon any of its property. This Agreement
and the Credit Agreement are the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective
terms.
5.2 No Claims, etc. Neither the Borrower nor any other Credit Party has any
claim or offset against, or defense or counterclaim to, any of their respective
obligations or liabilities under the Credit Agreement or any other Credit
Document, or the Administrative Agent and each of the Lenders and their
respective directors, officers, employees, attorneys, representatives, parents,
affiliates, subsidiaries, predecessors, successors and assigns.
5.3 Insurance Policies. The insurance policies of the Borrower listed on
Schedule I attached hereto are in full force and effect.
SECTION 6 CONDITIONS PRECEDENT.
The obligation of the Lenders to institute the forbearance contemplated by this
Agreement and the commencement of the Forbearance Period are subject to the
following:
6.1 Documents. The Administrative Agent has received all of the following,
each duly executed, as applicable, and dated as of the Effective Date (or such
other date as is satisfactory to the Administrative Agent) and in form and
substance satisfactory to the Administrative Agent:
(a) this Agreement;
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(b) certified copies of the resolutions of the Borrower authorizing this
Agreement;
(c) the Borrower shall have delivered an organization chart of the Borrower
and its Subsidiaries, certified by an officer of the Borrower as being true,
correct and complete in all material respects as of the Effective Date; and
(d) the Borrower will have paid all fees and expenses incurred by the
Administrative Agent and the Lenders in connection with the preparation of this
Amendment to the extent invoiced on or prior to the date hereof.
6.2 Representations and Warranties. The representations and warranties of
the Borrower set forth in this Agreement are true and correct.
6.3 Prepayment. On the Effective Date, the Borrower shall have made a
mandatory prepayment of General Revolving Loans in an amount equal to 100% of
the Borrower's or any Subsidiary's current overnight investment accounts
maintained at Xxxxxxx Xxxxx or any other institution, and such accounts shall
thereafter be closed by the Borrower and remain closed.
SECTION 7 MISCELLANEOUS.
7.1 Captions. The recitals to this Agreement and the section captions used
in this Agreement are for convenience only and do not affect the construction of
this Agreement.
7.2 Governing Law; Severability. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO, NOTWITHSTANDING ITS
CONFLICTS OF LAWS PRINCIPLES. Wherever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is prohibited by or
invalid under such law, such provision will be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
7.3 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart will be deemed to be an original, but all such counterparts together
constitute but one and the same Agreement.
7.4 Successors and Assigns. This Agreement is binding upon the Borrower,
the Lenders and the Administrative Agent and their respective successors and
assigns, and inures to the sole benefit of the Borrower, the Lenders and the
Administrative Agent and their respective successors and assigns. The Borrower
has no right to assign its rights or delegate its duties under this Agreement.
7.5 Continued Effectiveness. Notwithstanding anything contained in this
Agreement, the terms of this Agreement are not intended to and do not serve to
effect a novation as to the Credit Agreement or any other Credit Document. The
parties to this Agreement expressly do not intend to extinguish the Credit
Agreement or any other Credit Document. Instead, the parties to this Agreement
expressly intend to reaffirm the indebtedness created under the Credit Agreement
and the other Credit Documents. The Credit Agreement and the other Credit
Documents remain in full force and effect and the terms and provisions of the
Credit Agreement and the other Credit Documents are ratified and confirmed.
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7.6 Release. The Borrower fully releases, remises, acquits, irrevocably
waives and forever discharges each of the Lenders and Administrative Agent,
together with their respective predecessors, successors, assigns, subsidiaries,
affiliates and agents and all of their respective past, present and future
officers, directors, shareholders, employees, contractors and attorneys and the
predecessors, heirs, successors and assigns of each of them, from and with
respect to any and all actions and causes of action, suits, disputes,
controversies, claims, debts, sums of money, offset rights, defenses to payment,
agreements, promises, notes, bonds, bills, covenants, losses, damages,
judgments, executions and demands of whatever nature, known or unknown, whether
in contract, in tort or otherwise, at law or in equity, for money damages or
dues, recovery of property, or specific performance, in respect of the
Forbearance Agreement, the Credit Agreement, the other Credit Documents and the
transactions contemplated thereby, all the foregoing being with full knowledge
and understanding of the circumstances and effect thereof and after having
consulted legal counsel with respect thereto.
7.7 Tolling. Any and all statute of limitations, repose or similar legal
constraints on the time by which a claim must be filed, a person given notice
thereof, or asserted, that expire, run or lapse during the Forbearance Period on
any claims that the Lenders may have against the Borrower or any of its
Subsidiaries or any person related to any of them (collectively, the
"Forbearance Period Statutes of Limitation") will be tolled during the
Forbearance Period. The Borrower (on behalf of itself and its Subsidiaries)
waives any defense it may have against the Lenders under the Forbearance Period
Statutes of Limitation, applicable law or otherwise solely as to the expiration,
running or lapsing of the Forbearance Period Statutes of Limitation during the
Forbearance Period.
7.8 Revival Of Obligations. If all or any part of any payment under or on
account of the Credit Agreement, the other Credit Documents, this Agreement or
any agreement, instrument or other document executed or delivered by Borrower in
connection with this Agreement is invalidated, set aside, declared or found to
be void or voidable or required to be repaid to the issuer or to any trustee,
custodian, receiver, conservator, master, liquidator or any other person
pursuant to any bankruptcy law or pursuant to any common law or equitable cause
then, to the extent of such invalidation, set aside, voidness, voidability or
required repayment, such payment would be deemed to not have been paid, and the
obligations of the Borrower in respect thereof would be immediately and
automatically revived without the necessity of any action by the Lenders.
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7.9 JURY TRIAL WAIVER. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE CREDIT AGREEMENT,
THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS PARAGRAPH.
[Remainder of page intentionally blank; signature pages follow.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as of
the date first written above.
MCSi, Inc., PNC BANK, NATIONAL ASSOCIATION,
a Maryland corporation which is individually as a Lender, a
the successor by merger to Miami Letter of Credit Issuer, the Swing
Computer Supply Corporation, an Line Lender and as Administrative
Ohio corporation Agent
By: /s/ D. Xxxxxx Xxxxxxxxxx By: /s/ Xxxxxx X. XxXxxx
------------------------------ ------------------------------
Name: D. Xxxxxx Xxxxxxxxxx Name: Xxxxxx X. XxXxxx
Title: President and CEO Title: Senior Vice President
NATIONAL CITY BANK, LASALLE BANK, NATIONAL ASSOCIATION
individually as a Lender and
as Documentation Agent
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------------ ------------------------------
Name: Xxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Senior Vice President Title: FVP
THE PROVIDENT BANK US BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------ ------------------------------
Name: Xxxxxxx X. Xxx Name: Xxxxxxx X. Xxxxxx
Title: Vice President Title: Assistant Vice President
FIFTH THIRD BANK THE HUNTINGTON NATIONAL BANK
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxx X. Xxxxx
----------------------------- ------------------------------
Name: Xxxxx Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President Title: Senior Vice President
