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FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
XXXX MICROPRODUCTS INC.
AND
THE BANKS NAMED HEREIN
AND
CALIFORNIA BANK & TRUST,
AS AGENT FOR THE LENDERS
OCTOBER 10, 2000
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CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
SECTION I. INTERPRETATION.........................................2
1.01. Definitions................................................2
1.02. GAAP.......................................................2
1.03. Headings...................................................2
1.04. Plural Terms...............................................2
1.05. Time.......................................................2
1.06. Governing Law..............................................2
1.07. Construction...............................................2
1.08. Calculation of Interest and Fees...........................2
1.09. Other Interpretive Provisions..............................3
SECTION II. CREDIT FACILITIES......................................3
2.01. Revolving Loan Facility....................................3
2.02. Letter of Credit Sub-facility..............................6
2.03. Amount Limitations, Commitment Reductions, Etc............11
2.04. Fees......................................................13
2.05. Prepayments...............................................13
2.06. Other Payment Terms.......................................14
2.07. Notes and Interest Account................................15
2.08. Loan Funding..............................................16
2.09. Pro Rata Treatment........................................17
2.10. Change of Circumstances...................................18
2.11. Taxes on Payments.........................................20
2.12. Funding Loss Indemnification..............................21
2.13. Security..................................................22
SECTION III. CONDITIONS PRECEDENT..................................23
3.01. Conditions Precedent to Initial Revolving Loans...........23
3.02. Conditions Precedent to Each Credit Event.................23
3.03. Covenant to Deliver.......................................24
SECTION IV. REPRESENTATIONS AND WARRANTIES........................24
4.01. Borrower's Representations and Warranties.................24
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PAGE
4.02. Reaffirmation.............................................28
SECTION V. COVENANTS.............................................28
5.01. Affirmative Covenants.....................................28
5.02. Negative Covenants........................................32
SECTION VI. DEFAULT...............................................34
6.01. Events of Default.........................................34
6.02. Remedies..................................................36
SECTION VII. AGENT AND RELATIONS AMONG LENDERS.....................36
7.01. Appointment, Powers and Immunities........................36
7.02. Reliance by Agents........................................37
7.03. Defaults..................................................37
7.04. Indemnification...........................................37
7.05. Non-Reliance..............................................38
7.06. Resignation or Removal of Agent...........................38
7.07. Agent in its Individual Capacity..........................38
SECTION VIII. MISCELLANEOUS.........................................39
8.01. Notices...................................................39
8.02. Expenses..................................................40
8.03. Indemnification...........................................40
8.04. Waivers; Amendments.......................................40
8.05. Successors and Assigns....................................41
8.06. Setoff; Security Interest.................................44
8.07. No Third Party Rights.....................................45
8.08. Partial Invalidity........................................45
8.09. Arbitration...............................................45
8.10. Jury Trial................................................47
8.11. Counterparts..............................................47
SECTION IX. EFFECTIVE DATE OF RESTATED CREDIT AGREEMENT...........47
9.01. Effective Date............................................47
9.02. Loans Under Existing Credit Agreement.....................47
9.03. Effect of Amendment and Restatement.......................47
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SCHEDULES
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I Lenders (Preamble)
1.01 Definitions (1.01)
3.01 Effective Date Conditions Precedent
4.01(g) Material Litigation
4.01(q) Subsidiaries
EXHIBITS
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A Notice of Revolving Loan Borrowing (2.01(b))
B Notice of Revolving Loan Conversion (2.01(d))
C Notice of Revolving Loan Interest Period Selection (2.01(e))
D Revolving Loan Note (2.07(a))
E Fourth Amended and Restated Security Agreement (2.13(a), 9.03)
F Fourth Amended and Restated Pledge Agreement (2.13(a), 9.03)
G Restated Xxxx Canada Guaranty (2.13(a))
H Restated Xxxx Canada Pledge Agreement (2.13(a))
I Restated Xxxx-Tenex Guaranty (2.13(a))
J Restated Xxxx-Tenex Security Agreement (2.13(a))
K Restated Xxxx-Future Tech Guaranty (2.13(a))
L Restated Xxxx-Future Tech Security Agreement (2.13(a))
M Restated RDI Guaranty (2.13(a))
N Restated RDI Security Agreement (2.13(a))
O Restated RDI Pledge Agreement (2.13(a))
P Restated Xxxxx Europe Guaranty (2.13(a))
Q Borrowing Base Certificate (5.01(a))
R Assignment Agreement (8.05(c))
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EXECUTION VERSION
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this "Restated
Credit Agreement"), dated as of October 10, 2000, is entered into by and among:
(1) XXXX MICROPRODUCTS INC., a California corporation
("Borrower");
(2) Each of the financial institutions listed in Schedule I
hereto, as amended from time to time (such financial institutions to be
referred to herein collectively as the "Lenders"); and
(3) CALIFORNIA BANK & TRUST, a California banking corporation
("CB&T"), as agent for the Lenders (in such capacity, "Agent").
RECITALS
A. Borrower, Agent and Lenders are parties to a Third Amended and
Restated Credit Agreement dated as of November 12, 1998 (as amended to the date
hereof, the "Existing Credit Agreement"), pursuant to which the Lenders have
provided to Borrower a revolving line of credit facility and a letter of credit
sub-facility upon the terms and subject to the conditions set forth therein.
B. Borrower and CB&T executed a letter agreement dated July 6, 2000
amending the Existing Credit Agreement. Pursuant to such letter agreement, each
of Union Bank of California, N.A. ("Union Bank"), Comerica Bank California
("Comerica"), Sanwa Bank California ("Sanwa"), U.S. Bank National Association
("U.S. Bank") and IBM Credit Corporation ("IBM Credit") had no further
obligation under the Existing Credit Agreement to extend credit to the Borrower.
C. Pursuant to such letter agreement, Borrower and CB&T agreed that
they will use their best efforts to execute an amendment to the Existing Credit
Agreement and related Credit Documents to more fully effectuate the amendments
set forth in such letter agreement (together with such additional modifications
as Borrower and CB&T may deem appropriate).
D. For convenience of reference, Borrower and CB&T wish to restate the
Existing Credit Agreement as so amended in its entirety.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants contained herein, the parties hereto hereby agree that the Existing
Credit Agreement shall be amended and restated as of the date hereof to read in
its entirety as follows:
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SECTION I. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Restated Credit
Agreement or any other Credit Document, each term set forth in Schedule 1.01,
when used in this Restated Credit Agreement or any other Credit Document, shall
have the respective meaning given to that term in Schedule 1.01 or in the
provision of this Restated Credit Agreement or other Credit Document referenced
in Schedule 1.01.
1.02. GAAP. Unless otherwise indicated in this Restated Credit
Agreement or any other Credit Document, all accounting terms used in this
Restated Credit Agreement or any other Credit Document shall be construed, and
all accounting and financial computations hereunder or thereunder shall be
computed, in accordance with GAAP. If GAAP changes during the term of this
Restated Credit Agreement such that any covenants contained herein would then be
calculated in a different manner or with different components, Borrower, the
Lenders and Agent agree to negotiate in good faith to amend this Restated Credit
Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating Borrower's financial condition to substantially the same
criteria as were effective prior to such change in GAAP; provided, however,
that, until Borrower, the Lenders and Agent so amend this Restated Credit
Agreement, all such covenants shall be calculated in accordance with GAAP as in
effect immediately prior to such change.
1.03. Headings. Headings in this Restated Credit Agreement and each of
the other Credit Documents are for convenience of reference only and are not
part of the substance hereof or thereof.
1.04. Plural Terms. All terms defined in this Restated Credit Agreement
or any other Credit Document in the singular form shall have comparable meanings
when used in the plural form and vice versa.
1.05. Time. All references in this Restated Credit Agreement and each
of the other Credit Documents to a time of day shall mean San Francisco,
California time, unless otherwise indicated.
1.06. Governing Law. This Restated Credit Agreement and each of the
other Credit Documents shall be governed by and construed in accordance with the
laws of the State of California without reference to conflicts of law rules.
1.07. Construction. This Restated Credit Agreement is the result of
negotiations among, and has been reviewed by, Borrower, each Lender, Agent and
their respective counsel. Accordingly, this Restated Credit Agreement shall be
deemed to be the product of all parties hereto, and no ambiguity shall be
construed in favor of or against Borrower, any Lender or Agent.
1.08. Calculation of Interest and Fees. All calculations of interest
and fees under this Restated Credit Agreement and the other Credit Documents for
any period (a) shall include the first day of such period and exclude the last
day of such period and (b) shall be calculated on the basis of a year of 360
days for actual days elapsed.
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1.09. Other Interpretive Provisions. References in this Restated Credit
Agreement to "Recitals," "Sections," "Paragraphs," "Subparagraphs," "Exhibits"
and "Schedules" are to recitals, sections, paragraphs, subparagraphs, exhibits
and schedules herein and hereto unless otherwise indicated. References in this
Restated Credit Agreement and each of the other Credit Documents to any
document, instrument or agreement (a) shall include all exhibits, schedules and
other attachments thereto, (b) shall include all documents, instruments or
agreements issued or executed in replacement thereof, and (c) shall mean such
document, instrument or agreement, or replacement or predecessor thereto, as
amended, modified and supplemented from time to time and in effect at any given
time. The words "hereof," "herein" and "hereunder" and words of similar import
when used in this Restated Credit Agreement or any other Credit Document shall
refer to this Restated Credit Agreement or such other Credit Document, as the
case may be, as a whole and not to any particular provision of this Restated
Credit Agreement or such other Credit Document, as the case may be. The words
"include" and "including" and words of similar import when used in this Restated
Credit Agreement or any other Credit Document shall not be construed to be
limiting or exclusive.
SECTION II. CREDIT FACILITIES.
2.01. Revolving Loan Facility.
(a) Revolving Loan Availability. Subject to the terms and
conditions of this Restated Credit Agreement (including the amount
limitations set forth in Paragraph 2.03 and the conditions set forth in
Section III), each Lender severally agrees to advance to Borrower from
time to time during the period beginning on the Effective Date and
ending on May 31, 2001 (the "Revolving Loan Maturity Date") such loans
as Borrower may request under this Paragraph 2.01 (individually, a
"Revolving Loan"); provided, however, that the (i) aggregate principal
amount of all Revolving Loans made by such Lender at any time
outstanding shall not exceed such Lender's Revolving Loan Commitment at
such time and (ii) the aggregate principal amount of all Revolving
Loans made by all Lenders at any time outstanding shall not exceed the
Total Revolving Loan Commitment at such time. All Revolving Loans shall
be made on a pro rata basis by the Lenders in accordance with their
respective Proportionate Shares, with each Revolving Loan Borrowing to
be comprised of a Revolving Loan by each Lender equal to such Lender's
Proportionate Share of such Revolving Loan Borrowing. Except as
otherwise provided herein, Borrower may borrow, repay and reborrow
Revolving Loans until the Revolving Loan Maturity Date.
(b) Notice of Revolving Loan Borrowing. Borrower shall request
each Revolving Loan Borrowing by delivering to Agent an irrevocable
written notice in the form of Exhibit A, appropriately completed (a
"Notice of Revolving Loan Borrowing"), which specifies, among other
things:
(i) The principal amount of the requested Revolving
Loan Borrowing;
(ii) Whether the requested Revolving Loan Borrowing
is to consist of (A) Revolving Loans which bear interest as
provided in clause (i) of Subparagraph 2.01(c) (individually,
a "Revolving Prime Rate Loan") or (B)
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Revolving Loans which bear interest as provided in clause (ii)
of Subparagraph 2.01(c) (individually, a "Revolving LIBOR
Loan");
(iii) If the requested Revolving Loan Borrowing is to
consist of Revolving LIBOR Loans, the initial Interest Period
selected by Borrower for such Revolving Loans in accordance
with Subparagraph 2.01(e); and
(iv) The date of the requested Revolving Loan
Borrowing, which shall be a Business Day.
Borrower shall give each Notice of Revolving Loan Borrowing to Agent at
least three (3) Business Days before the date of the requested
Revolving Loan Borrowing in the case of a Revolving Loan Borrowing
consisting of Revolving LIBOR Loans and at least one (1) Business Day
before the date of the requested Revolving Loan Borrowing in the case
of a Revolving Loan Borrowing consisting of Revolving Prime Rate Loans.
Each Notice of Revolving Loan Borrowing shall be delivered by
first-class mail or facsimile to Agent at the office or facsimile
number and during the hours specified in Paragraph 8.01; provided,
however, that Borrower shall promptly deliver to Agent the original of
any Notice of Revolving Loan Borrowing initially delivered by
facsimile. Each Revolving Loan Borrowing consisting of Revolving Prime
Rate Loans shall be in the minimum amount of $100,000 or an integral
multiple of $100,000 in excess thereof. Each Revolving Loan Borrowing
consisting of Revolving LIBOR Loans shall be in the minimum amount of
$500,000 or an integral multiple of $100,000 in excess thereof. Agent
shall notify each Lender no later than 5:00 p.m. California time on the
date of receipt of each such Notice of Revolving Loan Borrowing of the
contents thereof and of the amount and Type of each Revolving Loan to
be made by such Lender as part of the requested Revolving Loan
Borrowing.
(c) Revolving Loan Interest Rates. Borrower shall pay interest
on the unpaid principal amount of each Revolving Loan from the date of
such Revolving Loan until the maturity thereof, at one of the following
rates per annum:
(i) During such periods as such Revolving Loan is a
Revolving Prime Rate Loan, at a rate per annum equal to the
Prime Rate, such rate to change from time to time as the Prime
Rate shall change; and
(ii) During such periods as such Revolving Loan is a
Revolving LIBOR Loan, at a rate per annum equal at all times
during each Interest Period for such Revolving Loan to the
LIBO Rate for such Interest Period plus the Applicable Margin
therefor, such rate to change from time to time during such
Interest Period as the Applicable Margin shall change;
provided, however, that each of the rates set forth in clauses (i) and
(ii) of this Subparagraph 2.01(c) shall be increased by one percent
(1.00%) per annum on the date an Event of Default occurs and shall
continue at such increased rate unless and until such Event of Default
is waived in accordance with this Restated Credit Agreement. All
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Revolving Loans in each Revolving Loan Borrowing shall, at any given
time prior to maturity, bear interest at one, and only one, of the
above rates.
(d) Conversion of Revolving Loans. Borrower may convert all
Revolving Loans in any Revolving Loan Borrowing consisting of Revolving
Prime Rate Loans into Revolving LIBOR Loans and all Revolving Loans in
any Revolving Loan Borrowing consisting of Revolving LIBOR Loans into
Revolving Prime Rate Loans; provided, however, that any conversion of
Revolving LIBOR Loans into Revolving Prime Rate Loans shall be made on,
and only on, the last day of an Interest Period for such Revolving
LIBOR Loans. Borrower shall request such a conversion by an irrevocable
written notice to Agent in the form of Exhibit B, appropriately
completed (a "Notice of Revolving Loan Conversion"), which specifies,
among other things:
(i) The Revolving Loan Borrowing which is to be
converted;
(ii) The Type of Loans into which such Revolving
Loans are to be converted;
(iii) If such Revolving Loans are to be converted
into Revolving LIBOR Loans, the initial Interest Period
selected by Borrower for such Revolving Loans in accordance
with Subparagraph 2.01(e); and
(iv) The date of the requested conversion, which
shall be a Business Day.
Borrower shall give each Notice of Revolving Loan Conversion to Agent
at least three (3) Business Days before the date of the requested
conversion in the case of a conversion into Revolving LIBOR Loans and
at least one (1) Business Day before the date of the requested
conversion in the case of a conversion into Revolving Prime Rate Loans.
Each Notice of Revolving Loan Conversion shall be delivered by
first-class mail or facsimile to Agent at the office or to the
facsimile number and during the hours specified in Paragraph 8.01;
provided, however, that Borrower shall promptly deliver to Agent the
original of any Notice of Revolving Loan Conversion initially delivered
by facsimile. Agent shall notify each Lender no later than 5:00 p.m.
California time on the date of receipt of each such Notice of Revolving
Loan Conversion of the contents thereof and of the amount and Type of
each Revolving Loan to be converted by such Lender as part of the
requested Revolving Loan Conversion.
(e) Revolving LIBOR Loan Interest Periods.
(i) The initial and each subsequent Interest Period
selected by Borrower for a Revolving LIBOR Loan shall be
thirty (30), sixty (60), ninety (90), one-hundred twenty
(120), one-hundred fifty (150) or one-hundred eighty (180)
days; provided, however, that (A) any Interest Period which
would otherwise end on a day which is not a Business Day shall
be extended to the next succeeding Business Day unless such
next Business Day falls in another calendar month, in which
case such Interest Period shall end on the immediately
preceding Business Day; (B) any Interest Period which begins
on the last Business Day of a
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calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a
calendar month; and (C) no Interest Period shall end after the
Revolving Loan Maturity Date.
(ii) Borrower shall notify Agent by an irrevocable
written notice in the form of Exhibit C, appropriately
completed (a "Notice of Revolving Loan Interest Period
Selection"), at least three (3) Business Days prior to the
last day of each Interest Period for Revolving LIBOR Loans of
the Interest Period selected by Borrower for the next
succeeding Interest Period for such Revolving LIBOR Loans.
Each Notice of Revolving Loan Interest Period Selection shall
be given by first-class mail or facsimile to the office or the
facsimile number and during the hours specified in Paragraph
8.01; provided, however, that Borrower shall promptly deliver
to Agent the original of any Notice of Revolving Loan Interest
Period Selection initially delivered by facsimile. If Borrower
fails to notify Agent of the next Interest Period for
Revolving LIBOR Loans in accordance with this Subparagraph
2.01(e), such Revolving Loans shall automatically convert to
Revolving Prime Rate Loans on the last day of the current
Interest Period therefor. Agent shall notify each Lender no
later than 5:00 p.m. California time on the date of receipt of
each such Notice of Revolving Loan Interest Period Selection
of the contents thereof and of the Interest Period selected
for each Revolving Loan.
(f) Scheduled Revolving Loan Payments. Borrower shall repay to
each Lender on the Revolving Loan Maturity Date the unpaid principal
amount of each Revolving Loan made by such Lender. Borrower shall pay
accrued interest on the unpaid principal amount of each Revolving Loan
(A) in the case of a Revolving Prime Rate Loan, on the last Business
Day in each month, (B) in the case of a Revolving LIBOR Loan, on the
last day of each Interest Period therefor (and, if any such Interest
Period is longer than three (3) months, every three (3) months); and
(C) in the case of all Revolving Loans, upon prepayment (to the extent
thereof) and at maturity.
(g) Purpose. Borrower shall use the proceeds of the Revolving
Loans made by the Lenders on or after the Effective Date (i) to
refinance the loans outstanding under the Existing Credit Agreement on
the Effective Date and (ii) for Borrower's working capital and general
corporate needs (including acquisitions approved by the Lenders from
time to time in their sole discretion).
2.02. Letter of Credit Sub-facility.
(a) Letter of Credit Availability. Subject to the terms and
conditions of this Restated Credit Agreement (including the amount
limitations set forth in Paragraph 2.03), Issuing Lender shall issue on
behalf of Borrower from time to time during the period beginning on the
date hereof and ending on the date which is fifteen (15) days prior to
the Revolving Loan Maturity Date (the "LC Facility Expiration Date")
such letters of credit as Borrower may request under this Paragraph
2.02 (individually, a "Letter of Credit"); provided, however, as
follows:
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(i) The aggregate amount available for drawing under
all Letters of Credit at any time outstanding shall not exceed
Twenty-Five Million Dollars ($25,000,000) (such amount, as
reduced from time to time pursuant to this Restated Credit
Agreement, to be referred to herein as the "LC Commitment").
(ii) Each Letter of Credit shall be (A) an
irrevocable standby Letter of Credit and the beneficiary or
beneficiaries under each Letter of Credit shall be the lender
or lenders providing the Canadian dollar revolving line of
credit facility to be entered into by Bell-Tenex or (B) an
irrevocable standby Letter of Credit to secure trade payables
in the ordinary course of Borrower's business (provided such
trade payables are not overdue on the date of issuance of such
Letter of Credit).
(iii) Each Letter of Credit shall expire on or prior
to the LC Facility Expiration Date.
(iv) Each Letter of Credit shall be governed by the
Uniform Customs and Practices for Documentary Credits as most
recently published by the International Chamber of Commerce
(the "UCP") prior to the date of issuance of such Letter of
Credit and the terms of the UCP are hereby incorporated by
reference with respect to each Letter of Credit.
(v) Each Letter of Credit shall be in a form
reasonably acceptable to Issuing Lender.
Except as otherwise provided herein, Borrower may request Letters of
Credit, cause or allow Letters of Credit to expire and request
additional Letters of Credit until the LC Facility Expiration Date.
(b) LC Application. Borrower shall request each Letter of
Credit by delivering to Issuing Lender (with a copy to Agent, if Agent
is not the Issuing Lender) an irrevocable written application in a form
reasonably acceptable to Issuing Lender (it being understood that such
form shall not contain terms inconsistent with the terms set forth in
this Restated Credit Agreement), appropriately completed (an "LC
Application"), which specifies, among other things:
(i) The stated amount of the requested Letter of
Credit;
(ii) The name and address of the beneficiary of the
requested Letter of Credit;
(iii) The expiration date of the requested Letter of
Credit if such date is prior to the LC Facility Expiration
Date;
(iv) The documentary conditions for drawing under the
requested Letter of Credit;
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(v) The date of issuance for the requested Letter of
Credit, which shall be a Business Day; and
(vi) The aggregate amount which will be available for
drawing under all outstanding Letters of Credit (including the
requested Letter of Credit), which amount shall not exceed the
LC Commitment.
Borrower shall give each LC Application to Issuing Lender at least
three (3) Business Days before the proposed date of issuance of the
requested Letter of Credit. Each LC Application shall be delivered by
an established express courier service, first-class mail or facsimile
to Issuing Lender with a copy thereof to Agent at their respective
offices or facsimile numbers and during the hours specified in
Paragraph 8.01; provided, however, that Borrower shall promptly deliver
to Issuing Lender the original of any LC Application initially
delivered by facsimile. Agent shall promptly notify each Lender of the
contents of each LC Application. In the event of any conflict between
the terms of this Restated Credit Agreement and the terms of any LC
Application, the terms of this Restated Credit Agreement shall control.
(c) Disbursement and Reimbursement.
(i) Disbursement. Issuing Lender will notify Borrower
by facsimile forthwith upon receipt of the presentment of any
demand for payment under any Letter of Credit, together with
notice of the amount of such payment and the date such payment
shall be made; provided, however that Issuing Lender shall
incur no liability to Borrower or any third party for failure
to so notify. Subject to the terms and provisions of such
Letter of Credit, Issuing Lender shall make such payment (a
"Drawing Payment") to the appropriate beneficiary.
(ii) Time of Reimbursement. Not later than 11:00 a.m.
on the day each Drawing Payment is to be made by Issuing
Lender, Borrower shall make or cause to be made to Issuing
Lender a payment in the amount of such Drawing Payment (a
"Reimbursement Payment"); provided, however, that Borrower
shall make such Reimbursement Payment to, or cause such
Reimbursement Payment to be made to, Agent for the benefit of
the Lenders if, prior to the time such Reimbursement Payment
is made, Issuing Lender has notified Borrower that it has
requested the Lenders pursuant to clause (ii) of Subparagraph
2.02(d) to pay to Issuing Lender their respective
Proportionate Shares of the Drawing Payment made by Issuing
Lender. If any such Reimbursement Payment is made to Agent,
Agent shall promptly pay to each Lender which has paid its
Proportionate Share of the Drawing Payment, such Lender's
Proportionate Share of the Reimbursement Payment and shall
promptly pay to Issuing Lender the balance of such
Reimbursement Payment.
(iii) Reimbursement Obligation Absolute. The
obligation of Borrower to reimburse Issuing Lender or the
Lenders, as the case may be, for Drawing Payments (such
obligation to be referred to herein as a "Reimbursement
Obligation") shall be absolute, unconditional and irrevocable,
and shall be
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performed strictly in accordance with the terms of this
Restated Credit Agreement under and without regard to any
circumstances, including, without limitation (A) any lack of
validity or enforceability of any of the Credit Documents, (B)
the existence of any claim, setoff, defense or other right
which Borrower 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 transferee may be acting),
Issuing Lender, Agent, any Lender or any other Person, whether
in connection with this Restated Credit Agreement, the
transactions contemplated herein or in the other Credit
Documents, or in any unrelated transaction, (C) any breach of
contract or dispute between Borrower, any beneficiary or any
transferee of any Letter of Credit (or any Persons for whom
any such beneficiary or transferee may be acting), Issuing
Lender, Agent, any Lender or any other Person, (D) any demand,
statement or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein proving
to be untrue or inaccurate in any respect, (E) payment by
Issuing Lender under any Letter of Credit against presentation
of a demand for payment which does not comply with the terms
of such Letter of Credit provided that Issuing Lender has used
reasonable care in examining all documents presented to it in
connection with such demand in accordance with the UCP, (F)
any non-application or misapplication by any beneficiary or
any transferee of any Letter of Credit (or any Persons for
whom any such beneficiary or transferee may be acting) of the
proceeds of any drawing under such Letter of Credit or (G) any
delay, extension of time, renewal, compromise or other
indulgence or modification granted or agreed to by Issuing
Lender, Agent, or any Lender, with or without notice to or
approval by Borrower (unless such notice or approval is
required by this Restated Credit Agreement or applicable law),
with respect to Borrower's indebtedness under this Restated
Credit Agreement; provided, that this Subparagraph 2.02(c)
shall not abrogate any right which Borrower may have to seek
to enjoin any drawing under any Letter of Credit or to recover
damages from Issuing Lender, Agent, or any Lender pursuant to
Subparagraph 2.02(e).
(d) Lender Participations; Revolving Loan Funding.
(i) Participation Agreement. Each Lender severally,
unconditionally and irrevocably agrees with Issuing Lender to
participate in the extension of credit arising from the
issuance of each Letter of Credit in an amount equal to such
Lender's Proportionate Share of the stated amount of such
Letter of Credit from time to time, and the issuance of each
Letter of Credit shall be deemed a confirmation by each such
Lender of such participation in such amount.
(ii) Participation Funding. Issuing Lender may
request the Lenders to fund their participations in Letters of
Credit by paying to Issuing Lender all or any portion of any
Drawing Payment made or to be made by Issuing Lender under any
Letter of Credit. Issuing Lender shall make such a request by
delivering to Agent (with a copy to Borrower), at any time
after the drawing for which such payment is requested has been
made upon Issuing Lender, a written request for such payment
which specifies the amount of such Drawing Payment and the
date on
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which such Drawing Payment is to be made or was made;
provided, however, that Issuing Lender shall not request the
Lenders to make any payment under this Subparagraph 2.02(d) in
connection with any portion of a Drawing Payment for which
Issuing Lender has been reimbursed from a Reimbursement
Payment by Borrower unless such Reimbursement Payment has been
thereafter recovered by Borrower. Agent shall promptly notify
each Lender of the contents of each such request and of such
Lender's Proportionate Share of the applicable portion of such
Drawing Payment. Promptly following receipt of such notice
from Agent, each Lender shall pay to Agent, for the benefit of
Issuing Lender, such Lender's Proportionate Share of the
applicable portion of such Drawing Payment.
(iii) Funding Through Revolving Loans. At any time
any Reimbursement Obligations are outstanding, Agent may or,
upon the written request of Issuing Lender (if Borrower is not
then the subject of a bankruptcy proceeding), shall (subject
to the terms and conditions of this Subparagraph 2.02(d)),
initiate a Revolving Loan Borrowing in an amount not exceeding
the aggregate amount of such outstanding Reimbursement
Obligations and use the proceeds of such Loan to repay all or
a portion of such Reimbursement Obligations. Agent shall
initiate such a Revolving Loan Borrowing by delivering to each
Lender (with a copy to Borrower) a written notice which
specifies the aggregate amount of outstanding Reimbursement
Obligations, the amount of the Revolving Loan Borrowing, the
date of such Revolving Loan Borrowing and the amount of the
Loan to be made by such Lender as part of such Revolving Loan
Borrowing. Each Lender shall make available to Agent funds in
the amount of its Proportionate Share of such Loan as provided
in Subparagraph 2.09(a). After receipt of such funds, Agent
shall promptly disburse such funds to Issuing Lender and the
Lenders, as appropriate, in payment of the outstanding
Reimbursement Obligations.
(iv) Obligations Absolute. Each Lender's obligations
to fund its participations under this Subparagraph 2.02(d)
shall be absolute, unconditional and irrevocable and shall not
be affected by (A) the occurrence or existence of any Default
or Event of Default, (B) any failure to satisfy any condition
set forth in Section III, (C) any event or condition which
might have a Material Adverse Effect, (D) the failure of any
other Lender to make any payment under this Subparagraph
2.02(d), (E) any right of offset, abatement, withholding or
reduction which such Lender may have against Issuing Lender,
Agent, any other Lender or Borrower, (F) any event,
circumstance or condition set forth in Subparagraph 2.02(c) or
Subparagraph 2.02(e), or (G) any other event, circumstance or
condition whatsoever, whether or not similar to any of the
foregoing; provided, that nothing in this Paragraph 2.02 shall
prejudice any right which any Lender may have against Issuing
Lender for any action by Issuing Lender which constitutes
gross negligence or willful misconduct.
(e) Liability of Issuing Lender, Etc. Borrower agrees that
none of Issuing Lender, Agent or any other Lender (nor any of their
respective directors, officers or employees) shall be liable or
responsible for (i) the use which may be made of any Letter of Credit
or
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the proceeds of any drawing thereunder or for any acts or omissions of
any beneficiary or transferee thereof in connection therewith; (ii) any
reference which may be made to this Restated Credit Agreement or to any
Letter of Credit in any agreements, instruments or other documents
relating to obligations secured by such Letter of Credit; (iii) the
validity, sufficiency or genuineness of documents, or of any
endorsement(s) thereon, even if such documents should in fact prove to
be in any or all respects invalid, fraudulent or forged or any
statement therein prove to be untrue or inaccurate in any respect
whatsoever; (iv) payment by Issuing Lender against presentation of
documents which do not comply with the terms of any Letter of Credit,
including failure of any documents to bear any reference or adequate
reference to any Letter of Credit, provided that Issuing Lender has
used reasonable care in examining all documents presented to it in
connection with a demand on any Letter of Credit in accordance with the
UCP; or (v) any other circumstances whatsoever in making or failing to
make payment under any Letter of Credit, except only that Issuing
Lender shall be liable to Borrower for acts or events described in
clauses (i) through (v) above, to the extent, but only to the extent,
of any damages suffered by Borrower (excluding consequential damages)
which Borrower proves were caused by (A) Issuing Lender's willful
misconduct, bad faith or gross negligence in determining whether a
drawing made under any Letter of Credit complies with the terms and
conditions therefor stated in such Letter of Credit or (B) Issuing
Lender's willful misconduct, bad faith or gross negligence in failing
to pay under any Letter of Credit after a drawing by the beneficiary
thereof strictly complying with the terms and conditions of such Letter
of Credit. Without limiting the foregoing, Issuing Lender may accept a
drawing that appears on its face to be in order, without responsibility
for further investigation. The determination of whether a drawing has
been made under any Letter of Credit prior to its expiration or whether
a drawing made under any Letter of Credit is in proper and sufficient
form shall be made by Issuing Lender in its sole discretion, which
determination shall be conclusive and binding upon Borrower to the
extent permitted by law. Borrower hereby waives any right to object to
any payment made under any Letter of Credit with regard to a drawing
request that is in the form provided in such Letter of Credit but which
varies with respect to punctuation, capitalization, spelling or similar
matters of form.
(f) Reports of Issuing Lender. While any Letter of Credit is
outstanding, Issuing Lender shall on a monthly basis provide to Agent
or any Lender such information regarding the Letters of Credit as Agent
or such Lender may reasonably request, including the Letters of Credit
outstanding, the stated amounts of outstanding Letters of Credit, the
expiration dates of outstanding Letters of Credit, the names of the
beneficiaries of outstanding Letters of Credit, the amounts of unpaid
Reimbursement Obligations and the amounts and times of Drawing Payments
and Reimbursement Payments.
(g) Purpose. Borrower shall use the Letters of Credit solely
as provided in clause (ii) of Subparagraph 2.02(a).
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2.03. Amount Limitations, Commitment Reductions, Etc.
(a) Borrowing Base.
(i) The aggregate principal amount of all Revolving
Loans outstanding at any time, the aggregate amount available
for drawing under all Letters of Credit then outstanding, the
aggregate amount of all Reimbursement Obligations then
outstanding and the aggregate Rate Contract Maximum Exposure
then outstanding (such sum to be referred to herein as the
"Outstanding Facilities Credit") shall not exceed an amount
(the "Borrowing Base") equal to the lesser of:
(A) The Total Revolving Loan Commitment at
such time; and
(B) The sum at such time of:
(1) eighty percent (80%) of
Eligible Accounts; and
(2) forty percent (40%) of Eligible
Inventory.
(ii) For the purposes of this Restated Credit
Agreement, the Borrowing Base on any date of determination
shall be presumed to be the Borrowing Base determined pursuant
to the most recent of (A) the latest Borrowing Base
Certificate delivered by Borrower prior to such date of
determination and (B) the latest audit conducted by or on
behalf of Agent or any Lender prior to such date of
determination.
(b) Reduction or Cancellation of Commitments. Borrower may,
upon three (3) Business Days written notice to Agent (and, in the case
of the LC Commitment, to Issuing Lender), permanently reduce the Total
Revolving Loan Commitment or the LC Commitment by the amount of One
Million Dollars ($1,000,000) or an integral multiple of One Million
Dollars ($1,000,000) in excess thereof or cancel the Total Revolving
Loan Commitment or LC Commitment in its entirety; provided, however,
that:
(i) Borrower may not reduce the Total Revolving Loan
Commitment prior to the Revolving Loan Maturity Date, if,
after giving effect to such reduction, the Outstanding
Facilities Credit would exceed the Total Revolving Loan
Commitment; and
(ii) Borrower may not cancel the Total Revolving Loan
Commitment prior to the Revolving Loan Maturity Date, if,
after giving effect to such cancellation, any Revolving Loans
or Letters of Credit would then remain outstanding.
(c) Effect of Commitment Reductions. From the effective date
of any reduction of the Total Revolving Loan Commitment, the Revolving
Loan Commitment Fees payable pursuant to Subparagraph 2.03(b) shall be
computed on the basis of the Total Revolving Loan Commitment as so
reduced. Once reduced or cancelled, the Total Revolving Loan Commitment
may not be increased or reinstated without the prior written consent of
all Lenders. Any reduction of the Total Revolving Loan Commitment
pursuant to this Paragraph 2.03 shall be applied to reduce the Lenders'
respective Revolving Loan
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Commitments pro rata according to their respective Proportionate Shares
at the time of such reduction.
2.04. Fees.
(a) Agent's Fee. Borrower shall pay to Agent, for its own
account, agent's fees in the amounts and at the times set forth in
Agent's Fee Letter.
(b) Revolving Loan Commitment Fees. Borrower shall pay to
Agent, for the benefit of the Lenders as provided in clause (iii) of
Subparagraph 2.09(a), nonrefundable commitment fees (the "Revolving
Loan Commitment Fees") of seventeen and one-half basis points (0.175%)
per annum on the daily average Total Unused Revolving Loan Commitment
for the period beginning on the Effective Date and ending on the
Revolving Loan Maturity Date. Borrower shall pay the Revolving Loan
Commitment Fees in arrears on the last Business Day in each February,
May, August and November (commencing November 30, 2000) and on the
Revolving Loan Maturity Date (or if the Total Revolving Loan Commitment
is cancelled on a date prior to the Revolving Loan Maturity Date, on
such prior date).
(c) Letter of Credit Fees.
(i) Letter of Credit Usage Fee. Borrower shall pay to
Agent, for the benefit of the Lenders and Issuing Lender as
provided in clause (iv) of Subparagraph 2.09(a), a
nonrefundable usage fee for the Letters of Credit (the "LC
Usage Fee") in an amount equal to one percent (1.0%) per year
payable on each anniversary of the issuance of the Letter of
Credit, $5,000 of which shall be an issuance fee payable to
the Issuing Lender as provided in Subparagraph 2.09(a) (the
"LC Issuance Fee").
(ii) Other Letter of Credit Fees. In addition to the
LC Issuance Fee, Borrower shall pay to Agent, for the sole
benefit of Issuing Lender, other standard reasonable fees of
Issuing Lender for drawings under, transfers of and amendments
to any Letter of Credit and other administrative actions
performed by Issuing Lender in connection with any Letter of
Credit, payable at such times and in such amounts as are
consistent with Issuing Lender's standard fee policy at the
time of such amendment or other action.
2.05. Prepayments.
(a) Terms of all Prepayments. Upon the prepayment of any
Revolving Loan (whether such prepayment is an optional prepayment under
Subparagraph 2.05(b), a mandatory prepayment required by Subparagraph
2.05(c) or a mandatory prepayment required by any other provision of
this Restated Credit Agreement or the other Credit Documents,
including, without limitation, a prepayment upon acceleration),
Borrower shall pay to the Lender which made such Revolving Loan (i) all
accrued interest to the date of such prepayment on the amount prepaid,
and (ii) if such prepayment is the prepayment of a Revolving LIBOR Loan
on a day other than the last day of an Interest
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Period for such Revolving LIBOR Loan, all amounts payable to such
Lender pursuant to Paragraph 2.12.
(b) Optional Prepayments. At its option, Borrower may, upon
one (1) Business Day notice to Agent, prepay the Revolving Loans in any
Revolving Loan Borrowing in part, in an aggregate principal amount of
$100,000 or more, or in whole.
(c) Mandatory Prepayments. If, at any time, the Outstanding
Facilities Credit exceeds the Borrowing Base at such time, Borrower
shall immediately prepay Revolving Loans and/or Reimbursement
Obligations then outstanding, and, to the extent necessary, provide to
Agent cash collateral for any then outstanding Letters of Credit, in an
aggregate amount equal to such excess.
(d) Application of Principal Prepayments. If no Event of
Default has occurred and is continuing, all prepayments which are
applied to reduce the principal amount of Revolving Loans shall be
applied to Revolving Loans as directed by Borrower. If Borrower fails
to direct the application of any such principal prepayments or if an
Event of Default has occurred and is continuing, such principal
prepayments shall be applied first to Revolving Loan Borrowings
consisting of Revolving Prime Rate Loans and then to Revolving Loan
Borrowings consisting of Revolving LIBOR in chronological order of
maturity.
2.06. Other Payment Terms.
(a) Place and Manner. Borrower shall make all payments due to
each Lender hereunder by payments to Agent, for the account of such
Lender and such Lender's Applicable Lending Office, at Agent's office,
located at the address specified in Subparagraph 8.01(a), in lawful
money of the United States and in same day or immediately available
funds not later than 10:00 a.m. on the date due. Amounts received after
10:00 a.m. shall be deemed to have been received on the next Business
Day. Agent shall promptly disburse to each Lender no later than 1:00
p.m. California time on the date of such receipt each such payment
received by Agent for such Lender. Borrower hereby requests, directs
and authorizes Agent to effect the payment of all regularly scheduled
principal, interest and fee payments payable by Borrower under this
Restated Credit Agreement or any other Credit Document and all fees and
expenses payable by Borrower pursuant to Paragraph 8.02 by debiting any
deposit account maintained by Borrower with CB&T for the amounts
thereof when due.
(b) Date. Whenever any payment due hereunder shall fall due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included
in the computation of interest or fees, as the case may be.
(c) Late Payments. If any amounts required to be paid by
Borrower under this Restated Credit Agreement or the other Credit
Documents (including, without limitation, principal or interest payable
on any Revolving Loan, any fees or other amounts) remain unpaid after
such amounts are due, Borrower shall pay interest on the aggregate,
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outstanding balance of such amounts from the date due until those
amounts are paid in full at a per annum rate equal to the Prime Rate
plus two percent (2.00%), such rate to change from time to time as the
Prime Rate shall change.
(d) Application of Payments. All payments hereunder shall be
applied first to unpaid fees, costs and expenses then due and payable
under this Restated Credit Agreement or the other Credit Documents,
second to accrued interest then due and payable under this Restated
Credit Agreement or the other Credit Documents and finally to reduce
the principal amount of outstanding Revolving Loans.
(e) Failure to Pay Agent. Unless Agent shall have received
notice from Borrower at least one (1) Business Day prior to the date on
which any payment is due to the Lenders hereunder that Borrower will
not make such payment in full, Agent may assume that Borrower has made
such payment in full to Agent on such date and Agent may, in reliance
upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to
the extent Borrower shall not have so made such payment in full to
Agent, such Lender shall repay to Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day
from the date such amount is distributed to such Lender until the date
such Lender repays such amount to Agent, at the Federal Funds Rate. A
certificate of Agent submitted to any Lender with respect to any
amounts owing by such Lender under this Subparagraph 2.06(e) shall be
conclusive absent manifest error.
2.07. Notes and Interest Account.
(a) Revolving Loan Notes. The obligation of Borrower to repay
the Revolving Loans made by each Lender and to pay interest thereon at
the rates provided herein shall be evidenced by a promissory note in
the form of Exhibit D (individually, a "Revolving Loan Note") which
note shall be (i) payable to the order of such Lender, (ii) in the
amount of such Lender's Revolving Loan Commitment, (iii) dated the
Effective Date and (iv) otherwise appropriately completed. Borrower
authorizes each Lender to record on the schedule annexed to such
Lender's Revolving Loan Note the date and amount of each Revolving Loan
made by such Lender and of each payment or prepayment of principal
thereon made by Borrower, and agrees that all such notations shall
constitute prima facie evidence of the matters noted, provided that a
failure to so record shall not affect Borrower's obligations to repay
each Revolving Loan, interest thereon and all other amounts payable
hereunder, under such Revolving Loan Note or under any other Credit
Document. Borrower further authorizes each Lender to attach to and make
a part of such Lender's Revolving Loan Note continuations of the
schedule attached thereto as necessary.
(b) Interest Account. Borrower authorizes Agent to record in
an account or accounts maintained by Agent on its books (the "Interest
Account") (i) the interest rates applicable to all Revolving Loans and
the effective dates of all changes thereto, (ii) the Interest Period
for each Revolving LIBOR Loan, (iii) the date and amount of each
principal and interest payment on each Revolving Loan and (iv) such
other information
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as Agent may determine is necessary for the computation of interest
payable by Borrower hereunder.
2.08. Loan Funding.
(a) Lender Funding and Disbursement to Borrower. Each Lender
shall, before 11:00 a.m. on the date of each Revolving Loan Borrowing,
make available to Agent at its office specified in Paragraph 8.01, in
same day or immediately available funds, such Lender's Proportionate
Share of such Revolving Loan Borrowing. After Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in
Section III, Agent will promptly disburse such funds in same day or
immediately available funds to Borrower. Unless otherwise directed by
Borrower, Agent shall disburse the proceeds of each Revolving Loan
Borrowing to Borrower by disbursement to the account or accounts
specified in the applicable Notice of Revolving Loan Borrowing.
(b) Lender Failure to Fund. Unless Agent shall have received
notice from a Lender prior to the date of any Revolving Loan Borrowing
that such Lender will not make available to Agent such Lender's
Proportionate Share of such Revolving Loan Borrowing, Agent may assume
that such Lender has made such portion available to Agent on the date
of such Revolving Loan Borrowing in accordance with Subparagraph
2.08(a), and Agent may, in reliance upon such assumption, make
available to Borrower (or otherwise disburse) on such date a
corresponding amount. If any Lender does not make the amount of its
Proportionate Share of any Revolving Loan Borrowing available to Agent
on or prior to the date of such Revolving Loan Borrowing, such Lender
shall pay to Agent, on demand, interest which shall accrue on such
amount until made available to Agent at rates equal to (i) the daily
Federal Funds Rate during the period from the date of such Revolving
Loan Borrowing through the third Business Day thereafter and (ii) the
Prime Rate thereafter. A certificate of Agent submitted to any Lender
with respect to any amounts owing under this Subparagraph 2.08(b) shall
be conclusive absent manifest error. If any Lender's Proportionate
Share of any Revolving Loan Borrowing is not in fact made available to
Agent by such Lender within three (3) Business Days after the date of
such Revolving Loan Borrowing, Borrower shall pay to Agent, on demand,
an amount equal to such Proportionate Share together with interest
thereon, for each day from the date such amount was made available to
Borrower until the date such amount is repaid to Agent, at the interest
rate applicable at the time to the Revolving Loans comprising such
Revolving Loan Borrowing.
(c) Lenders' Obligations Several. The failure of any Lender to
make the Revolving Loan to be made by it as part of any Revolving Loan
Borrowing shall not relieve any other Lender of its obligation
hereunder to make its Revolving Loan on the date of such Revolving Loan
Borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Revolving Loan to be made by such other Lender
on the date of any Revolving Loan Borrowing.
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2.09. Pro Rata Treatment.
(a) Borrowings, Commitment Reductions, Etc. Except as
otherwise provided herein:
(i) Each Revolving Loan Borrowing and each
participation in a Letter of Credit shall be made by the
Lenders pro rata according to their respective Proportionate
Shares at the time of such Revolving Loan Borrowing or with
respect to such participation in Letters of Credit, in
accordance with Subparagraph 2.02(d)(ii) hereof;
(ii) Each reduction of the Total Revolving Loan
Commitment shall be applied to reduce the respective Revolving
Loan Commitments of the Lenders as provided in Subparagraph
2.03(c);
(iii) Each payment of principal of and interest on
Revolving Loans in any Revolving Loan Borrowing shall be made
or shared among the Lenders holding Revolving Loans in such
Revolving Loan Borrowing pro rata according to the respective
unpaid principal amounts of such Revolving Loans held by such
Lenders;
(iv) Each Reimbursement Payment and interest payable
by Borrower thereon shall be shared among the Lenders
(including Issuing Lender) which made or funded the applicable
Drawing Payment pro rata according to the respective amounts
of such Drawing Payment so made or funded by such Lenders;
(v) Each payment of Revolving Loan Commitment Fees
shall be shared among the Lenders pro rata according to their
respective Proportionate Shares provided that in the case of
each Lender which becomes a Lender hereunder after the date
hereof, the Revolving Loan Commitment Fees shall be shared
with such Lender commencing on the date upon which such Lender
so became a Lender; and
(vi) Each payment of LC Usage Fees (other than the LC
Issuance Fee) shall be shared among the Lenders (including
Issuing Lender in its capacity as a Lender) pro rata according
to their respective Proportionate Shares provided that in the
case of each Lender which becomes a Lender hereunder after the
date hereof, the LC Usage Fees shall be shared with such
Lender commencing on the date upon which such Lender so became
a Lender and the LC Issuance Fee shall be payable solely to
the Issuing Lender; and
(vii) All other payments under this Restated Credit
Agreement and the other Credit Documents shall be for the
benefit of the Person or Persons specified.
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(b) Sharing of Payments, Etc.
(i) If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) on account of Revolving Loans or
Reimbursement Obligations owed to it in excess of its ratable
share of payments on account of such Revolving Loans obtained
by all Lenders entitled to such payments, such Lender shall
forthwith purchase an assignment from the other Lenders
entitled to such excess payments in the Revolving Loans as
shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such
purchase shall be rescinded and each other Lender shall repay
to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such other
Lender's ratable share (according to the proportion of (i) the
amount of such other Lender's required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered.
(ii) Borrower agrees that any Lender so purchasing an
assignment from another Lender pursuant to this Subparagraph
2.09(b) may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of setoff) with
respect to such assignment as fully as if such Lender were the
direct creditor of Borrower in the amount of such assignment.
2.10. Change of Circumstances.
(a) Inability to Determine Rates. If, on or before the first
day of any Interest Period for any Revolving LIBOR Loan, (i) any Lender
shall advise Agent that the LIBO Rate for such Interest Period cannot
be adequately and reasonably determined due to the unavailability of
funds in or other circumstances affecting the London interbank market
or (ii) any Lender shall advise Agent that the rates of interest for
such Revolving LIBOR Loans do not adequately and fairly reflect the
cost to such Lender of making or maintaining such Revolving LIBOR
Loans, Agent shall immediately give notice of such condition to
Borrower. After the giving of any such notice and until Agent shall
otherwise notify Borrower that the circumstances giving rise to such
condition no longer exist, Borrower's right to request the making of or
conversion to, and the Lenders' obligations to make or convert to
Revolving LIBOR Loans shall be suspended. Any Revolving LIBOR Loans
outstanding at the commencement of any such suspension shall be
converted at the end of the then current Interest Period for such
Revolving LIBOR Loans into Revolving Prime Rate Loans unless such
suspension has then ended.
(b) Illegality. If, after the date of this Restated Credit
Agreement the adoption of any Governmental Rule, any change in any
Governmental Rule or the application or requirements thereof (whether
such change occurs in accordance with the terms of such Governmental
Rule as enacted, as a result of amendment or otherwise), any change in
the interpretation or administration of any Governmental Rule by any
Governmental Authority, or compliance by any Lender with any request or
directive (whether or not having the force of law)of any Governmental
Authority (a "Change of Law") shall make
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it unlawful or impossible for any Lender to make or maintain any
Revolving LIBOR Loan, such Lender shall immediately notify Agent and
Borrower of such Change of Law. Upon receipt of such notice, (i)
Borrower's right to request the making of or conversion to, and the
Lenders' obligations to make or convert to, Revolving LIBOR Loans shall
be terminated, and (ii) Borrower shall, at the request of any Lender,
either (A) pursuant to Subparagraph 2.01(d) convert any such then
outstanding Revolving LIBOR Loans into Revolving Prime Rate Loans at
the end of the current Interest Period for such Revolving LIBOR Loans,
or (B) immediately repay or convert any such Revolving LIBOR Loans if
any Lender shall notify Borrower that the such Lender may not lawfully
continue to fund and maintain such Revolving LIBOR Loans. Any
conversion or prepayment of Revolving LIBOR Loans made pursuant to the
preceding sentence prior to the last day of an Interest Period for such
Revolving LIBOR Loans shall be deemed a prepayment thereof for purposes
of Paragraph 2.12.
(c) Increased Costs. If, after the date of this Restated
Credit Agreement, any Change of Law:
(i) Shall subject any Lender to any tax, duty or
other charge with respect to any Revolving LIBOR Loan, or
shall change the basis of taxation of payments by Borrower to
any Lender on such a Revolving LIBOR Loan or in respect to
such a Revolving LIBOR Loan under this Restated Credit
Agreement (except for changes in the rate of taxation on the
overall net income of any Lender); or
(ii) Shall impose, modify or hold applicable any
reserve, special deposit or similar requirement against assets
held by, deposits or other liabilities in or for the account
of, advances or loans by, or any other acquisition of funds by
any Lender for any Revolving LIBOR Loan; or
(iii) Shall impose on any Lender any other condition
related to any Revolving LIBOR Loan or its Revolving Loan
Commitment;
And the effect of any of the foregoing is to increase the cost to such
Lender of making, renewing, or maintaining any such Revolving LIBOR
Loan or its Revolving Loan Commitment or to reduce any amount
receivable by such Lender hereunder (and, in the case of a Revolving
LIBOR Loan, such increased cost or reduced amount is not fully
reflected in the LIBO Rate applicable to such Revolving LIBOR Loan);
then Borrower shall from time to time, upon demand by such Lender, pay
to such Lender additional amounts sufficient to reimburse such Lender
for such increased costs or to compensate such Lender for such reduced
amounts. A Lender shall demand such additional amounts by delivering to
Borrower a written certificate which sets forth in reasonable detail
the allocation of the increased costs or reduced amounts to such
Lender's Revolving LIBOR Loans or Revolving Loan Commitment, as the
case may be, and the calculations from which such costs or amounts were
derived, which certificate shall constitute prima facie evidence of
such increased costs or reduced amounts.
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(d) Capital Requirements. If, after the date of this Restated
Credit Agreement, any Lender determines that (i) any Change of Law
affects the amount of capital required or expected to be maintained by
such Lender or any Person controlling such Lender (a "Capital Adequacy
Requirement"), (ii) the amount of capital maintained by such Lender or
such Person which is attributable to or based upon the Revolving Loans,
the Letters of Credit, the Revolving Loan Commitments or this Restated
Credit Agreement must be increased as a result of such Capital Adequacy
Requirement (taking into account such Lender's or such Person's
policies with respect to capital adequacy) and (iii) in the case of
increased capital attributable to or based upon the Revolving Loans,
the increased costs to such Lender or such Person of such increased
capital is not fully reflected in the interest rates applicable to the
Revolving Loans hereunder and such Lender or such Person's capital as a
consequence of its Revolving Loan Commitments or the Revolving Loans
made by such Lender or such Person is reduced to a level below that
which such Lender or such Person, as the case may be, could have
achieved but for the occurrence of any such circumstance; then Borrower
shall pay to such Lender or such Person, upon demand of such Lender,
such amounts as such Lender or such Person shall determine are
necessary to compensate such Lender or such Person for the increased
costs to such Lender or such Person of such increased capital and for
such reduction in rate of return. A Lender shall demand such amounts by
delivering to Borrower a written certificate which sets forth in
reasonable detail the allocation of the increased costs to such
Lender's Revolving Loans, Letters of Credit, Revolving Loan Commitment
or this Restated Credit Agreement, as the case may be, and the
calculations from which such costs were derived, which certificate
shall constitute prima facie evidence of such increased costs.
2.11. Taxes on Payments.
(a) Payments Free of Taxes. All payments made by Borrower
under this Restated Credit Agreement and the other Credit Documents
shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority (except net income taxes and
franchise taxes in lieu of net income taxes imposed on Agent or a
Lender as a result of a present or former connection between the
jurisdiction of the Governmental Authority imposing such tax and Agent
or such Lender, excluding a connection arising solely from Agent or
such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Restated Credit Agreement
or the other Credit Documents) (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Taxes"). If any Taxes are required to be withheld
from any amounts payable to Agent or any Lender hereunder or under the
other Credit Documents, the amounts so payable to Agent or such Lender
shall be increased to the extent necessary to yield to Agent or such
Lender (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this
Restated Credit Agreement and the other Credit Documents. Whenever any
Taxes are payable by Borrower, as promptly as possible thereafter,
Borrower shall send to Agent for its own account or for the account of
such other Agent or such Lender, as the case may be, a certified copy
of an original official receipt received by Borrower showing payment
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thereof. If Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to Agent the required receipts or
other required documentary evidence, Borrower shall indemnify Agent and
the Lenders for any incremental taxes, interest or penalties that may
become payable by Agent or any Lender as a result of any such failure.
The agreements in this Subparagraph 2.11(a) shall survive the
termination of this Restated Credit Agreement.
(b) Withholding Exemption Certificates. On or prior to the
Effective Date (or the Assignment Effective Date in the case of any
Lender which becomes a Lender hereunder after the Effective Date), each
Lender which is not incorporated under the laws of the United States of
America or a state thereof shall deliver to Borrower and Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or
4224 (or successor applicable form), as the case may be, certifying in
each case that such Lender is entitled to receive payments under this
Restated Credit Agreement without deduction or withholding of any
United States federal income taxes. Each Lender which delivers to
Borrower and Agent a Form 1001 or 4224 pursuant to the immediately
preceding sentence further undertakes to deliver to Borrower and Agent
two further copies of the said letter and Form 1001 or 4224 (or
successor applicable forms), or other manner of certification or
procedure, as the case may be, on or before the date that any such
letter or form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent letter and form
previously delivered by it to Borrower and Agent, and such extensions
or renewals thereof as may reasonably be requested by Borrower or
Agent, certifying in the case of a Form 1001 or 4224 that such Lender
is entitled to receive payments under this Restated Credit Agreement
without deduction or withholding of any United States federal income
taxes, unless in any such cases an event (including without limitation
any change in treaty, law or regulation) has occurred prior to the date
on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent a Lender from duly
completing and delivering any such letter or form with respect to it
and such Lender advises Borrower and Agent that it is not capable of
receiving payments without any deduction or withholding of United
States federal income tax. Borrower shall not be required to pay any
additional amounts to Agent or any Lender hereunder to the extent that
the obligation to pay such additional amounts would not have arisen but
for a failure by Agent or such Lender to comply with the provisions of
this Subparagraph 2.11(b) or the last sentence of Subparagraph 8.05(c).
2.12. Funding Loss Indemnification. If Borrower shall (a) repay or
prepay any Revolving LIBOR Loan on any day other than the last day of an
Interest Period therefor (whether an optional prepayment, a mandatory
prepayment, a payment upon acceleration or otherwise), (b) fail to borrow any
Revolving LIBOR Loan for which a Notice of Revolving Loan Borrowing has been
delivered to Agent (whether as a result of the failure to satisfy any applicable
conditions or otherwise) or (c) fail to convert any Revolving Prime Rate Loans
into Revolving LIBOR Loans in accordance with a Notice of Revolving Loan
Conversion delivered to Agent (whether as a result of the failure to satisfy any
applicable conditions or otherwise), Borrower shall, upon demand by any Lender,
reimburse such Lender and hold such Lender harmless for all costs and losses
actually incurred by such Lender as a result of such repayment, prepayment or
failure. Borrower understands that such costs and losses may include, without
limitation, losses incurred by a Lender as a result of funding and other
contracts entered into by
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such Lender to fund or in connection with the funding of a Revolving LIBOR Loan.
A Lender shall demand such reimbursement by delivering to Borrower a written
certificate which sets forth in reasonable detail the allocation of the costs
and losses to such Lender's Revolving Loans and the calculations from which such
costs and losses were derived, which certificate shall constitute prima facie
evidence of such costs and losses.
2.13. Security.
(a) Security Agreements; Guaranties; Etc. on Effective Date On
the Effective Date, the Obligations shall be secured by the following:
(i) A Fourth Amended and Restated Security Agreement
in the form of Exhibit E, duly executed by Borrower (the
"Restated Borrower Security Agreement");
(ii) A Fourth Amended and Restated Pledge Agreement
in the form of Exhibit F, duly executed by Borrower (the
"Restated Borrower Pledge Agreement");
(iii) An Amended and Restated Guaranty in the form of
Exhibit G, duly executed by Xxxx Canada (the "Restated Xxxx
Canada Guaranty").
(iv) An Amended and Restated Pledge Agreement
substantially in the form of Exhibit H, duly executed by Xxxx
Canada (the "Restated Xxxx Canada Pledge Agreement").
(v) An Amended and Restated Guaranty substantially in
the form of Exhibit I, duly executed by Xxxx-Tenex (the
"Restated Xxxx-Tenex Guaranty");
(vi) An Amended and Restated Security Agreement and a
Amended and Restated Canadian Security Agreement substantially
in the forms of Exhibit J, duly executed by Xxxx-Tenex (the
"Restated Xxxx-Tenex Security Agreements");
(vii) An Amended and Restated Guaranty substantially
in the form of Exhibit K, duly executed by Xxxx-Future Tech
(the "Restated Xxxx-Future Tech Guaranty");
(viii) An Amended and Restated Security Agreement
substantially in the form of Exhibit L, duly executed by
Xxxx-Future Tech (the "Restated Xxxx-Future Tech Security
Agreement");
(ix) An Amended and Restated Guaranty substantially
in the form of Exhibit M, duly executed by RDI (the "Restated
RDI Guaranty");
(x) An Amended and Restated Security Agreement
substantially in the form of Exhibit N, duly executed by RDI
(the "Restated RDI Security Agreement"); and
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(xi) An Amended and Restated Pledge Agreement
substantially in the form of Exhibit O, duly executed by RDI
(the "Restated RDI Pledge Agreement"); and
(xii) An Amended and Restated Guaranty substantially
in the form of Exhibit P, duly executed by Xxxxx Europe (the
"Restated Xxxxx Europe Guaranty").
(b) Further Assurances. Borrower shall deliver to Agent, and
shall cause each of Xxxx Canada, Xxxx-Tenex, RDI, Xxxxx Europe and
Xxxx-Future Tech to deliver, such additional security agreements,
pledge agreements, guaranties and other instruments, agreements,
certificates, opinions and documents (including Uniform Commercial Code
financing statements and fixture filings and landlord waivers) as Agent
may request to:
(i) Grant, perfect, maintain, protect and evidence
security interests in favor of Agent, for the benefit of the
Lenders, in any or all present and future personal property of
Borrower and its Subsidiaries prior to the Liens or other
interests of any Person (other than Permitted Liens); or
(ii) Otherwise establish, maintain, protect and
evidence the rights provided to Agent and the Lenders pursuant
to the Security Documents.
Borrower shall fully cooperate with Agent and perform all additional
acts reasonably requested by Agent to effect the purposes of this
Paragraph 2.13.
SECTION III. CONDITIONS PRECEDENT.
3.01. Conditions Precedent to Initial Revolving Loans.
(a) The obligations of the Lenders to make the Revolving Loans
in the initial Revolving Loan Borrowing on or after the Effective Date
are subject to receipt by Agent, on or prior to the Effective Date, of
(a) the Notice of Revolving Loan Borrowing requesting such Revolving
Loan Borrowing delivered in accordance with this Restated Credit
Agreement and (b) each item listed in Schedule 3.01(a), each in form
and substance satisfactory to Agent, and with sufficient copies for,
Agent and each Lender.
(b) The obligations of the Lenders to make the Revolving Loans
are subject to receipt by Agent, on or prior to the date that is 30
days after the Effective Date, of the item listed in Schedule 3.01(b)
in form and substance satisfactory to Agent, and with sufficient copies
for, Agent and each Lender.
3.02. Conditions Precedent to Each Credit Event. The occurrence of each
Credit Event, including the initial Revolving Loan Borrowing on or after the
Effective Date, is subject to the further conditions that on the date such
Credit Event is to occur and after giving effect to such Credit Event, the
following shall be true and correct:
(a) The representations and warranties set forth in Paragraph
4.01 are true and correct in all material respects as if made on such
date;
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(b) No Default or Event of Default has occurred and is
continuing or will result from such Credit Event;
(c) Each of the Credit Documents required to be delivered to
Agent or any Lender on or prior to such date remains in full force and
effect (except as otherwise agreed by Agent in writing); and
(d) In the case of Credit Events consisting of Revolving Loan
Borrowings or the issuance of a Letter of Credit (or any amendment of a
Letter of Credit that increases its stated amount or extends its
maturity date), no material adverse change in the Eligible Accounts or
Eligible Inventory which comprises the Borrowing Base shall have
occurred since the later date of (i) the latest audit conducted by or
on behalf of Agent or any Lender, and (ii) the most recent Borrowing
Base Certificate.
The submission by Borrower to Agent or Issuing Lender, as the case may be, of
each Notice of Revolving Loan Borrowing, each Notice of Revolving Loan
Conversion, each LC Application and each Notice of Revolving Loan Interest
Period Selection shall be deemed to be a representation and warranty by Borrower
as of the date thereon as to the above.
3.03. Covenant to Deliver. Borrower agrees (not as a condition but as a
covenant) to deliver to Agent each item required to be delivered to Agent as a
condition to the occurrence of any Credit Event if such Credit Event occurs.
Borrower expressly agrees that the occurrence of any such Credit Event prior to
the receipt by Agent of any such item shall not constitute a waiver by Agent or
any Lender of Borrower's obligation to deliver such item.
SECTION IV. REPRESENTATIONS AND WARRANTIES.
4.01. Borrower's Representations and Warranties. In order to induce
Agent and the Lenders to enter into this Restated Credit Agreement, Borrower
hereby represents and warrants to Agent and the Lenders as follows:
(a) Due Incorporation, Qualification, etc. Each of Borrower
and its Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation; (ii) has the power and authority to own, lease and
operate its properties and carry on its business as now conducted; and
(iii) is duly qualified, licensed to do business and in good standing
as a foreign corporation in each jurisdiction where the failure to be
so qualified or licensed might have a Material Adverse Effect.
(b) Authority. The execution, delivery and performance by each
of Borrower and its Subsidiaries of each Credit Document executed, or
to be executed, by such Person and the consummation of the transactions
contemplated thereby (i) are within the power of such Person and (ii)
have been duly authorized by all necessary actions on the part of such
Person.
(c) Enforceability. Each Credit Document executed, or to be
executed, by each of Borrower and its Subsidiaries has been, or will
be, duly executed and delivered by such Person and constitutes, or will
constitute, a legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, except as
limited
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by bankruptcy, insolvency or other laws of general application relating
to or affecting the enforcement of creditors' rights generally and
general principles of equity.
(d) Non-Contravention. The execution and delivery by each of
Borrower and its Subsidiaries of the Credit Documents executed, or to
be executed, by such Person and the performance and consummation of the
transactions contemplated thereby do not (i) violate any Requirement of
Law applicable to such Person; (ii) violate any provision of, or result
in the breach or the acceleration of, or entitle any other Person to
accelerate (whether after the giving of notice or lapse of time or
both), any Contractual Obligation of such Person; or (iii) result in
the creation or imposition of any Lien upon any property, asset or
revenue of such Person (except such Liens as may be created in favor of
Agent or any Lender pursuant to this Restated Credit Agreement or the
other Credit Documents).
(e) Approvals. No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental
Authority or other Person (including, without limitation, the
shareholders of any Person) is required in connection with the
execution and delivery of the Credit Documents executed by Borrower or
its Subsidiaries and the performance and consummation of the
transactions contemplated thereby.
(f) No Violation or Default. Neither Borrower nor any of its
Subsidiaries is in violation of or in default with respect to (i) any
Requirement of Law applicable to such Person; (ii) any Contractual
Obligation of such Person (nor is there any waiver in effect which, if
not in effect, would result in such a violation or default), where, in
each case, such violation or default could have a Material Adverse
Effect. Without limiting the generality of the foregoing, neither
Borrower nor any of its Subsidiaries (A) has violated any Environmental
Laws, (B) has any liability under any Environmental Laws or (C) has
received notice or other communication of an investigation or is under
investigation by any Governmental Authority having authority to enforce
Environmental Laws, where such violation, liability or investigation
could have a Material Adverse Effect. No Event of Default or Default
has occurred and is continuing.
(g) Litigation. Except as set forth (with the dollar amounts
claimed) in Schedule 4.01(g), no actions (including, without
limitation, derivative actions), suits, proceedings or investigations
are pending or, to the knowledge of Borrower, threatened against
Borrower or any of its Subsidiaries at law or in equity in any court or
before any other Governmental Authority which (i) could (alone or in
the aggregate) have a Material Adverse Effect or (ii) seeks to enjoin,
either directly or indirectly, the execution, delivery or performance
by Borrower or any of its Subsidiaries of the Credit Documents or the
transactions contemplated thereby.
(h) Title. Borrower and its Subsidiaries own and have good and
marketable title in fee simple absolute to, or a valid leasehold
interest in, all their respective real properties and good title to
their other respective assets and properties as reflected in the most
recent Financial Statements delivered to Lender (except those assets
and properties disposed of in the ordinary course of business or
otherwise in compliance with this Restated Credit Agreement since the
date of such Financial Statements) and all respective assets and
properties acquired by Borrower and its Subsidiaries since such date
(except those
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disposed of in the ordinary course of business or otherwise in
compliance with this Restated Credit Agreement). Such assets and
properties are subject to no Lien, except for Permitted Liens.
(i) Financial Statements. The Financial Statements of Borrower
and its Subsidiaries which have been delivered to Agent and the
Lenders, (i) are in accordance with the books and records of Borrower
and its Subsidiaries, which have been maintained in accordance with
good business practice; (ii) have been prepared in conformity with
GAAP; and (iii) fairly present the respective financial positions of
Borrower and its Subsidiaries at such date. Neither Borrower nor any of
its Subsidiaries has any contingent obligations, liability for taxes or
other outstanding obligations which are material in the aggregate,
except as disclosed in the audited Financial Statements of Borrower
dated December 31, 1999, furnished by Borrower to Agent and the Lenders
prior to the date hereof, or in the Financial Statements delivered to
Agent and the Lenders pursuant to Subparagraph 5.01(a)(ii) or (iii).
(j) Equity Securities. The authorized Equity Securities of
Borrower consist of (i) 40,000,000 shares of common stock of which
approximately 15,563,474 shares are duly issued and outstanding, (ii)
10,000,000 shares of preferred stock none of which shares are duly
issued and outstanding, (iii) no warrants to purchase shares of common
stock are issued and outstanding, (iv) and options to purchase
3,685,742 shares of common stock, are outstanding. All outstanding
Equity Securities (except for the option to purchase common stock) of
Borrower are duly authorized, validly issued, fully paid and
non-assessable. There are no other outstanding subscriptions, options,
conversion rights, warrants or other agreements or commitments of any
nature whatsoever (firm or conditional) obligating Borrower to issue,
deliver or sell, or cause to be issued, delivered or sold, any
additional Equity Securities of Borrower, or obligating Borrower to
grant, extend or enter into any such agreement or commitment. All
Equity Securities of Borrower have been offered and sold in compliance
with all federal and state securities laws and all other Requirements
of Law.
(k) No Agreements to Sell Assets. Neither Borrower nor any of
its Subsidiaries has any legal obligation, absolute or contingent, to
any Person to sell all or a substantial portion of the assets of
Borrower or its Subsidiaries (other than sales in the ordinary course
of business), or to effect any merger, consolidation or other
reorganization of Borrower or any of its Subsidiaries or to enter into
any agreement with respect thereto.
(l) Employee Benefit Plans.
(i) Based upon the latest valuation of each "employee
pension benefit plan" (within the meaning of section 3(2) of
ERISA) that either Borrower or any ERISA Affiliate maintains
or contributes to, or has any obligation under (which
valuation occurred within twelve months of the date of this
representation), the aggregate benefit liabilities of such
plan within the meaning of Section 4001 of ERISA did not
exceed the aggregate value of the assets of such plan. Neither
Borrower nor any ERISA Affiliate has any liability with
respect to any post-retirement benefit under any Employee
Benefit Plan which is a welfare plan (as
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defined in section 3(1) of ERISA), other than liability for
health plan continuation coverage described in Part 6 of Title
I(B) of ERISA, which liability for health plan contribution
coverage will not have a Material Adverse Effect.
(ii) Each Employee Benefit Plan complies, in both
form and operation, in all material respects, with its terms,
ERISA and the Code, and no condition exists or event has
occurred with respect to any such plan which would result in
the incurrence by either Borrower or any ERISA Affiliate of
any material liability, fine or penalty. Each Employee Benefit
Plan, related trust agreement, arrangement and commitment of
Borrower or any ERISA Affiliate is legally valid and binding
and in full force and effect. No Employee Benefit Plan is
being audited or investigated by any government agency or is
subject to any pending or threatened claim or suit. Neither
Borrower nor any ERISA Affiliate nor any fiduciary of any
Employee Benefit Plan has engaged in a prohibited transaction
under section 406 of ERISA or section 4975 of the Code.
(iii) Neither Borrower nor any ERISA Affiliate
contributes to any Multiemployer Plan. Neither Borrower nor
any ERISA Affiliate has incurred any material liability
(including secondary liability) to any Multiemployer Plan as a
result of a complete or partial withdrawal from such
Multiemployer Plan under Section 4201 of ERISA or as a result
of a sale of assets described in Section 4204 of ERISA.
Neither Borrower nor any ERISA Affiliate has been notified
that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of Section 4241 or Section 4245
of ERISA or that any Multiemployer Plan intends to terminate
or has been terminated under Section 4041A of ERISA.
(m) Other Regulations. Neither Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act
of 1940, the Public Utility Holding Company Act of 1935, the Federal
Power Act, any state public utilities code or to any federal or state
statute or regulatory scheme which would limit its ability execute,
deliver and perform any of the Credit Documents executed or to be
executed by it.
(n) Patent and Other Rights. Borrower and its Subsidiaries
own, and have the full right to license without the consent of any
other Person, all patents, licenses, trademarks, trade names, trade
secrets, service marks, copyrights and all rights with respect thereto,
which are required to conduct their businesses as now conducted.
(o) Governmental Charges and Other Indebtedness. Borrower and
its Subsidiaries have filed or caused to be filed all tax returns which
are required to be filed by them. Borrower and its Subsidiaries have
paid, or made provision for the payment of, all taxes and other
Governmental Charges which have or may have become due pursuant to said
returns or otherwise and all other Indebtedness, except such
Governmental Charges or Indebtedness, if any, which are being contested
in good faith and as to which adequate reserves (determined in
accordance with GAAP) have been provided or which could not have a
Material Adverse Effect if unpaid.
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(p) Margin Stock. Borrower owns no Margin Stock which, in the
aggregate, would constitute a substantial part of the assets of
Borrower, and no proceeds of any Revolving Loan will be used to
purchase or carry, directly or indirectly, and no Letter of Credit
shall be used to support the purchase of, any Margin Stock or to extend
credit, directly or indirectly, to any Person for the purpose of
purchasing or carrying any Margin Stock.
(q) Subsidiaries, etc. Set forth in Schedule 4.01(q) is a
complete list of all of Borrower's Subsidiaries, the jurisdiction of
incorporation of each, the classes of Equity Securities of each and the
number of shares and percentages of shares of each such class owned
directly or indirectly by Borrower. Except for such Subsidiaries,
Borrower has no Subsidiaries, is not a partner in any partnership or a
joint venturer in any joint venture.
(r) Solvency, Etc. Borrower and each of its Subsidiaries is
Solvent and, after the execution and delivery of the Credit Documents
and the consummation of the transactions contemplated thereby, will be
Solvent.
(s) Catastrophic Events. Neither Borrower nor any of its
Subsidiaries and none of their properties is or has been affected by
any fire, explosion, accident, strike, lockout or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or other casualty
that could have a Material Adverse Effect. There are no disputes
presently subject to grievance procedure, arbitration or litigation
under any of the collective bargaining agreements, employment contracts
or employee welfare or incentive plans to which Borrower or any of its
Subsidiaries is a party, and there are no strikes, lockouts, work
stoppages or slowdowns, or, to the best knowledge of Borrower,
jurisdictional disputes or organizing activity occurring or threatened
which could have a Material Adverse Effect.
(t) Burdensome Contractual Obligations, Etc. Neither Borrower
nor any of its Subsidiaries and none of their properties is subject to
any Contractual Obligation or Requirement of Law which could have a
Material Adverse Effect.
(u) No Material Adverse Effect. No event has occurred and no
condition exists which could reasonably be expected to have a Material
Adverse Effect.
(v) Accuracy of Information Furnished. None of the Credit
Documents and none of the other certificates, statements or information
furnished to Agent or any Lender by or on behalf of Borrower or any of
its Subsidiaries in connection with the Credit Documents or the
transactions contemplated thereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.02. Reaffirmation. Borrower shall be deemed to have reaffirmed, for
the benefit of the Lenders and Agent, each representation and warranty contained
in Paragraph 4.01 on and as of the date of each Credit Event.
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SECTION V. COVENANTS.
5.01. Affirmative Covenants. Until the termination of this Restated
Credit Agreement and the satisfaction in full by Borrower of all Obligations,
Borrower will comply, and will cause compliance, with the following affirmative
covenants, unless Required Lenders shall otherwise consent in writing:
(a) Financial Statements, Reports, etc. Borrower shall furnish
to Agent (with a copy for each Lender to be forwarded by Agent) the
following, each in such form and such detail as Agent shall reasonably
request:
(i) Within fifty (50) days after the last day of each
fiscal quarter of Borrower, (A) a copy of the Financial
Statements of Borrower for such quarter and for the fiscal
year to date (including consolidated Financial Statements for
Borrower and its Subsidiaries), certified by the president or
chief financial officer of Borrower to present fairly the
financial condition, results of operations and other
information reflected therein and to have been prepared in
accordance with GAAP (subject to year-end audit adjustments)
and (B) the Form 10-Q Report filed by Borrower with the
Securities and Exchange Commission for such quarter;
(ii) Within ninety-five (95) days after the close of
each fiscal year of Borrower, (A) copies of the audited
Financial Statements of Borrower for such year (including
consolidated Financial Statements for Borrower and its
Subsidiaries), prepared by independent certified public
accountants acceptable to Lender, (B) copies of the
unqualified opinions (or qualified opinions reasonably
acceptable to the Lenders) and management letters delivered by
such accountants in connection with all such Financial
Statements, (C) certificates of all such accountants to Lender
stating that in making the examination necessary for their
opinion they have obtained no knowledge of any Event of
Default or Default which has occurred and is continuing, or
if, in the opinion of such accountants, an Event of Default or
Default has occurred and is continuing, a statement as to the
nature thereof (or other certificates of such accountants
reasonably acceptable to Required Lenders) and (D) the Form
10-K Report filed by Borrower with the Securities and Exchange
Commission for such year;
(iii) Contemporaneously with the quarterly and
year-end financial statements required by the foregoing
clauses (i) and (ii), a certificate of the president or chief
financial officer of Borrower in such detail as Agent may
reasonably request which sets forth the calculations conducted
to verify that Borrower is in compliance with each of the
financial covenants set forth in Paragraph 5.02(m) and stating
that no Event of Default and no Default has occurred and is
continuing, or, if any such Event of Default or Default has
occurred and is continuing, a statement as to the nature
thereof and what action Borrower proposes to take with respect
thereto;
(iv) As soon as available and in no event later than
twenty (20) days after the last day of each fiscal month, to
Agent (A) agings of Borrower's and its
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Subsidiaries' accounts receivable and accounts payable as of
the last day of each month, (B) a report of Borrower's and its
Subsidiaries' inventory as of the last day of such month, and
(C) a certificate in the form of Exhibit K (or other form
acceptable to Agent), appropriately completed (a "Borrowing
Base Certificate"), which sets forth the calculation of the
Borrowing Base as of such last day of such month, certified by
the chief financial officer or treasurer of Borrower;
(v) As soon as possible and in no event later than
five (5) Business Days after any officer of Borrower knows of
the occurrence or existence of (A) any Reportable Event under
any Employee Benefit Plan or Multiemployer Plan; (B) any
actual or threatened litigation, suits, claims or disputes
against Borrower or any of its Subsidiaries involving
potential monetary damages payable by Borrower or any of its
Subsidiaries of $1,000,000 or more (alone or in the
aggregate); (C) any other event or condition which could
reasonably be expected to have a Material Adverse Effect; or
(D) any Event of Default or Default; the statement of the
president or chief financial officer of Borrower setting forth
details of such event, condition, Event of Default or Default
and the action which Borrower proposes to take with respect
thereto;
(vi) As soon as possible and in no event later than
five (5) Business Days after they are sent, made available or
filed, copies of all registration statements and reports filed
by Borrower with the Securities and Exchange Commission
(including 8-K reports) and all reports, proxy statements and
financial statements sent or made available by Borrower to its
shareholders generally;
(vii) As soon as possible and in no event later than
five (5) Business Days after they are filed, copies of all IRS
Form 5500 reports for all Employee Benefit Plans required to
file such form; and
(viii) Such other instruments, agreements,
certificates, opinions, statements, documents and information
relating to the operations or condition (financial or
otherwise) of Borrower or any of its Subsidiaries, and
compliance by Borrower and its Subsidiaries with the terms of
this Restated Credit Agreement and the other Credit Documents
as Agent may from time to time reasonably request.
(b) Books and Records. Borrower and its Subsidiaries shall at
all times keep proper books of record and account in which full, true
and correct entries will be made of their transactions in accordance
with GAAP.
(c) Inspections. Borrower and its Subsidiaries shall permit
any Person designated by Agent in its sole discretion (including
without limitation any Lender that so requests, which request shall not
be unreasonably denied), upon reasonable notice and during normal
business hours, to visit and inspect any of the properties and offices
of Borrower and its Subsidiaries, to conduct audits of any or all of
the Collateral at Borrower's expense, to examine the books of account
of Borrower and its Subsidiaries and to discuss
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the affairs, finances and accounts of Borrower and its Subsidiaries
with, and to be advised as to the same by, their officers, auditors and
accountants, all at such times and intervals as Agent may reasonably
request, including, without limitation, an annual audit of the accounts
and inventory of Borrower and its Subsidiaries, the fees and expenses
of which shall be payable by Borrower pursuant to Subparagraph 8.02(b).
Audit fees payable by Borrower in connection with audits of all or any
portion of the Collateral shall be charged at a rate of $750 per day
per person plus direct costs of travel, lodging and out-of-pocket
expenses.
(d) Insurance. Each of Borrower and its Subsidiaries shall (i)
insure its inventory against such risks, in such amounts and with such
insurers satisfactory to the Lenders; (ii) carry and maintain
additional insurance of the types and in the amounts customarily
carried from time to time during the term of this Restated Credit
Agreement by others engaged in substantially the same business as such
Person and operating in the same geographic area as such Person,
including fire, public liability, property damage and worker's
compensation, such insurance to be carried with companies and in
amounts satisfactory to the Lenders; (iii) name Agent as additional
insured or loss payee, as appropriate, on all such insurance; and (iv)
deliver to Agent from time to time, as Agent may request, schedules
setting forth all insurance then in effect and policy endorsements for
such insurance naming Agent as additional insured or loss payee.
(e) Governmental Charges and Other Indebtedness. Borrower and
its Subsidiaries shall promptly pay and discharge before delinquent (i)
all taxes and other Governmental Charges prior to the date upon which
penalties accrue thereon, except such Governmental Charges as may in
good faith be contested or disputed by appropriate proceedings,
provided that in each such case appropriate reserves are maintained in
accordance with GAAP, (ii) all Indebtedness which, if unpaid, could
become a Lien upon the property of Borrower or its Subsidiaries and
(iii) all other Indebtedness which, if unpaid, could have a Material
Adverse Effect, except such Indebtedness as may in good faith be
contested or disputed by appropriate proceedings, or for which
arrangements for deferred payment have been made, provided that in each
such case appropriate reserves are maintained in accordance with GAAP.
(f) Use of Proceeds. Borrower shall use the proceeds of the
Revolving Loans only for the purposes set forth in Subparagraph 2.01(g)
and Borrower shall request the issuance of Letters of Credit only for
the purposes set forth in Subparagraph 2.02(a)(ii). Borrower shall not
use any part of the proceeds of any Revolving Loan or any Letter of
Credit, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock or for the purpose of purchasing or carrying
or trading in any securities under such circumstances as to involve
Borrower or Lender in a violation of Regulations T, U or X issued by
the Federal Reserve Board.
(g) General Business Operations. Each of Borrower and its
Subsidiaries shall (i) preserve and maintain its corporate existence
and all of its rights, privileges and franchises reasonably necessary
to the conduct of its business, (ii) conduct its business activities in
compliance with all Requirements of Law and Contractual Obligations
applicable to such Person, the violation of which could have a Material
Adverse Effect,
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(iii) keep all property useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted, and (iv)
not change its chief executive office and principal place of business
from San Jose, California without ninety (90) days prior written notice
to Agent.
(h) Landlord Waivers and Consents. Borrower shall use its best
efforts to obtain such landlord waivers and consents, in form and
substance satisfactory to Agent, as Agent may from time to time request
pursuant to which each such landlord shall acknowledge Agent's and the
Lenders' senior security interest in all of Borrower's and its
Subsidiaries' inventory stored at such locations, disclaim any interest
in such inventory and agree to provide Agent on behalf of the Lenders
access to remove such inventory.
5.02. Negative Covenants. Until the termination of this Restated Credit
Agreement and the satisfaction in full by Borrower of all Obligations, Borrower
will comply, and will cause compliance, with the following negative covenants,
unless Required Lenders or Lenders, as the case may be, shall otherwise consent
in writing:
(a) Indebtedness. Neither Borrower nor any of its Subsidiaries
shall create, incur, assume or permit to exist any Indebtedness except
for Permitted Indebtedness. Neither Borrower nor any of its
Subsidiaries (other than Ideal Hardware Limited) shall guaranty or
become obligated with respect to Indebtedness specified under clause
(j) of the definition of Permitted Indebtedness.
(b) Liens. Neither Borrower nor any of its Subsidiaries shall
create, incur, assume or permit to exist any Lien on or with respect to
any of its assets or property of any character, whether now owned or
hereafter acquired, except for Permitted Liens.
(c) Asset Dispositions. Neither Borrower nor any of its
Subsidiaries shall sell, lease, transfer or otherwise dispose of any of
its assets or property, whether now owned or hereafter acquired, except
in the ordinary course of its business. Notwithstanding the foregoing,
Xxxx-Future Tech may sell accounts receivable to TCFC pursuant to the
Accounts Receivable Purchase Agreement.
(d) Mergers, Acquisitions, Etc. Neither Borrower nor any of
its Subsidiaries shall consolidate with or merge into any other Person
or permit any other Person to merge into it, or acquire all or
substantially all of the assets of any other Person, except that any
wholly-owned Subsidiary of Borrower may merge into Borrower or any
other wholly-owned Subsidiary of Borrower.
(e) Investments. Neither Borrower nor any of its Subsidiaries
shall make any Investment except for Permitted Investments.
(f) Dividends, Redemptions, Etc. Borrower shall not (i) pay
any dividends or make any distributions on its Equity Securities; (ii)
purchase, redeem, retire, defease or otherwise acquire for value any of
its Equity Securities repurchased at cost by the Corporation in
connection with the termination of employment or service; (iii) return
any capital to any holder of its Equity Securities as such; (iv) make
any distribution of assets,
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Equity Securities, obligations or securities to any holder of its
Equity Securities as such; or (v) set apart any sum for any such
purpose; except that Borrower may pay Permitted Dividends.
(g) Capital Expenditures. Borrower and its Subsidiaries shall
not pay or incur Capital Expenditures which exceed in aggregate in any
fiscal year $5,000,000.
(h) Change in Business. Neither Borrower nor any of its
Subsidiaries shall engage, either directly or indirectly through
Affiliates, in any business substantially different from and not
incidental to its present business.
(i) Indebtedness Payments. Neither Borrower nor any of its
Subsidiaries shall (i) make any payment on the Subordinated
Indebtedness other than scheduled payments of principal and interest on
the RSA Subordinated Indebtedness; (ii) prepay, redeem, purchase,
defease or otherwise satisfy in any manner prior to the scheduled
repayment thereof any other Indebtedness for borrowed money (other than
the Obligations) or lease obligations; (iii) amend, modify or otherwise
change the subordination provisions of any Subordinated Indebtedness;
or (iv) amend, modify or otherwise change the terms of any Subordinated
Indebtedness or any other Indebtedness for borrowed money (other than
the Obligations) or lease obligations so as to accelerate the scheduled
repayment thereof.
(j) ERISA. Neither Borrower nor any ERISA Affiliate shall (i)
adopt or institute any Employee Benefit Plan that is an employee
pension benefit plan within the meaning of Section 3(2) of ERISA, (ii)
take any action which will result in the partial or complete
withdrawal, within the meanings of sections 4203 and 4205 of ERISA,
from a Multiemployer Plan, (iii) engage or permit any Person to engage
in any transaction prohibited by section 406 of ERISA or section 4975
of the Code involving any Employee Benefit Plan or Multiemployer Plan
which would subject either Borrower or any ERISA Affiliate to any tax,
penalty or other liability including a liability to indemnify, (iv)
incur or allow to exist any accumulated funding deficiency (within the
meaning of section 412 of the Code or section 302 of ERISA), (v) fail
to make full payment when due of all amounts due as contributions to
any Employee Benefit Plan or Multiemployer Plan, (vi) fail to comply
with the requirements of section 4980B of the Code or Part 6 of Title
I(B) of ERISA, or (vii) adopt any amendment to any Employee Benefit
Plan which would require the posting of security pursuant to section
401(a)(29) of the Code, where singly or cumulatively, the above would
have a Material Adverse Effect.
(k) Transactions With Affiliates. Neither Borrower nor any of
its Subsidiaries shall enter into any Contractual Obligation with any
Affiliate or engage in any other transaction with any Affiliate except
that Borrower and its Subsidiaries may (i) sell assets to each other
for fair value and (ii) engage in other transactions with each other or
with Affiliates upon terms at least as favorable to Borrower and its
Subsidiaries as arms-length transactions with unaffiliated Persons.
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(l) Accounting Changes. Neither Borrower nor any of its
Subsidiaries shall change (i) its fiscal year (currently January 1
through December 31) or (ii) its accounting practices except as
required by GAAP.
(m) Financial Covenants. Borrower shall not permit:
(i) Its Quick Ratio to be less than 0.50 to 1.00 for
any fiscal quarter;
(ii) Its Working Capital to be less than $150,000,000
for any fiscal quarter;
(iii) The sum of its Tangible Net Worth and the
amount owed under the RSA Subordinated Indebtedness, for any
fiscal quarter, to be less than the sum of (1) $225,000,000
plus (2) fifty percent (50%) of the sum of Borrower's Net
Income After Tax for each quarter (excluding any quarter in
which such amount was negative) beginning with the quarter
ending September 30, 2000 plus (3) one hundred percent (100%)
of the Net Proceeds derived from any issuance by Borrower of
Equity Securities;
(iv) Its Leverage Ratio to be greater than 2.00 to
1.00 for any fiscal quarter;
(v) Its Interest Coverage Ratio for any consecutive
four-quarter period to be less than 1:75 to 1:00; or
(vi) Its Net Operating Income or Net Income After Tax
to be a loss of any amount for any consecutive two-quarter
period.
(n) RSA Subordinated Indebtedness. Borrower shall not permit
the amendment, modification or change in any manner the terms of the
RSA Subordinated Indebtedness unless Agent and Required Lenders
determine, in their sole discretion, that any such amendment,
modification or change shall not adversely affect Agent and Lenders.
SECTION VI. DEFAULT.
6.01. Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:
(a) Borrower shall fail to pay when due any principal,
interest or other payment required under the terms of this Restated
Credit Agreement or any of the other Credit Documents; or
(b) Borrower or any of its Subsidiaries shall fail to observe
or perform any covenant, obligation, condition or agreement set forth
in clause (v)(D) of Subparagraph 5.01(a), Subparagraph 5.01(c) (but
only to the extent Borrower denies such right to conduct inspections to
Agent acting on behalf of the Lenders), Subparagraph 5.01(d) or
Paragraph 5.02; or
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(c) Borrower or any of its Subsidiaries shall fail to observe
or perform any other covenant, obligation, condition or agreement
contained in this Restated Credit Agreement or the other Credit
Documents and such failure shall continue for ten (10) days; or
(d) Any representation, warranty, certificate, or other
statement (financial or otherwise) made or furnished by or on behalf of
Borrower or any of its Subsidiaries to Agent or any Lender in or in
connection with this Restated Credit Agreement or any of the other
Credit Documents, or as an inducement to Agent or any Lender to enter
into this Restated Credit Agreement, shall be false, incorrect,
incomplete or misleading in any material respect when made or
furnished; or
(e) Borrower or any of its Subsidiaries shall fail to make any
payment when due under the terms of any bond, debenture, note or other
evidence of Indebtedness to be paid by such Person (excluding this
Restated Credit Agreement and the other Credit Documents but including
any other evidence of Indebtedness of Borrower or any of its
Subsidiaries to any Lender) and such failure shall continue beyond any
period of grace provided with respect thereto, or shall default in the
observance or performance of any other agreement, term or condition
contained in any such bond, debenture, note or other evidence of
Indebtedness, and the effect of such failure or default is to cause, or
permit the holder or holders thereof to cause Indebtedness in an
aggregate amount of $200,000 or more to become due prior to its stated
date of maturity; or
(f) Borrower or any of its Subsidiaries shall (i) apply for or
consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property,
(ii) be unable, or admit in writing its inability, to pay its debts
generally as they mature, (iii) make a general assignment for the
benefit of its or any of its creditors, (iv) be dissolved or liquidated
in full or in part, (v) become insolvent (as such term may be defined
or interpreted under any applicable statute), (vi) commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or consent
to any such relief or to the appointment of or taking possession of its
property by any official in an involuntary case or other proceeding
commenced against it, or (vi) take any action for the purpose of
affecting any of the foregoing; or
(g) Proceedings for the appointment of a receiver, trustee,
liquidator or custodian of Borrower or any of its Subsidiaries or of
all or a substantial part of the property thereof, or an involuntary
case or other proceedings seeking liquidation, reorganization or other
relief with respect to Borrower or any of its Subsidiaries or the debts
thereof under any bankruptcy, insolvency or other similar law now or
hereafter in effect shall be commenced and an order for relief entered
or such proceeding shall not be dismissed or discharged within sixty
(60) days of commencement; or
(h) A final judgment or order for the payment of money in
excess of $200,000 (exclusive of amounts covered by insurance issued by
an insurer not an Affiliate of Borrower) shall be rendered against
Borrower or any of its Subsidiaries and the same shall remain
undischarged and unpaid for a period of thirty (30) days during which
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execution shall not be effectively stayed, or any judgment, writ,
assessment, warrant of attachment, or execution or similar process
shall be issued or levied against a substantial part of the property of
Borrower or any of its Subsidiaries and such judgment, writ, or similar
process shall not be released, stayed, vacated or otherwise dismissed
within thirty (30) days after issue or levy; or
(i) Any Credit Document or any material term thereof shall
cease to be, or be asserted by Borrower or any of its Subsidiaries not
to be, a legal, valid and binding obligation of Borrower or its
Subsidiaries enforceable in accordance with its terms; or
(j) Any Reportable Event occurs which constitutes grounds for
the termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee to administer any Employee Benefit Plan, or
any Employee Benefit Plan shall be terminated within the meaning of
Title IV of ERISA or a trustee shall be appointed to administer any
Employee Benefit Plan; or
(k) One or more conditions exist or events have occurred which
might reasonably indicate, or reasonably result in, a Material Adverse
Effect.
6.02. Remedies. Upon the occurrence or existence of any Event of
Default (other than an Event of Default referred to in Subparagraph 6.01(f) or
6.01(g)) and at any time thereafter during the continuance of such Event of
Default, Agent may, with the consent of the Required Lenders, or shall, upon
instructions from the Required Lenders, by written notice to Borrower, (a)
terminate the Revolving Loan Commitments, the LC Commitment and the obligations
of the Lenders and the Issuing Lender to make Revolving Loans or issue Letters
of Credit, as the case may be, (b) declare all outstanding Obligations payable
by Borrower hereunder to be immediately due and payable without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the Notes to the contrary
notwithstanding, and/or (c) direct Borrower to deliver to Agent funds in an
amount equal to the aggregate stated amount of all outstanding Letters of
Credit. Upon the occurrence or existence of any Event of Default described in
Subparagraph 6.01(f) or 6.01(g), immediately and without notice, (1) the
Revolving Loan Commitments, the LC Commitment and the obligations of the Lenders
and Issuing Lender to make Revolving Loans or issue Letters of Credit, as the
case may be, shall automatically terminate and (2) all outstanding Obligations
payable by Borrower hereunder shall automatically become immediately due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived, anything contained herein or in the
Notes to the contrary notwithstanding. In addition to the foregoing remedies,
upon the occurrence or existence of any Event of Default, Agent may exercise any
right, power or remedy permitted to it by law, either by suit in equity or by
action at law, or both. Immediately after taking any action under this Paragraph
6.02, Agent shall notify each Lender of such action.
SECTION VII. AGENT AND RELATIONS AMONG LENDERS.
7.01. Appointment, Powers and Immunities. Each Lender hereby appoints
and authorizes Agent to act as its agent hereunder and under the other Credit
Documents with such powers as are expressly delegated to Agent by the terms of
this Restated Credit Agreement and
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the other Credit Documents, together with such other powers as are reasonably
incidental thereto. Agent shall not have any duties or responsibilities except
those expressly set forth in this Restated Credit Agreement or in any other
Credit Document, be a trustee for any Lender or have any fiduciary duty to any
Lender. Notwithstanding anything to the contrary contained herein, Agent shall
not be required to take any action which is contrary to this Restated Credit
Agreement or any other Credit Document or applicable law. Neither Agent nor any
Lender shall be responsible to any other Lender for any recitals, statements,
representations or warranties made by Borrower or any Subsidiary contained in
this Restated Credit Agreement or in any other Credit Document, for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Restated Credit Agreement, or any other Credit Document or for any failure by
Borrower or any Subsidiary to perform their respective obligations hereunder or
thereunder. Agent may employ agents and attorneys-in-fact and shall not be
responsible to any other Agent or Lender for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. Neither
Agent nor any of their respective directors, officers, employees or agents shall
be responsible to any Lender for any action taken or omitted to be taken by it
or them hereunder or under any other Credit Document or in connection herewith
or therewith, except for its or their own gross negligence or willful
misconduct. Except as otherwise provided under this Restated Credit Agreement,
Agent shall take such action with respect to the Credit Documents as shall be
directed by the Required Lenders.
7.02. Reliance by Agents. Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile
or telex) reasonably believed by it in good faith 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 Agent with reasonable care. As to any other matters not
expressly provided for by this Restated Credit Agreement, Agent shall not be
required to take any action or exercise any discretion, but shall be required to
act or to refrain from acting upon instructions of the Required Lenders and
shall in all cases be fully protected by the Lenders in acting, or in refraining
from acting, hereunder or under any other Credit Document in accordance with the
instructions of the Required Lenders, and such instructions of the Required
Lenders and any action taken or failure to act pursuant thereto shall be binding
on all of the Lenders.
7.03. Defaults. Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default unless Agent has received a
notice from any Lender or Borrower, referring to this Restated Credit Agreement,
describing such Default or Event of Default and stating that such notice is a
"Notice of Default". If Agent receives such a notice of the occurrence of a
Default or Event of Default, Agent shall give prompt notice thereof to the
Lenders. Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders or all of the
Lenders if unanimity is required; provided, however, that until Agent shall have
received such directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as they shall deem advisable in the best interest of the
Lenders.
7.04. Indemnification. Without limiting the Obligations of Borrower
hereunder, each Lender agrees to indemnify Agent, ratably in accordance with
their Proportionate Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed
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on, incurred by or asserted against Agent in any way relating to or arising out
of this Restated Credit Agreement or any documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or thereby or the
enforcement of any of the terms hereof or thereof or of any such other
documents; provided, however, that no Lender shall be liable for any of the
foregoing to the extent they arise from Agent's gross negligence or willful
misconduct. Agent shall be fully justified in refusing to take or to continue to
take any action hereunder unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
7.05. Non-Reliance. Each Lender represents that it has, independently
and without reliance on Agent, or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of Borrower and the Subsidiaries and decision to
enter into this Restated Credit Agreement and agrees that it will, independently
and without reliance upon 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 appraisals and decisions in taking or not taking action under this Restated
Credit Agreement. Neither Agent nor any Lender shall be required to keep
informed as to the performance or observance by Borrower or any Subsidiary of
the obligations under this Restated Credit Agreement or any other document
referred to or provided for herein or to make inquiry of, or to inspect the
properties or books of Borrower or any Subsidiary. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by Agent hereunder, neither Agent nor any Lender shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning Borrower or any Subsidiary, which may come into the possession of
Agent or such Lender or any of its or their Affiliates. Agent shall provide each
Lender with copies of any Credit Documents and any other documents, instruments
and agreements delivered to Agent in connection therewith requested by such
Lender.
7.06. Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, Agent may resign at any time
by giving notice thereof to the Lenders, and Agent may be removed at any time
with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent,
which Agent shall be reasonably acceptable to Borrower. If no successor Agent
shall have been appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a bank having a combined capital, surplus and retained earnings of not
less than U.S. $250,000,000 and which shall be reasonably acceptable to
Borrower. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section VII 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
Agent.
7.07. Agent in its Individual Capacity. Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with Borrower and its
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Subsidiaries and affiliates as though Agent were not Agent hereunder. With
respect to Revolving Loans made and Letters of Credit issued, if any, by CB&T as
a Lender, CB&T shall have the same rights and powers under this Restated Credit
Agreement and the other Credit Documents as any other Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" or "Lenders"
shall include CB&T in its individual capacity.
SECTION VIII. MISCELLANEOUS.
8.01. Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Borrower, any Lender or Agent under this Restated Credit Agreement or the other
Credit Documents shall be in writing and faxed, mailed or delivered, if to
Borrower or Agent, at its respective facsimile number or address set forth
below, if to any Lender, at the address or facsimile number specified beneath
the heading "Address for Notices" under the name of such Lender in Schedule I,
or if to Issuing Lender, at the address or facsimile number indicated in a
notice given by Issuing Lender to the other parties from time to time (or to
such other facsimile number or address for any party as indicated in any notice
given by that party to the other party). All such notices and communications
shall be effective (a) when sent by Federal Express or other overnight service
of recognized standing, on the Business Day following the deposit with such
service; (b) when mailed, first class postage prepaid and addressed as aforesaid
through the United States Postal Service, upon receipt; (c) when delivered by
hand, upon delivery; and (d) when sent by facsimile, upon confirmation of
receipt; provided, however, that any notice delivered to Agent or Issuing Lender
under Section II shall not be effective until received by such Person.
Agent: California Bank & Trust
000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Relationship Manager
Xxxx Microproducts
Telephone: (000) 000-0000
Facsimile (000) 000-0000
Borrower: Xxxx Microproducts Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxxx
Vice President, Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Each Notice of Revolving Loan Borrowing, Notice of Revolving Loan Conversion,
Notice of Revolving Loan Interest Period Selection or LC Application (or copy
thereof, as the case may be) shall be given by Borrower to Agent, and in the
case of an LC Application, to Issuing Lender, to the office of such Person
located at the address referred to above during Agent's normal business hours;
provided, however, that any such notice received by Agent after 12:00 noon on
any Business Day shall be deemed received by Agent on the next Business Day. In
any case where this Restated Credit Agreement authorizes notices, requests,
demands or other
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communications by Borrower to Agent or any Lender to be made by telephone or
facsimile, Agent or Lender may conclusively presume that anyone purporting to be
a person designated in any incumbency certificate or other similar document
received by Agent or Lender is such a person.
8.02. Expenses. Borrower shall pay within thirty (30) days of a written
demand therefor, whether or not any Revolving Loan is made or any Letter of
Credit is issued hereunder, (a) all reasonable fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Agent in connection with
the preparation, execution and delivery of, and the exercise of its duties
under, this Restated Credit Agreement and the other Credit Documents, and the
preparation, execution and delivery of amendments and waivers hereunder and
thereunder, (b) all reasonable fees and expenses, including reasonable
attorneys' fees and expenses, incurred by Agent in connection with the exercise
of its duties (including permitted audits and inspections) under this Restated
Credit Agreement and the other Credit Documents, and (c) all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by Agent
and the Lenders in the enforcement or attempted enforcement of any of the
Obligations or in preserving any of Agent's or the Lenders' rights and remedies
(including, without limitation, all such fees and expenses incurred in
connection with any "workout" or restructuring affecting the Credit Documents or
the Obligations or any bankruptcy or similar proceeding involving Borrower or
any of its Subsidiaries). As used herein, the term "reasonable attorneys' fees
and expenses" shall include, without limitation, allocable costs and expenses of
Agent's and each Lender's in-house legal counsel and staff.
8.03. Indemnification. To the fullest extent permitted by law, Borrower
agrees to protect, indemnify, defend and hold harmless Agents and the Lenders
and their respective directors, officers, employees, agents and any affiliate
thereof ("Indemnitees") from and against any liabilities, losses, damages or
expenses of any kind or nature and from any suits, claims or demands (including
in respect of or for reasonable attorney's fees and other expenses) arising on
account of or in connection with any matter or thing or action or failure to act
by Indemnitees, or any of them, arising out of or relating to the Credit
Documents, including without limitation any use by Borrower of any proceeds of
the Revolving Loans, except to the extent such liability arises from the willful
misconduct or gross negligence of (a) Agent acting on behalf of the Lenders or
(b) such Indemnitee. Upon receiving knowledge of any suit, claim or demand
asserted by a third party that Agent or any Lender believes is covered by this
indemnity, Agent or such Lender shall give Borrower notice of the matter and an
opportunity to defend it, at Borrower's sole cost and expense, with legal
counsel satisfactory to Agent or such Lender, as the case may be. Agent or such
Lender may also require Borrower to defend the matter. Any failure or delay of
Agent or any Lender to notify Borrower of any such suit, claim or demand shall
not relieve Borrower of its obligations under this Paragraph 8.03 but shall
reduce such obligations to the extent of any increase in those obligations
caused solely by an such unreasonable failure or delay. The obligations of
Borrower under this Paragraph 8.03 shall survive the payment and performance of
the Obligations.
8.04. Waivers; Amendments. Any term, covenant, agreement or condition
of this Restated Credit Agreement or any other Credit Document may be amended or
waived if such amendment or waiver is in writing and is signed by Borrower and
the Required Lenders; provided, however that:
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(a) Any amendment, waiver or consent which (i) increases the
Total Revolving Loan Commitment, (ii) extends the Revolving Loan
Maturity Date, (iii) reduces the principal of or interest on any
Revolving Loan or any fees or other amounts payable for the account of
the Lenders hereunder, (iv) increases the LC Commitment or extends the
LC Facility Expiration Date, (v) postpones any date fixed for any
payment of the principal of or interest on any Revolving Loans or
Reimbursement Obligations or any fees or other amounts payable for the
account of the Lenders hereunder or thereunder, (v) amends this
Paragraph 8.04, (vi) amends the definition of Borrowing Base, Eligible
Accounts, Eligible Inventory or Required Lenders, (vii) releases any
part of the Collateral other than an immaterial part of the Collateral,
(viii) releases any Guarantor from its Guaranty or decreases the amount
of the obligations guaranteed by such Guarantor under its Guaranty, or
(ix) amends Subparagraph 5.02(m) must be in writing and signed by all
Lenders;
(b) Any amendment, waiver or consent which increases or
decreases the Revolving Loan Commitment or Proportionate Share of any
Lender must be in writing and signed by such Lender;
(c) Any amendment, waiver or consent which increases the LC
Commitment or otherwise affects the rights or obligations of Issuing
Lender must be in writing and signed by Issuing Lender; and
(d) Any amendment, waiver or consent which affects the rights
of Agent must be in writing and signed by Agent.
No failure or delay by Agent or any Lender in exercising any right hereunder
shall operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in such waiver or consent, a
waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
8.05. Successors and Assigns.
(a) Binding Effect. This Restated Credit Agreement and the
other Credit Documents shall be binding upon and inure to the benefit
of Borrower, the Lenders, Agent, all future holders of the Revolving
Loan Notes and their respective successors and permitted assigns,
except that Borrower may not assign or transfer any of its rights or
obligations under any Credit Document without the prior written consent
of Agent and each Lender. All references in this Restated Credit
Agreement to any Person shall be deemed to include all successors and
assigns of such Person.
(b) Participations. Any Lender may, in the ordinary course of
its commercial lending business and in accordance with applicable law,
at any time sell to one or more banks or other financial institutions
("Participants") participating interests in any Revolving Loan owing to
such Lender, any Revolving Loan Note held by such Lender, any Revolving
Loan Commitment of such Lender or any other interest of such Lender
under this Restated Credit Agreement and the other Credit Documents
without the
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consent of any other party hereto; provided, however, that a Lender may
not sell a participation which would increase the Taxes payable by
Borrower under Paragraph 2.11 without the consent of Borrower. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Restated Credit
Agreement to the other parties to this Restated Credit Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Revolving Loan Note for all purposes under this Restated Credit
Agreement and Borrower and Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Restated Credit Agreement; provided, however,
that any agreement pursuant to which any Lender sells a participating
interest to a Participant may require the selling Lender to obtain the
consent of such Participant in order for such Lender to agree in
writing to any amendment of a type specified in clause (a)(i), (a)(ii),
(a)(iii) or (a)(iv) of Paragraph 8.04. Borrower also agrees that any
Lender which has transferred all or part of its interests in the
Revolving Loan Commitments and the Revolving Loans to one or more
Participants shall, notwithstanding any such transfer, be entitled to
the full benefits accorded such Lender under Paragraph 2.10, Paragraph
2.11, and Paragraph 2.12, as if such Lender had not made such transfer.
(c) Assignments. Any Lender may, in the ordinary course of its
commercial lending business and in accordance with applicable law, at
any time, sell and assign to any Lender, any affiliate of a Lender or
any other bank or financial institution (individually, an "Assignee
Lender") all or a portion of its rights and obligations under this
Restated Credit Agreement and the other Credit Documents (such a sale
and assignment to be referred to herein as an "Assignment") pursuant to
an assignment agreement in the form of Exhibit L (an "Assignment
Agreement"), executed by each Assignee Lender and such assignor Lender
(an "Assignor Lender") and delivered to Agent for its acceptance and
recording in the Register; provided, however, that:
(i) Without the written consent of Borrower and Agent
(which consent of Borrower and Agent shall not be unreasonably
withheld), no Lender may make any Assignment to any Assignee
Lender (other than U.S. Bank National Association) which is
not, immediately prior to such Assignment, a Lender hereunder
or an affiliate which controls, is controlled by or is under
common control with a Lender hereunder;
(ii) Without the written consent of Borrower and
Agent (which consent of Borrower and Agent shall not be
unreasonably withheld), no Lender may make any Assignment to
any Assignee Lender unless, after giving effect to such
Assignment, (A) the Revolving Loan Commitment of the Assignee
Lender is $5,000,000 or an integral multiple thereof and (B)
the Revolving Loan Commitment of the Assignor Lender is either
(1) $0, if the Assignor Lender has assigned its entire
Revolving Loan Commitment, or (2) $5,000,000 or an integral
multiple thereof, if the Assignor Lender has assigned less
than its entire Revolving Loan Commitment; and
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(iii) No Lender may make any Assignment which does
not assign and delegate an equal pro rata interest in such
Lender's Revolving Loans, Revolving Loan Commitment and all
other rights, duties and obligations of such Lender under this
Restated Credit Agreement and the other Credit Documents.
Upon such execution, delivery, acceptance and recording of each
Assignment Agreement, from and after the Assignment Effective Date
determined pursuant to such Assignment Agreement, (A) each Assignee
Lender thereunder shall be a Lender hereunder with a Revolving Loan
Commitment as set forth on Attachment 1 to such Assignment Agreement
and shall have the rights, duties and obligations of such a Lender
under this Restated Credit Agreement and the other Credit Documents,
and (B) the Assignor Lender thereunder shall be a Lender with a
Revolving Loan Commitment as set forth on Attachment 1 to such
Assignment Agreement, or, if the Revolving Loan Commitment of the
Assignor Lender has been reduced to $0, the Assignor Lender shall cease
to be a Lender; provided, however, that any such Assignor Lender which
ceases to be a Lender shall continue to be entitled to the benefits of
any provision of this Restated Credit Agreement which by its terms
survives the termination of this Restated Credit Agreement. Each
Assignment Agreement shall be deemed to amend Schedule I to the extent,
and only to the extent, necessary to reflect the addition of each
Assignee Lender, the deletion of each Assignor Lender which reduces its
Revolving Loan Commitment to $0, and the resulting adjustment of
Revolving Loan Commitments arising from the purchase by each Assignee
Lender of all or a portion of the rights and obligations of an Assignor
Lender under this Restated Credit Agreement and the other Credit
Documents. On or prior to the Assignment Effective Date determined
pursuant to each Assignment Agreement, Borrower, at Assignor Lender's
expense, shall execute and deliver to Agent, in exchange for the
surrendered Revolving Loan Note of the Assignor Lender thereunder, a
new Revolving Loan Note to the order of each Assignee Lender thereunder
(with each new Revolving Loan Note to be in an amount equal to the
Revolving Loan Commitment assumed by such Assignee Lender) and, if the
Assignor Lender is continuing as a Lender hereunder, a new Revolving
Loan Note to the order of the Assignor Lender (with the new Revolving
Loan Note to be in an amount equal to the Revolving Loan Commitment
retained by it). Each such new Revolving Loan Note shall be dated the
Effective Date and otherwise be in the form of the Revolving Loan Note
replaced thereby (provided that Borrower shall not be obligated to pay
any additional interest to any Assignee Lender in respect of any
principal payments made prior to the Effective Date of the Assignment
to such Assignee Lender). The Revolving Loan Notes surrendered by the
Assignor Lender shall be returned by Agent to Borrower marked
"replaced". Each Assignee Lender which was not previously a Lender
hereunder and which is not incorporated under the laws of the United
States of America or a state thereof shall, within three (3) Business
Days of becoming a Lender, deliver to Borrower and Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or
4224 (or successor applicable form), as the case may be, certifying in
each case that such Lender is entitled to receive payments under this
Restated Credit Agreement without deduction or withholding of any
United States federal income taxes.
(d) Register. Agent shall maintain at its address referred to
in Paragraph 8.01 a copy of each Assignment Agreement delivered to it
and a register (the "Register") for the
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recordation of the names and addresses of the Lenders and the Revolving
Loan Commitments of each Lender from time to time. The entries in the
Register shall be conclusive in the absence of manifest error, and
Borrower, Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Revolving Loans recorded
therein for all purposes of this Restated Credit Agreement. The
Register shall be available for inspection by Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(e) Registration. Upon its receipt of an Assignment Agreement
executed by an Assignor Lender and an Assignee Lender (and, to the
extent required by Subparagraph 8.05(c), by Borrower and Agent),
together with payment to Agent by the Assignor Lender of a registration
and processing fee of $2,500, Agent shall (i) promptly accept such
Assignment Agreement and (ii) on the Effective Date of the Assignment
determined pursuant thereto record the information contained therein in
the Register and give notice of such acceptance and recordation to the
Lenders and Borrower. Agent may, from time to time at its election,
prepare and deliver to the Lenders and Borrower a revised Schedule I
reflecting the names, addresses and respective Revolving Loan
Commitments of all Lenders then parties hereto.
(f) Collateral Security. Notwithstanding any other provision
contained in this Restated Credit Agreement and any other Credit
Document to the contrary, any Lender may assign all or any portion of
the Revolving Loans held by it to any Federal Reserve Bank or the
United States Treasury as collateral security, provided that any
payment in respect of such assigned Revolving Loan made by Borrower to
or for the account of the assigning or pledging Lender in accordance
with the terms of this Restated Credit Agreement shall satisfy
Borrower's obligations hereunder in respect of such assigned Revolving
Loans to the extent of such payment. No such assignment shall release
the assigning Lender from its obligations hereunder.
(g) Confidentiality. Agent and the Lenders may disclose the
Credit Documents and any financial or other information relating to
Borrower or any Subsidiary to each other or to any Participant or
Assignee Lender or potential Participant or Assignee Lender which is
not a direct competitor of Borrower and which agrees in writing to
maintain the confidentiality thereof in accordance with safe and sound
lending practices.
8.06. Setoff; Security Interest.
(a) Setoff. In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right without prior
notice to Borrower, any such notice being expressly waived by Borrower
to the extent permitted by applicable law, upon the occurrence and
during the continuance of a Default or an Event of Default, to set-off
and apply against any Obligations of Borrower to such Lender which are
then due and payable, any amount owing from such Lender to Borrower, at
or at any time after, the happening of any of the above mentioned
events, and as security for such Obligations, Borrower hereby grants to
each Lender a continuing security interest in any and all deposits,
accounts or moneys of Borrower then or thereafter maintained with such
Lender, subject in each case to Subparagraph 2.09(b). The aforesaid
right of set-off may
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be exercised by such Lender against Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of
Borrower or against anyone else claiming through or against Borrower or
such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment
creditor, notwithstanding the fact that such right of set-off shall not
have been exercised by such Lender prior to the occurrence of a Default
or an Event of Default. Each Lender agrees promptly to notify Borrower
after any such set-off and application made by such Lender, provided
that the failure to give such notice shall not affect the validity of
such set-off and application.
(b) Security Interest. As security for the Obligations,
Borrower hereby grants to each Lender, for the benefit of all Lenders,
a continuing security interest in any and all deposit accounts or
moneys of Borrower now or hereafter maintained with such Lender. Each
Lender shall have all of the rights of a secured party with respect to
such security interest.
8.07. No Third Party Rights. Nothing expressed in or to be implied from
this Restated Credit Agreement is intended to give, or shall be construed to
give, any Person, other than the parties hereto and their permitted successors
and assigns hereunder, any benefit or legal or equitable right, remedy or claim
under or by virtue of this Restated Credit Agreement or under or by virtue of
any provision herein.
8.08. Partial Invalidity. If at any time any provision of this Restated
Credit Agreement is or becomes illegal, invalid or unenforceable in any respect
under the law or any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Restated Credit Agreement nor
the legality, validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby.
8.09. Arbitration.
(a) This Paragraph 8.09 concerns the resolution of any
controversies or claims between or among Borrower, any Lender and
Agent, including but not limited to those that arise from:
(i) This Restated Credit Agreement or any other
Credit Document;
(ii) Any violation of this Restated Credit Agreement
or any other Credit Document; or
(iii) Any claims for damages resulting from any
business conducted between Borrower and any Lender or Agent,
including claims for injury to persons, property or business
interests.
(b) At the request of Borrower, any Lender or Agent, any
controversies or claims will be settled by arbitration in accordance
with the United States Arbitration Act. The United States Arbitration
Act will apply even though this Restated Credit Agreement provides that
it is governed by California law.
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(c) Arbitration proceedings will be administered by the
American Arbitration Association and will be subject to its commercial
rules of arbitration. The arbitration will be conducted within the
California county of San Francisco. Borrower, the Lenders and Agent
expressly agree that the arbitrator(s) (i) shall apply contract law and
(ii) shall not be empowered to make any award which a California court
is not empowered to make or any award for punitive damages.
(d) For purposes of the application of the statute of
limitations, the filing of an arbitration pursuant to this paragraph is
the equivalent of the filing of a lawsuit, and any claim or controversy
which may be arbitrated under this paragraph is subject to any
applicable statute of limitations. The arbitrators will have the
authority to decide whether any such claim or controversy is barred by
the statute of limitations and if so to dismiss the arbitration on that
basis.
(e) If there is a dispute as to whether an issue is
arbitrable, the arbitrators will have the authority to resolve any such
dispute.
(f) The decision that results from an arbitration proceeding
may be submitted to any authorized court of law to be confirmed and
enforced.
(g) The procedure described above will not apply if the
controversy or claim, at the time of the proposed submission to
arbitration arises from or relates to an obligation to Lender secured
by real property located in California. If the obligation is secured by
real property, Borrower, each Lender and Agent must consent to
submission of the claim or controversy to arbitration. If all parties
do not consent to arbitration, the controversy or claim will be settled
as follows:
(i) Borrower, the Lenders and Agent will designate a
referee (or a panel of referees) selected under the auspices
of the American Arbitration Association in the same manner as
arbitrators are selected in Association-sponsored proceedings;
(ii) The designated referee (or the panel of
referees) will be appointed by a court as provided in
California Code of Civil Procedure Section 638 and the
following related sections;
(iii) The referee (or the presiding referee of the
panel) will be an active attorney or a retired judge; and
(iv) The award that results from the decision of the
referee (or the panel) will be entered as a judgment in the
court that appointed the referee, in accordance with the
provisions of California Code of Civil Procedure Sections 644
and 645.
(h) This Paragraph 8.09 does not limit the right of Borrower,
any Lender or Agent to:
(i) Exercise self-help remedies such as setoff;
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(ii) Foreclose against or sell any real or personal
property collateral; or
(iii) Take action in a court of law, before, during
or after the arbitration proceeding to obtain an interim
remedy or additional or supplementary remedies.
(i) The pursuit of or a decision in an action for interim,
additional or supplementary remedies, or the filing of a court action,
does not constitute a waiver of the right of Borrower, any Lender or
Agent, including the suing party, to submit the controversy or claim to
arbitration.
8.10. Jury Trial. EACH OF BORROWER, THE LENDERS AND AGENT, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS RESTATED CREDIT AGREEMENT OR ANY
OTHER CREDIT DOCUMENT NOT RESOLVED PURSUANT TO PARAGRAPH 8.09.
8.11. Counterparts. This Restated Credit Agreement may be executed in
any number of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for all
purposes.
SECTION IX. EFFECTIVE DATE OF RESTATED CREDIT AGREEMENT.
9.01. Effective Date. This Restated Credit Agreement shall become
effective on a Business Day on or prior to October 10, 2000 as designated by
Borrower in a written notice to Agent (the "Effective Date"), subject to receipt
by Agent (a) at least three (3) Business days prior to the Effective Date of
Borrower's written notice designating the Effective Date and (b) on or prior to
the Effective Date, of each item listed in Schedule 3.01(a), each in form and
substance reasonably satisfactory to the Lenders, and with sufficient copies
for, Agent and each Lender.
9.02. Loans Under Existing Credit Agreement. On the Effective Date, all
loans outstanding under the Existing Credit Agreement shall be deemed to be
Revolving Loans made by each Lender under this Restated Credit Agreement, and
all accrued unpaid interest thereon shall begin to accrue interest at the rates
set forth in this Restated Credit Agreement and all letters of credit issued by
the issuing lender under the Existing Credit Agreement shall be deemed to be
Letters of Credit issued by the Issuing Lender under this Restated Credit
Agreement.
9.03. Effect of Amendment and Restatement.
(a) On and after the Effective Date,
(i) this Restated Credit Agreement shall amend,
restate in its entirety and replace, without novation, the
Existing Credit Agreement,
(ii) the Restated Borrower Security Agreement shall
amend, restate in its entirety and replace, without novation,
the Third Amended and Restated
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Security Agreement dated as of November 12, 1998 executed by
Borrower in favor of Agent (the "Existing Borrower Security
Agreement"),
(iii) the Restated Borrower Pledge Agreement shall
amend, restate in its entirety and replace, without novation,
the Third Amended and Restated Pledge Agreement dated as of
November 12, 1998 executed by Borrower in favor of Agent (the
"Existing Borrower Pledge Agreement"),
(iv) the Restated Xxxx Canada Guaranty shall amend,
restate in its entirety and replace, without novation, the
Guaranty dated as of November 12, 1998 executed by Xxxx Canada
in favor of Agent (the "Existing Xxxx Canada Guaranty"),
(v) the Restated Xxxx Canada Pledge Agreement shall
amend, restate in its entirety and replace, without novation,
the Pledge Agreement dated as of November 12, 1998 executed by
Xxxx Canada in favor of Agent (the "Existing Xxxx Canada
Pledge Agreement"),
(vi) the Restated Xxxx-Tenex Guaranty shall amend,
restate in its entirety and replace, without novation, the
Guaranty dated as of November 12, 1998 executed by Xxxx-Tenex
in favor of Agent (the "Existing Xxxx-Tenex Guaranty"),
(vii) the Restated Xxxx-Tenex Security Agreements
shall amend, restate in its entirety and replace, without
novation, the Security Agreement dated as of November 12, 1998
executed by Xxxx-Tenex in favor of Agent and the Security
Agreement dated as of November 20, 1998 executed by Xxxx-Tenex
in favor of Agent (the "Existing Xxxx-Tenex Security
Agreements"),
(viii) the Restated Xxxx-Future Tech Guaranty shall
amend, restate in its entirety and replace, without novation,
the Guaranty dated as of July 20, 1999 executed by Xxxx-Future
Tech in favor of Agent (the "Existing Xxxx-Future Tech
Guaranty"),
(ix) the Restated Xxxx-Future Tech Security Agreement
shall amend, restate in its entirety and replace, without
novation, the Security Agreement dated as of July 20, 1999
executed by Xxxx-Future Tech in favor of Agent (the "Existing
Xxxx-Future Tech Security Agreement"),
(x) the Restated RDI Guaranty shall amend, restate in
its entirety and replace, without novation, the Guaranty dated
as of May 15, 2000 executed by RDI in favor of Agent (the
"Existing RDI Guaranty"),
(xi) the Restated RDI Pledge Agreement shall amend,
restate in its entirety and replace, without novation, the
Pledge Agreement dated as of May 15, 2000 executed by RDI in
favor of Agent (the "Existing RDI Pledge Agreement"), and
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(xii) the Restated RDI Security Agreement shall
amend, restate in its entirety and replace, without novation,
the Security Agreement dated as of May 15, 2000 executed by
RDI in favor of Agent (the "Existing RDI Security Agreement"),
and
(xiii) the Restated Xxxxx Europe Guaranty shall
amend, restate in its entirety and replace, without novation,
the Guaranty dated as of May 15, 2000 executed by Xxxxx Europe
in favor of Agent (the "Existing Xxxxx Europe Guaranty").
(b) The execution and delivery of this Restated Credit
Agreement, the other agreements referred to in Subparagraph 9.03(a) and
the other Credit Documents shall not (a) operate as a waiver of any
right, power or remedy of the Lenders under the Existing Agreements,
except to the extent expressly waived in this Restated Credit
Agreement, the other agreements referred to in Subparagraph 9.03(a) or
the other Credit Documents, or (b) extinguish or impair any obligations
of Borrower under the Existing Agreements except to the extent any such
obligation is actually satisfied by Borrower or any Subsidiary or
except as the Existing Agreements are amended on the date hereof.
[The next page is the signature page]
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IN WITNESS WHEREOF, Borrower, the Lenders and Agent have caused this
Restated Credit Agreement to be executed as of the day and year first above
written.
BORROWER: XXXX MICROPRODUCTS INC.
By:
--------------------------------------
Name:
Title:
AGENT: CALIFORNIA BANK & TRUST,
As Agent
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
LENDERS: CALIFORNIA BANK & TRUST,
As a Lender
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
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SCHEDULE I
LENDERS
Lender Revolving Loan Commitment
------ -------------------------
CALIFORNIA BANK & TRUST $50,000,000
Applicable Lending Office:
--------------------------
000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Address for Notices:
--------------------
000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Relationship Manager
Xxxx Microproducts
Telephone: (000) 000-0000
Facsimile (000) 000-0000
I-1
56
SCHEDULE 1.01
DEFINITIONS
"Accounts Receivable Purchase Agreement" shall mean that certain
Agreement for the Purchase, Sale and Servicing of Account Receivables, dated on
or about June 20, 2000, between TCFC and Xxxx-Future Tech, without regard to any
amendment thereof unless Required Lenders shall have consented to such
amendment.
"Adjusted Net Income" shall mean, with respect to any Person for any
period, the sum, determined on a consolidated basis in accordance with GAAP, of
the following:
(a) The net income or net loss of such Person and its
Subsidiaries for such period before provision for income taxes or
interest;
minus
(b) The sum of (i) all extraordinary and non-recurring income
of such Person and its Subsidiaries accruing during such period (to the
extent added in calculating net income or loss in clause (a) above) and
(ii) all dividends paid or declared by such Person and its Subsidiaries
during such period (except for dividends paid or payable to such Person
or any of its wholly-owned Subsidiaries).
"Adjusted Total Liabilities" shall mean, with respect to any Person for
any period, the sum of the following:
(a) The total liabilities of such Person and its Subsidiaries
(determined on a consolidated basis in accordance with GAAP);
plus
(b) To the extent not included in clause (a) above, all
liabilities of such Person and its Subsidiaries under or with respect
to (i) Synthetic Leases and (ii) letters of credit, banker's
acceptances or other similar facilities.
"Agent" shall have the meaning given to that term in clause (3) of the
introductory paragraph hereof or any other Person that assumes the duties and
responsibilities of Agent pursuant to Subparagraph 7.06.
"Affiliate" shall mean, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially or as a
trustee, guardian or other fiduciary, five percent (5%) or more of any class of
Equity Securities of such Person, (b) each Person that controls, is controlled
by or is under common control with such Person or any Affiliate of such Person
or (c) each of such Person's employees, officers, directors, joint venturers and
partners; provided, however, that in no case shall Agent or any Lender be deemed
to be an Affiliate of Borrower or any of its Subsidiaries for purposes of this
Restated Credit Agreement. For the purpose of this definition, "control" of a
Person shall mean the possession, directly or indirectly,
1.01-1
57
of the power to direct or cause the direction of its management or policies,
whether through the ownership of voting securities, by contract or otherwise.
"Agent's Fee Letter" shall mean the letter agreement dated the date
hereof by and between Borrower and Agent.
"Applicable Lending Office" shall mean, with respect to any Lender, (a)
initially, its office designated as such in Schedule I (or, in the case of any
Lender which becomes a Lender by an Assignment pursuant to Subparagraph 8.05(c),
its office designated as such in the applicable Assignment Agreement) and (b)
subsequently, such other office or offices of such Lender may designate to Agent
as the office at which such Lender's Revolving Loans will thereafter be
maintained and for the account of which all payments of principal of, and
interest on, such Lender's Revolving Loans will thereafter be made.
"Applicable Margin" shall mean, with respect to any Revolving LIBOR
Loan at any time, 1.75%.
"Assignee Lender" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment" shall have the meaning given to that term in Subparagraph
8.05(c).
"Assignment Agreement" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment Effective Date" shall have, with respect to each Assignment
Agreement, the meaning set forth therein.
"Assignor Lender" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Xxxx Canada" shall mean Xxxx Microproducts Canada Inc., a California
corporation and a wholly-owned Subsidiary of Borrower.
"Xxxx-Future Tech" shall mean Xxxx Microproducts-Future Tech, Inc., a
California corporation and a wholly-owned Subsidiary of Borrower.
"Bell-Tenex" shall mean Xxxx Microproducts Canada-Tenex Data ULC, a
Nova Scotia, Canada unlimited liability company and a wholly-owned Subsidiary of
Xxxx Canada.
"Borrower" shall have the meaning given to that term in clause (1) of
the introductory paragraph hereof.
"Borrowing Base" shall have the meaning given to that term in
Subparagraph 2.03(a).
"Borrowing Base Certificate" shall have the meaning given to that term
in Subparagraph 5.01(a).
"Business Day" shall mean any day on which (a) commercial banks are not
authorized or required to close in San Francisco, California or New York, New
York and (b) if such Business
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Day is related to a Revolving LIBOR Loan, dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Adequacy Requirement" shall have the meaning given to that
term in Subparagraph 2.10(d).
"Capital Asset" shall mean, with respect to any Person, tangible
property owned or leased (in the case of a Capital Lease) by such Person, or any
expense incurred by any Person that is required by GAAP to be reported as an
asset on such Person's balance sheet.
"Capital Expenditures" shall mean, with respect to any Person and any
period, all amounts expended and Indebtedness incurred or assumed by such Person
during such period for the acquisition of real property and other Capital Assets
(including amounts expended and Indebtedness incurred or assumed in connection
with Capital Leases).
"Capital Leases" shall mean any and all lease obligations that, in
accordance with GAAP, are required to be capitalized on the books of a lessee.
"CB&T" shall have the meaning given to that term in the introductory
paragraph hereof.
"Change of Law" shall have the meaning given to that term in
Subparagraph 2.10(b).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all property in which Agent or any Lender has a
Lien to secure the Obligations.
"Contractual Obligation" of any Person shall mean, any indenture, note,
security, deed of trust, mortgage, security agreement, lease, guaranty,
instrument, contract, agreement or other form of obligation to which such Person
is a party or by which such Person or any of its property is bound.
"Credit Documents" shall mean and include this Restated Credit
Agreement, the LC Applications, the Revolving Loan Notes, the Security
Documents, all amendments hereof and thereof, all waivers and consents hereunder
and thereunder and all other documents, instruments and agreements delivered by
Borrower or any of its Subsidiaries to Agent or any Lender in connection with
this Restated Credit Agreement.
"Credit Event" shall mean the making of any Revolving Loan, the
conversion of any Revolving Loan from one Type of Revolving Loan to another Type
or the selection of a new Interest Period for any Revolving LIBOR Loan, or the
issuance of any Letter of Credit or any amendment of any Letter of Credit which
increases its stated amount or extends its expiration date.
"Default" shall mean any event or circumstance not yet constituting an
Event of Default which with the giving of any notice or the lapse of any period
of time or both, would become an Event of Default.
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59
"Dollars" and "$" shall mean the lawful currency of the United States
of America and, in relation to any payment under this Restated Credit Agreement,
same day or immediately available funds.
"Drawing Payment" shall have the meaning given to that term in
Subparagraph 2.02(c).
"EBITDA" shall mean, with respect to any Person for any period, the sum
of the following, determined on a consolidated basis in accordance with GAAP
where applicable:
(a) The net income or net loss of such Person and its
Subsidiaries for such period before provision for income taxes;
plus
(b) The sum (to the extent deducted in calculating net income
or loss in clause (a) above) of (i) all Interest Expenses of such
Person and its Subsidiaries accruing during such period and (ii) all
depreciation and amortization of such Person and its Subsidiaries
accruing during such period.
"Effective Date" shall have the meaning given to that term in Paragraph
9.01.
"Eligible Accounts" shall mean, with respect to Borrower, the aggregate
net amount of all accounts (as defined in the California Uniform Commercial
Code) of Borrower, Xxxx-Tenex and RDI, except, to the extent not already
deducted, the following:
(a) Any account which does not arise from the sale or lease of
goods or services rendered to the account debtor thereon in the
ordinary course of Borrower's, Xxxx-Tenex's or RDI's business, or which
arises from a sale, lease or service which has not been fully performed
by Borrower, Xxxx-Tenex or RDI;
(b) Any account or portion thereof to the extent the same is
subject to any right of discount, credit, allowance, rescission,
setoff, claim or defense or which is otherwise not valid and
enforceable against the account debtor thereon;
(c) Any account which is not subject to a first priority
perfected security interest in favor of Agent for the benefit of Agent
and the Lenders;
(d) Any account which is not owned by Borrower, Xxxx-Tenex or
RDI free and clear of all Liens, rights and interests of all other
Persons except for Permitted Liens;
(e) Any account which is unpaid more than ninety (90) days
after the invoice date therefor;
(f) Any account arising from a consignment by Borrower,
Xxxx-Tenex or RDI as consignee or a COD shipment;
(g) Any account payable by (i) the United States government or
any department, agency or other subdivision thereof (except to the
extent Borrower complies with the
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60
Federal Assignment of Claims Act of 1940, as amended), (ii) a Person
located in any jurisdiction outside the United States or Canada
(excluding the provinces of Newfoundland, Nova Scotia, Xxxxxx Xxxxxx
Island, New Brunswick, Nunavut, Manitoba, Saskatchewan, Alberta and the
Yukon Territory), except to the extent secured by a letter of credit
acceptable to Agent, or (iii) an Affiliate of Borrower;
(h) Any account payable by an account debtor (i) which is the
subject of any bankruptcy, insolvency, liquidation or similar
proceeding, (ii) which has made an assignment for the benefit of its
creditors, (iii) for which a receiver has been appointed or (iv) which
has admitted in writing its inability to pay its debts as such debts
become due;
(i) All accounts payable by an account debtor which has failed
to pay twenty percent (20%) or more of its total accounts payable owed
to Borrower, RDI and/or Xxxx-Tenex (as applicable) within ninety (90)
days of their invoice date;
(j) Any account payable by an account debtor in which the
total accounts payable from such account debtor exceeds twenty five
percent (25%) of the total amount of all Eligible Accounts, to the
extent of such excess (except as approved from time to time by Agent);
and
(k) Any other account which Agent reasonably determines is
unlikely to be paid in full within ninety (90) days after the invoice
date.
(As used in clauses (a)-(k) of this definition, the term "account" when
used in the singular form shall mean an account arising from a single
invoice.)
"Eligible Inventory" shall mean, with respect to Borrower, the net book
value of all inventory (as defined in the California Uniform Commercial Code) of
Borrower, RDI and Xxxx-Tenex, except the following:
(a) Any inventory which is not held by or on behalf of
Borrower, RDI or Xxxx-Tenex for sale or lease in the ordinary course of
its business;
(b) Any inventory consisting of work-in-process;
(c) Any inventory which is not subject to a first priority
perfected security interest in favor of Agent for the benefit of Agent
and the Lenders;
(d) Any inventory located in any jurisdiction other than the
United States or Canada (excluding the provinces of Newfoundland, Nova
Scotia, Xxxxxx Xxxxxx Island, New Brunswick, Manitoba, Saskatchewan,
Alberta and Yukon Territory);
(e) Any inventory which is not owned by Borrower, RDI or
Xxxx-Tenex free and clear of all Liens, rights and interests of all
other Persons except for Permitted Liens;
(f) Any inventory which is obsolete, unsalable or damaged;
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61
(g) Any inventory which has been consigned by Borrower, RDI or
Xxxx-Tenex (except for such inventory on consignment approved from time
to time by Agent);
(h) The portion of any inventory shown on the books of
Borrower, RDI or Xxxx-Tenex representing any purchase price discount
earned by Borrower, RDI or Xxxx-Tenex; and
(i) Any other inventory which Agent reasonably determines is
unlikely to be sold at or above its net book value.
"Employee Benefit Plan" shall mean any employee benefit plan within the
meaning of section 3(3) of ERISA maintained or contributed to by Borrower or any
ERISA Affiliate, other than a Multiemployer Plan.
"Environmental Laws" means all Requirements of Law relating to the
protection of human health or the environment, including, without limitation,
(a) all Requirements of Law, pertaining to reporting, licensing, permitting,
investigation, and remediation of emissions, discharges, releases, or threatened
releases of hazardous materials, chemical substances, pollutants, contaminants,
or hazardous or toxic substances, materials or wastes whether solid, liquid, or
gaseous in nature, into the air, surface water, groundwater, or land, or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of chemical substances, pollutants,
contaminants, or hazardous or toxic substances, materials, or wastes, whether
solid, liquid, or gaseous in nature; and (b) all Requirements of Law pertaining
to the protection of the health and safety of employees or the public.
"Equity Securities" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, partnership interests or other equity
interests in and of such Person (regardless of how designated and whether or not
voting or non-voting) and (b) all warrants, options and other rights to acquire
any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be amended or supplemented, including any
rules or regulations issued in connection therewith.
"ERISA Affiliate" shall mean any Person which is treated as a single
employer with Borrower under Section 414 of the Code.
"Event of Default" shall have the meaning given to that term in
Paragraph 6.01.
"Existing Agreements" shall mean the Existing Xxxx Canada Guaranty, the
Existing Xxxx Canada Pledge Agreement, the Existing Xxxx-Future Tech Guaranty,
the Existing Xxxx-Future Tech Security Agreement, the Existing Xxxx-Tenex
Guaranty, the Existing Xxxx-Tenex Security Agreement, the Existing Borrower
Pledge Agreement, the Existing Borrower Security Agreement, the Existing Credit
Agreement, the Existing RDI Guaranty, the Existing RDI Security Agreement, the
Existing RDI Pledge Agreement and the Existing Xxxxx Europe Guaranty.
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62
"Existing Xxxx Canada Guaranty" shall have the meaning given to that
term in Paragraph 9.03.
"Existing Xxxx Canada Pledge Agreement" shall have the meaning given to
that term in Paragraph 9.03.
"Existing Xxxx-Future Tech Guaranty" shall have the meaning given to
that term in Paragraph 9.03.
"Existing Xxxx-Future Tech Security Agreement" shall have the meaning
given to that term in Paragraph 9.03.
"Existing Xxxx-Tenex Guaranty" shall have the meaning given to that
term in Paragraph 9.03.
"Existing Xxxx-Tenex Security Agreement" shall have the meaning given
to that term in Paragraph 9.03.
"Existing Borrower Pledge Agreement" shall have the meaning given to
that term in Paragraph 9.03.
"Existing Borrower Security Agreement" shall have the meaning given to
that term in Paragraph 9.03.
"Existing Credit Agreement" shall have the meaning given to that term
in Recital A.
"Existing RDI Guaranty" shall have the meaning given to that term in
Paragraph 9.03.
"Existing RDI Security Agreement" shall have the meaning given to that
term in Paragraph 9.03.
"Existing RDI Pledge Agreement" shall have the meaning given to that
term in Paragraph 9.03.
"Existing Xxxxx Europe Guaranty" shall have the meaning given to that
term in Paragraph 9.03.
"Federal Funds Rate" shall mean, for any day, the weighted average of
the per annum rates on overnight Federal funds transactions with member banks of
the Federal Reserve System arranged by Federal funds brokers as published by the
Federal Reserve Bank of New York for such day, (or, if such rate is not so
published for any day, the average rate quoted to Agent on such day by three (3)
Federal funds brokers of recognized standing selected by Agent).
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System.
"Financial Statements" shall mean, with respect to any accounting
period for any Person, statements of income and of changes in cash flow of such
Person for such period, and balance
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63
sheets of such Person as of the end of such period, setting forth in each case
in comparative form figures for the corresponding period in the preceding fiscal
year if such period is less than a full fiscal year or, if such period is a full
fiscal year, corresponding figures from the preceding annual audit, all prepared
in reasonable detail and in accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles and
practices as in effect in the United States of America from time to time,
consistently applied, provided, however, that with respect to Borrower, the
definition of "current liabilities" as set forth in GAAP shall include the
Obligations.
"Governmental Authority" shall mean any domestic or foreign national,
state or local government, any political subdivision thereof, any department,
agency, authority or bureau of any of the foregoing, or any other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, without limitation, the
Federal Deposit Insurance Corporation, the Federal Reserve Board, the
Comptroller of the Currency, any central bank or any comparable authority.
"Governmental Charges" shall mean all levies, assessments, fees, claims
or other charges imposed by any Governmental Authority upon or relating to (i)
Borrower or any of its Subsidiaries, (ii) the Revolving Loans, (iii) employees,
payroll, income or gross receipts of Borrower or any of its Subsidiaries, (iv)
the ownership or use of any of its assets by Borrower or any of its Subsidiaries
or (v) any other aspect of the business of Borrower or any of its Subsidiaries.
"Governmental Rule" shall mean any law, rule, regulation, ordinance,
order, code interpretation, judgment, decree, directive, guidelines, policy or
similar form of decision of any Governmental Authority.
"Guaranty" shall mean, collectively, the Xxxx Canada Guaranty, the
Xxxx-Tenex Guaranty, the RDI Guaranty, the Xxxxx Europe Guaranty and the
Xxxx-Future Tech Guaranty.
"Indebtedness" of any Person shall mean and include (a) all items of
indebtedness and liabilities which, in accordance with GAAP, would be included
in determining liabilities that are shown on the liability side of the balance
sheet of such Person, (b) all indebtedness and liabilities of other Persons
assumed or guaranteed by such Person or in respect of which such Person is
secondarily or contingently liable whether by any agreement to acquire
indebtedness and liabilities or to supply or advance funds or otherwise, and (c)
all indebtedness and liabilities of other Persons secured by any Lien in any
property of such Person (including without limitation Capital Leases).
"Indemnitees" shall have the meaning given to that term in Paragraph
8.03.
"Interest Account" shall have the meaning given to that term in
Subparagraph 2.07(b).
"Interest Coverage Ratio" shall mean, with respect to any Person for
any period, the ratio, determined on a consolidated basis in accordance with
GAAP, of (a) the sum of the Adjusted Net Income and Interest Expenses of such
Person and its Subsidiaries for such period to (b) the Interest Expenses of such
Person and its Subsidiaries for such period.
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64
"Interest Expenses" shall mean, with respect to any Person for any
period, the sum, determined on a consolidated basis in accordance with GAAP, of
(a) all interest expenses of such Person and its Subsidiaries during such period
(including, without limitation, (i) the amortization of debt discounts, (ii) the
amortization of all fees payable in connection with the incurrence of
Indebtedness to the extent included in interest expense and (iii) the portion of
any Capitalized Lease Obligations allocable to interest expense and financing
charges attributable to Synthetic Leases whether calculated as interest expense
or rental expense) plus (b) all letter of credit fees payable by such Person
accruing during such period.
"Interest Period" shall mean, with respect to any Revolving LIBOR Loan,
the time periods selected by Borrower pursuant to Subparagraph 2.01(b) or
Subparagraph 2.01(d) which commences on the first day of such Revolving Loan or
the effective date of any conversion and ends on the last day of such time
period, and thereafter, each subsequent time period selected by Borrower
pursuant to Subparagraph 2.01(e) which commences on the last day of the
immediately preceding time period and ends on the last day of that time period.
"Investment" of any Person shall mean any loan or advance of funds by
such Person to any other Person (other than advances to employees of such Person
for moving and travel expense, drawing accounts and similar expenditures in the
ordinary course of business), any purchase or other acquisition of any Equity
Securities or Indebtedness of any other Person, any capital contribution by such
Person to or any other investment by such Person in any other Person (including,
without limitation, any Indebtedness incurred by such Person of the type
described in clauses (b) and (c) of the definition of "Indebtedness" on behalf
of any other Person); provided, however, that Investments shall not include
accounts receivable or other indebtedness owed by customers of such Person which
are current assets and arose from sales in the ordinary course of such Person's
business.
"Issuing Lender" shall mean CB&T, in its capacity as issuer of Letters
of Credit under Paragraph 2.02.
"LC Application" shall have the meaning given to that term in
Subparagraph 2.02(b).
"LC Commitment" shall have the meaning given to that term in
Subparagraph 2.02(a).
"LC Facility Expiration Date" shall have the meaning given to that term
in Subparagraph 2.02(a).
"LC Issuance Fees" shall have the meaning given to that term in
Subparagraph 2.04(c).
"LC Usage Fee" shall have the meaning given to that term in
Subparagraph 2.04(c).
"Lender" shall have the meaning given to that term in clause (2) of the
introductory paragraph hereof. Unless otherwise indicated, the term "Lenders"
shall include any Lender acting as Issuing Lender but not in its capacity as
such.
"Letter of Credit" shall have the meaning given to that term in
Subparagraph 2.02(a).
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65
"Leverage Ratio" shall mean, with respect to Borrower at any time, the
ratio, determined on a consolidated basis in accordance with GAAP, of (a) the
Adjusted Total Liabilities of Borrower and its Subsidiaries at such time to (b)
the sum of (i) Tangible Net Worth of Borrower and its Subsidiaries at such time
and (ii) Indebtedness of Borrower and its Subsidiaries under the RSA
Subordinated Indebtedness at such time.
"LIBO Rate" shall mean, with respect to any Interest Period for the
Revolving LIBOR Loans in any Revolving Loan Borrowing consisting of Revolving
LIBOR Loans, a rate per annum equal to the quotient of (a) the rate per annum at
which Dollar deposits are offered to CB&T in the London interbank eurodollar
currency market on the second Business Day prior to the commencement of such
Interest Period at or about 11:00 A.M. (London time) (for delivery on the first
day of such Interest Period) for a term comparable to such Interest Period and
in an amount approximately equal to the amount of the Revolving Loan to be made
by CB&T as part of such Revolving Loan Borrowing, divided by (b) one minus the
Reserve Requirement for such Revolving Loans in effect from time to time. The
LIBO Rate applicable to any Revolving Loan for any Interest Period shall be
automatically adjusted during such Interest Period to reflect any change in the
applicable Reserve Requirement.
"Lien" shall mean, with respect to any property, any security interest,
mortgage, pledge, lien, claim, charge or other encumbrance in, of, or on such
property or the income therefrom, including, without limitation, the interest of
a vendor or lessor under a conditional sale agreement, Capital Lease or other
title retention agreement, or any agreement to provide any of the foregoing, and
the filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction.
"Margin Stock" shall have the meaning given to that term in Regulation
U issued by the Federal Reserve Board, as amended from time to time, and any
successor regulation thereto.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, prospects or financial or other condition of
Borrower or any of its Subsidiaries; (b) the ability of Borrower or any of its
Subsidiaries to pay or perform the Obligations in accordance with the terms of
this Restated Credit Agreement and the other Credit Documents; (c) the rights
and remedies of Agent or any Lender under this Restated Credit Agreement, the
other Credit Documents or any related document, instrument or agreement or (d)
the value of the Collateral, Agent's or any Lender's security interests in the
Collateral or the perfection or priority of such security interests.
"Maturity" shall mean, with respect to any Revolving Loan,
Reimbursement Obligation, interest, fees or other amount payable by Borrower
under this Restated Credit Agreement or the other Credit Documents, the date
such Revolving Loan, Reimbursement Obligation, interest, fee or other amount
becomes due, whether upon the stated maturity or due date, upon acceleration or
otherwise.
"Multiemployer Plan" shall mean any multiemployer plan within the
meaning of section 3(37) of ERISA maintained or contributed to by Borrower or
any ERISA Affiliate.
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66
"Net Income After Tax" shall mean, with respect to any Person for any
period, the net income or net loss of such Person and its Subsidiaries for such
period (after provision for income taxes), determined on a consolidated basis in
accordance with GAAP.
"Net Operating Income" shall mean, with respect to any Person for any
period, the sum, determined on a consolidated basis in accordance with GAAP, of
the following:
(a) The net income or net loss of such Person and its
Subsidiaries for such period (before provision for income taxes);
plus
(b) The sum (to the extent deducted in calculating net income
or loss in clause (a) above) of all extraordinary and non-recurring
expenses of such Person and its Subsidiaries accruing during such
period;
minus
(c) The sum (to the extent added in calculating net income or
loss in clause (a) above) of all extraordinary and non-recurring income
of such Person and its Subsidiaries accruing during such period.
"Net Proceeds" shall mean with respect to the sale or issuance of any
Indebtedness, any Equity Security or any other security by any Person, the
aggregate consideration received by such Person from such sale or issuance less
the sum of the actual amount of the reasonable fees and commissions payable to
Persons other than such Person or any Affiliate of such Person, the reasonable
legal and other professional expenses and the other reasonable expenses directly
related to such sale or issuance that are to be paid by such Person.
"Notice of Revolving Loan Borrowing" shall have the meaning given to
that term in Subparagraph 2.01(b).
"Notice of Revolving Loan Conversion" shall have the meaning given to
that term in Subparagraph 2.01(d).
"Notice of Revolving Loan Interest Period Selection" shall have the
meaning given to that term in Subparagraph 2.01(e).
"Obligations" shall mean and include, with respect to Borrower, all
loans, advances, debts, liabilities, and obligations, howsoever arising, owed by
Borrower to Agent or the Lenders of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the payment of
money), direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising pursuant to the terms of this Restated Credit
Agreement or any of the other Credit Documents, including without limitation all
interest, fees, charges, expenses, attorneys' fees and accountants' fees
chargeable to Borrower or payable by Borrower hereunder or thereunder.
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67
"Outstanding Facilities Credit" shall have the meaning given to that
term in Subparagraph 2.03(a).
"Participant" shall have the meaning given to that term in Subparagraph
8.05(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Dividend" shall mean and include:
(a) Dividends payable solely in the common stock of Borrower;
(b) Dividends payable by any wholly-owned Subsidiary solely to
Borrower;
(c) Repurchases of stock issued under the Borrower's stock
option plan in connection with termination of employment or service;
and
(d) share of stock issued upon exercise of any options.
"Permitted Indebtedness" shall mean and include:
(a) Indebtedness to subcontractors and trade creditors
incurred in the ordinary course of business;
(b) Indebtedness of Borrower to the Lenders and Agent under
this Restated Credit Agreement and the other Credit Documents;
(c) Unsecured Indebtedness of Borrower and secured
Indebtedness of Borrower under the RSA Subordinated Indebtedness,
provided that (A) the Obligations shall at all times rank senior in
right of payment to such Indebtedness, (B) such Indebtedness does not
contain material provisions that are more restrictive to Borrower and
its Subsidiaries than the material provisions contained in this
Restated Credit Agreement, (C) other than the scheduled payments of
principal under the RSA Subordinated Indebtedness, no principal payable
in connection with such Indebtedness is scheduled for payment on or
prior to the Revolving Loan Maturity Date, and (D) such Indebtedness is
otherwise acceptable to the Lenders in their sole discretion;
(d) Purchase money Indebtedness incurred to acquire a Capital
Asset provided that (i) such Indebtedness does not exceed the purchase
price of such Capital Asset, (ii) such Indebtedness is incurred not
later than thirty (30) days after the acquisition of such asset and
(iii) the sum of all payments due on such purchase money Indebtedness
and Capital Leases and operating leases referred to in the following
clause (e) shall not exceed in the aggregate $500,000 in any fiscal
year;
(e) Indebtedness under Capital Leases and operating leases
provided that the sum of all payments due on such Capital Leases and
operating leases and purchase money Indebtedness referred to in the
preceding clause (d) shall not exceed in the aggregate $500,000 in any
fiscal year; provided, however, that amounts paid by Borrower pursuant
to that certain operating lease agreement, dated as of October 22,
1999, by and between
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68
Borrower and Winthrop Resources Corporation, shall be excluded from the
calculation set forth in this clause (e) and the preceding clause (d)
for so long as the sum of all payments due thereunder does not exceed
in the aggregate $1,000,000 in any fiscal year;
(f) Indebtedness of any wholly-owned Subsidiary of Borrower to
Borrower arising from the extension by Borrower to such Subsidiary of
working capital financing in the ordinary course of Borrower's and such
Subsidiary's businesses, provided that, to the extent requested by
Agent, such Subsidiary has taken all steps necessary to grant to
Borrower and perfect security interests in the assets of such
Subsidiary as security for such Indebtedness;
(g) Indebtedness arising from the endorsement of instruments
in the ordinary course of business;
(h) Indebtedness of Borrower and its Subsidiaries to any
Lender under Rate Contracts, provided, that all such arrangements are
entered into in connection with bona fide hedging operations and not
for speculation;
(i) Indebtedness of Xxxx-Future Tech arising under the
Accounts Receivable Purchase Agreement and Indebtedness of Borrower
pursuant to any guaranty thereof;
(j) Indebtedness of Ideal Hardware Limited arising under the
Advice of Borrowing Terms dated July 11, 2000 by and between Ideal
Hardware Limited and National Westminster Bank Plc (without regard to
any amendment thereof unless consented to by Required Lenders);
provided that the aggregate Indebtedness thereunder does not exceed at
any time an amount equivalent to $55,000,000; and
(k) Other Indebtedness not exceeding $100,000 at any time.
"Permitted Investments" shall mean and include:
(a) Deposits with commercial banks organized under the laws of
the United States or a state thereof to the extent such deposits are
fully insured by the Federal Deposit Insurance Corporation;
(b) Investments in marketable obligations issued or fully
guaranteed by the United States and maturing not more than ninety (90)
days from the date of issuance;
(c) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of customers or
suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers;
(d) Investments arising under Rate Contracts otherwise
permitted pursuant to clause (h) of the definition of "Permitted
Indebtedness";
(e) Investments in Subsidiaries existing as of the date
hereof; and
1.01-13
69
(f) Investments not otherwise permitted hereby not exceeding
in the aggregate $50,000 at any time outstanding.
"Permitted Liens" shall mean and include:
(a) Liens for taxes or other governmental charges not at the
time delinquent or thereafter payable without penalty or being
contested in good faith, provided provision is made to the reasonable
satisfaction of Agent for the eventual payment thereof if subsequently
found payable;
(b) Liens of carriers, warehousemen, mechanics, materialmen,
vendors, and landlords incurred in the ordinary course of business for
sums not overdue or being contested in good faith, provided provision
is made to the reasonable satisfaction of Agent for the eventual
payment thereof if subsequently found payable;
(c) Deposits under workers' compensation, unemployment
insurance and social security laws or to secure the performance of
bids, tenders, contracts (other than for the repayment of borrowed
money) or leases, or to secure statutory obligations of surety or
appeal bonds or to secure indemnity, performance or other similar bonds
in the ordinary course of business;
(d) Liens arising out of a judgment or award not exceeding
$100,000 (exclusive of any amounts covered by insurance issued by a
Person not an Affiliate of Borrower) with respect to which an appeal is
being prosecuted, a stay of execution pending appeal having been
secured;
(e) Liens securing purchase money indebtedness if such
indebtedness is Permitted Indebtedness pursuant to clause (d) of the
definition thereof and such Liens do not extend to property other than
the property financed with such indebtedness;
(f) Liens securing obligations under a Capital Lease if such
lease is Permitted Indebtedness pursuant to clause (e) of the
definition thereof and such Liens do not extend to property other than
the property leased under such Capital Lease;
(g) Liens in favor of Agent or any Lender to secure the
Obligations;
(h) Leases, subleases, licenses and sublicenses granted to
Borrower the granting of which is not prohibited pursuant to the
definition of Permitted Indebtedness;
(i) Liens in favor of customs and revenue authorities which
secure payment of duties in connection with the importation of goods;
(j) Liens existing on property acquired by Borrower or any of
its Subsidiaries at the time of such acquisition (including Liens on
the assets of any Person at the time such Person becomes a Subsidiary
of Borrower), unless such Liens were created in contemplation of such
acquisition;
1.01-14
70
(k) Liens on insurance policies and the proceeds thereof
incurred solely to secure the financing of premiums owing with respect
thereto;
(l) Liens in favor of Borrower;
(m) Liens on accounts of Xxxx-Future Tech that are sold to
Transamerica Commercial Finance Corporation pursuant to the Accounts
Receivable Purchase Agreement;
(n) Liens arising under the RSA Subordinated Indebtedness;
provided that at all times (whether before, during or after any
dissolution, winding up, liquidation, arrangement, reorganization,
adjustment, protection or relief of Borrower or its debts) such Liens
are and shall be subordinate to the Liens in favor of Agent and the
Lenders, notwithstanding the time of perfection of such Liens or any
applicable law to the contrary;
(o) Liens on property of Ideal Hardware Limited arising under
the Advice of Borrowing Terms dated July 11, 2000 by and between Ideal
Hardware Limited and National Westminster Bank Plc (without regard to
any amendment thereof unless consented to by Required Lenders);
provided that the total amount of Indebtedness of Ideal Hardware
Limited thereunder does not exceed at any time an amount equivalent to
$55,000,000; and
(p) Such minor defects, irregularities, encumbrances,
easements, rights of way, and clouds on title as normally exist on
similar properties which do not, individually or in the aggregate,
materially impair the property affected thereby or the use thereof.
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a joint venture, a
trust or other entity or a Governmental Authority.
"Prime Rate" shall mean the per annum rate publicly announced by CB&T
from time to time at its head office as its prime rate. The Prime Rate is
determined by CB&T from time to time as a means of pricing credit extensions to
some customers and is neither directly tied to any external rate of interest or
index nor necessarily the lowest rate of interest charged by CB&T at any given
time for any particular class of customers or credit extensions.
"Proportionate Share" shall mean, with respect to any Lender at any
time, a fraction (expressed as a percentage), the numerator of which is such
Lender's Revolving Loan Commitment at such time and the denominator of which is
the Total Revolving Loan Commitment at such time.
"Quick Ratio" shall mean, with respect to any Person at any time, the
ratio, determined on a consolidated basis in accordance with GAAP, of (a) the
cash and trade accounts receivable of such Person and its Subsidiaries at such
time to (b) the current liabilities of such Person and its Subsidiaries at such
time.
1.01-15
71
"Rate Contract Maximum Exposure" shall mean an amount equal to 15% of
the aggregate U.S. Dollar amount of all outstanding Rate Contracts entered into
by Borrower and a Lender.
"Rate Contracts" shall mean swap agreements (as that term is defined in
Section 101 of the Federal Bankruptcy Reform Act of 1978, as amended) and any
other agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.
"RDI" shall mean Xxxxx Data, Inc., a Minnesota corporation.
"Reimbursement Obligation" shall have the meaning given to that term in
Subparagraph 2.02(c).
"Reimbursement Payment" shall have the meaning given to that term in
Subparagraph 2.02(c).
"Reportable Event" shall have the meaning given to that term in ERISA
and applicable regulations thereunder.
"Required Banks" shall mean (a) at any time Revolving Loans are
outstanding, Lenders holding sixty-six and two-thirds percent (66 2/3%) or more
of the aggregate principal amount of such Revolving Loans and (b) at any time no
Revolving Loans are outstanding, Lenders whose Proportionate Shares equal or
exceed sixty-six and two-thirds percent (66 2/3%).
"Requirement of Law" applicable to any Person shall mean (a) the
Articles or Certificate of Incorporation and By-laws, Partnership Agreement or
other organizational or governing documents of such Person, (b) any Governmental
Rule applicable to such Person, (c) any license, permit, approval or other
authorization granted by any Governmental Authority to or for the benefit of
such Person and (d) any judgment, decision or determination of any Governmental
Authority or arbitrator, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Reserve Requirement" shall mean, with respect to any day in an
Interest Period for a Revolving LIBOR Loan, the aggregate of the reserve
requirement rates (expressed as a decimal) in effect on such day for
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of the Federal Reserve Board) required to be maintained by a member
bank of the Federal Reserve System. As used herein, the term "reserve
requirement" shall include, without limitation, any basic, supplemental or
emergency reserve requirements imposed on Lender by any Governmental Authority.
"Restated Xxxx Canada Guaranty" shall have the meaning given to that
term in Subparagraph 2.13(a).
"Restated Xxxx Canada Pledge Agreement" shall have the meaning given to
that term in Subparagraph 2.13(a).
1.01-16
72
"Restated Xxxx-Future Tech Guaranty" shall have the meaning given to
that term in Subparagraph 2.13(a).
"Restated Xxxx-Future Tech Security Agreement" shall have the meaning
given to that term in Subparagraph 2.13(a).
"Restated Xxxx-Tenex Canadian Security Documents" shall have the
meaning given to that term in Subparagraph 2.13(a).
"Restated Xxxx-Tenex Guaranty" shall have the meaning given to that
term in Subparagraph 2.13(a).
"Restated Xxxx-Tenex Security Agreement" shall have the meaning given
to that term in Subparagraph 2.13(a).
"Restated Borrower Pledge Agreement" shall have the meaning given to
that term in Subparagraph 2.13(a).
"Restated Borrower Security Agreement" shall have the meaning given to
that term in Subparagraph 2.13(a).
"Restated Credit Agreement" shall have the meaning given to that term
in the introductory paragraph hereof.
"Revolving LIBOR Loan" shall have the meaning given to that term in
Subparagraph 2.01(b).
"Revolving Loan" shall have the meaning given to that term in
Subparagraph 2.01(a).
"Revolving Loan Borrowing" shall mean a borrowing by Borrower
consisting of a Revolving Loan made by each Lender on the same date and of the
same Type pursuant to a single Notice of Revolving Loan Borrowing.
"Revolving Loan Commitment" shall mean, with respect to each Lender,
the amount set forth opposite the name of such Lender in Schedule I under the
column entitled "Revolving Loan Commitment" or as reduced from time to time
pursuant to Paragraph 2.03 hereof.
"Revolving Loan Commitment Fees" shall have the meaning given to that
term in Subparagraph 2.04(b).
"Revolving Loan Maturity Date" shall have the meaning given to that
term in Subparagraph 2.01(a).
"Revolving Loan Note" shall have the meaning given to that term in
Subparagraph 2.07(a).
"Revolving Prime Rate Loan" shall have the meaning given to that term
in Subparagraph 2.01(b).
1.01-17
73
"RSA Subordinated Indebtedness" shall mean Indebtedness of Borrower
under the RSA Securities Purchase Agreement dated as of July 6, 2000 by and
between Borrower and The Retirement Systems of Alabama.
"Security Documents" shall mean and include the Restated Borrower
Security Agreement, the Restated Borrower Pledge Agreement, the Restated Xxxx
Canada Guaranty, the Restated Xxxx Canada Pledge Agreement, the Restated
Xxxx-Tenex Guaranty, the Restated Xxxx-Tenex Security Agreement, the Restated
Xxxx-Tenex Canadian Security Documents, the Restated Xxxx-Future Tech Guaranty,
the Restated Xxxx-Future Tech Security Agreement, the Restated Xxxx-Future Tech
Security Documents and all other documents, instruments and agreements delivered
to Agent or any Lender to secure the Obligations or in connection with the
Collateral.
"Solvent" shall mean, with respect to any Person on any date, that on
such date (a) the fair value of the property of such Person is greater than the
fair value of the liabilities (including, without limitation, contingent
liabilities) of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute an unreasonably small amount of capital.
"Subordinated Indebtedness" shall mean the secured and unsecured
subordinated Indebtedness of Borrower permitted pursuant to clause (c) of the
definition of "Permitted Indebtedness."
"Subsidiary" of any Person shall mean (a) any corporation of which more
than 50% of the issued and outstanding Equity Securities having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries, (b) any partnership, joint venture,
limited liability company or other association of which more than 50% of the
equity interest having the power to vote, direct or control the management of
such partnership, joint venture or other association is at the time owned and
controlled by such Person, by such Person and one or more of the other
Subsidiaries or by one or more of such Person's other subsidiaries and (c) any
other Person included in the Financial Statements of such Person on a
consolidated basis.
"Synthetic Lease" shall mean an off-balance sheet financing arrangement
for equipment or real estate which is treated as an operating lease under GAAP
but pursuant to which the lessee of such equipment or real estate has the
benefits and burdens of ownership of the leased equipment or real estate for
U.S. tax purposes.
"Tangible Net Worth" shall mean, with respect to any Person at any
time, the remainder at such time, determined on a consolidated basis in
accordance with GAAP, of (a) the total assets of such Person and its
Subsidiaries minus (b) the sum (without limitation and without duplication
1.01-18
74
of deductions) of (i) the total liabilities of such Person and its Subsidiaries,
(ii) all reserves established by such Person and its Subsidiaries for
anticipated losses and expenses (to the extent not deducted in calculating total
assets in clause (a) above), (iii) all intangible assets of such Person and its
Subsidiaries (to the extent included in calculating total assets in clause (a)
above), including, without limitation, goodwill (including any amounts, however
designated on the balance sheet, representing the cost of acquisition of
businesses and investments in excess of underlying tangible assets), trademarks,
trademark rights, trade name rights, copyrights, patents, patent rights,
licenses, unamortized debt discount, marketing expenses, organizational
expenses, non-compete agreements and deferred research and development and (iv)
the amount, if any, by which the aggregate intercompany receivables owed to such
Person by its Affiliates exceeds the aggregate intercompany receivables payable
by such Person to its Affiliates.
"Taxes" shall have the meaning given to such term in Paragraph 2.11.
"TCFC" shall mean Transamerica Commercial Finance Corporation, a
Delaware corporation.
"Total Revolving Loan Commitment" shall mean Fifty Million Dollars
($50,000,000) or, if such amount is reduced pursuant to Subparagraph 2.03(b),
the amount to which so reduced and in effect at such time.
"Total Unused Revolving Loan Commitment" shall mean, at any time, the
remainder of (a) the Total Revolving Loan Commitment at such time minus (b) the
Outstanding Facilities Credit at such time.
"Type" shall mean, with respect to any Revolving Loan or Revolving Loan
Borrowing at any time, the classification of such Revolving Loan or Revolving
Loan Borrowing by the type of interest rate it then bears, whether an interest
rate based on the Prime Rate or the LIBO Rate.
"Working Capital" shall mean, with respect to any Person at any time,
the working capital of such Person and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
1.01-19
75
SCHEDULE 3.01(a)
EFFECTIVE DATE CONDITIONS PRECEDENT
A. PRINCIPAL CREDIT DOCUMENTS.
--------------------------
(1) The Fourth Amended and Restated Credit Agreement, duly
executed by Borrower, each Lender and Agent;
(2) The Revolving Loan Note payable to each Lender, duly
executed by Borrower;
(3) The Restated Borrower Security Agreement, duly executed by
Borrower;
(4) The Restated Borrower Pledge Agreement, duly executed by
Borrower;
(5) The Restated Xxxx Canada Guaranty, duly executed by Xxxx
Canada;
(6) The Restated Xxxx Canada Pledge Agreement, duly executed
by Xxxx Canada;
(7) The Restated Xxxx-Tenex Guaranty, duly executed by
Xxxx-Tenex;
(8) The Restated Xxxx-Tenex Security Agreements, duly executed
by Xxxx-Tenex;
(9) The Restated Xxxx-Future Tech Guaranty, duly executed by
Xxxx-Future Tech;
(10) The Restated Xxxx-Future Tech Security Agreement, duly
executed by Xxxx-Future Tech;
(11) The Restated RDI Guaranty, duly executed by RDI;
(12) The Restated RDI Pledge Agreement, duly executed by RDI;
(13) The Restated RDI Security Agreement, duly executed by
RDI;
(14) The Restated Xxxxx Europe Guaranty, duly executed by
Xxxxx Europe; and
(15) The Agent's Fee Letter.
B. BORROWER CORPORATE DOCUMENTS.
(1) The Articles of Incorporation of Borrower, certified as of
a recent date prior to the Effective Date by the Secretary of State of
California;
(2) A Certificate of Good Standing (or comparable certificate)
for Borrower, certified as of a recent date prior to the Effective Date
by the Secretary of State of California;
(3) A certificate of the Secretary of Borrower, dated as of
the date of this Restated Credit Agreement, certifying (a) that the
Articles of Incorporation of Borrower, in the
3.01(e)-1
76
form certified by the Secretary of State of California and delivered to
Agent pursuant to item C(1) hereof, is in full force and effect and has
not been amended, supplemented, revoked or repealed since the date of
such certification; (b) that attached thereto is a true and correct
copy of the Bylaws of Borrower as in effect on the Effective Date; (c)
that attached thereto are true and correct copies of resolutions duly
adopted by the Board of Directors of Borrower and continuing in effect,
which authorize the execution, delivery and performance by Borrower of
this Restated Credit Agreement and the other Credit Documents executed
or to be executed by Borrower and the consummation of the transactions
contemplated hereby and thereby; and (d) that there are no proceedings
for the dissolution or liquidation of Borrower (commenced or
threatened);
(4) A certificate of the Secretary of Borrower, dated as of
the date of this Restated Credit Agreement, certifying the incumbency,
signatures and authority of the officers of Borrower authorized to
execute, deliver and perform this Restated Credit Agreement and the
other applicable Credit Documents on behalf of Borrower; and
B. SUBSIDIARY CORPORATE DOCUMENTS.
(1) The Articles of Incorporation of each Subsidiary of
Borrower, certified as of a recent date prior to the Effective Date by
the Secretary of State (or comparable public official) of such
Subsidiary's jurisdiction of incorporation or organization;
(2) A Certificate of Good Standing (or comparable certificate)
for each Subsidiary of Borrower, certified as of a recent date prior to
the Effective Date by the Secretary of State (or comparable public
official) of such Subsidiary's jurisdiction of incorporation or
organization;
(3) A certificate of the Secretary of each Subsidiary of
Borrower, dated as of the date of this Restated Credit Agreement,
certifying (a) that the Articles of Incorporation of such Subsidiary,
in the form certified by the Secretary of State (or comparable public
official) of the Subsidiaries jurisdiction of incorporation, is in full
force and effect and has not been amended, supplemented, revoked or
repealed since the date of such certification; (b) that attached
thereto is a true and correct copy of the Bylaws of such Subsidiary as
in effect on the Effective Date; (c) that attached thereto are true and
correct copies of resolutions duly adopted by the Board of Directors of
such Subsidiary and continuing in effect, which authorize the
execution, delivery and performance by such Subsidiary of the Credit
Documents executed or to be executed by Subsidiary and the consummation
of the transactions contemplated thereby; and (d) that there are no
proceedings for the dissolution or liquidation of such Subsidiary
(commenced or threatened);
(4) A certificate of the Secretary of each Subsidiary, dated
as of the date of this Restated Credit Agreement, certifying the
incumbency, signatures and authority of the officers of such Subsidiary
authorized to execute, deliver and perform the applicable Credit
Documents on behalf of such Subsidiary; and
3.01(e)-2
77
C. SECURITY DOCUMENTS.
(1) All Uniform Commercial Code financing statements
(including amendments, assignments and fixture filings) and other
documents, instruments and agreements reasonably requested by Agent to
perfect the security interests, liens and assignments granted to Agent
by Borrower in connection herewith, appropriately completed and duly
executed by the appropriate parties;
(2) Uniform Commercial Code search certificates evidencing the
filing of the financing statements necessary to perfect the security
interests granted to Agent by Borrower and its Subsidiaries pursuant to
the Credit Documents;
(3)Search certificates or similar documentation evidencing the
filing of the financing statements (or assignments thereof) necessary
to perfect the security interests granted to Agent by Xxxx Canada and
Xxxx-Tenex pursuant to the Credit Documents will be prior to the
financing statements of all other Persons;
(4) The certificates representing the stock pledged to Agent
pursuant to the Restated Borrower Pledge Agreement and the Restated
Xxxx Canada Pledge Agreement together with blank stock powers for each
such certificate duly executed by Borrower.
(4) Such other documents, instruments and agreements as Agent
may reasonably request to establish and perfect the Liens granted to
Agent or any Lender in this Agreement, the Security Documents and the
other Credit Documents.
F. OPINIONS.
A written opinion of Xxxxxxxxxx & Xxxxx, outside counsel to
Borrower, dated as of the Effective Date and addressed to Agent and
each Lender, covering such legal matters as Agent may reasonably
request and otherwise in form and substance satisfactory to Agent.
G. OTHER ITEMS.
(1) A certificate of the President, a Vice President or Chief
Financial Officer of Borrower, addressed to Agent and the Lenders and
dated as of the Effective Date, certifying that:
(a) The representations and warranties set forth in
Paragraph 4.01 are true and correct as of such date;
(b) No Event of Default or Default has occurred and
is continuing as of such date; and
(c) Each of the Credit Documents required to be
delivered to Agent or any Lender on or prior to the Effective
Date is in full force and effect as of such date;
3.01(e)-3
78
(2) Certificates of insurance in forms acceptable to Agent,
naming Agent as additional insured or as loss payee;
(3) All fees payable to Agent and the Lenders on or prior to
the Effective Date;
(4) All fees and expenses of Agent's counsel through the
Effective Date;
(5) A true and correct copy of the RSA Securities Purchase
Agreement dated as of July 6, 2000 by and between Borrower and The
Retirement Systems of Alabama and a true and correct copy of the
Agreement for the sale and purchase of the whole of the issued share
capital of Ideal Hardware Limited by and among InterX Plc, Interx Media
Plc and the Borrower; and
(6) Such other evidence as any Lender may reasonably request
to establish the accuracy and completeness of the representations and
warranties and the compliance with the terms and conditions contained
in this Restated Credit Agreement and the other Credit Documents.
3.01(e)-4
79
SCHEDULE 3.01(b)
CONDITION SUBSEQUENT
(1) A written opinion of Xxxxxxx XxXxxxxx Stirling Scales,
outside counsel to Xxxx-Tenex, addressed to Agent and each Lender,
covering such legal matters as Agent may reasonably request and
otherwise in form and substance satisfactory to Agent.
3.01(e)-1
80
SCHEDULE 4.01(g)
MATERIAL LITIGATION
During 1999, Xxxx Microproducts filed suit against American Credit
Indemnity ("ACI"), its former credit insurer, for recovery of amounts due under
claim made by Xxxx Microproducts. ACI has counter-sued for rescission of the
credit insurance contract for repayment of claims previously paid. Management
has reviewed and investigated the claims, and while no assurance can be given
regarding the outcome of this matter, management believes that the final outcome
of the matter will not have a material impact on consolidated financial position
or results of operations. However, because of the nature and inherent
uncertainties of litigation, should the outcome of this matter be unfavorable,
Xxxx Microproducts may be required to pay damages and other expenses, which
could have a material adverse effect on its financial position and results of
operations.
Xxxx Microproducts is a third party defendant in a lawsuit filed in
Arizona superior court in connection with the sale of approximately $1.8 million
of allegedly defective computer hard drives. The plaintiff in the lawsuit,
Interactive Flight Technologies ("IFT"), now known as Global Technologies LTD.,
seeks to recover the cost of the hard drives and certain consequential damages
from Avnet, Inc., which sold the drives to IFT. Avnet has filed a cross claim
for contractual indemnity from Simple Technologies, Inc. ("Simple"), which was
Avnet's supplier. Simple alleges that it purchased some of the drives from Xxxx
Microproducts and seeks indemnity. In a recent pre-trial order, the court ruled
in favor of Xxxx Microproducts and effectively eliminated much of Simple's
claim. Xxxx Microproducts expects to prevail at trial. The case could result in
an appeal.
Xxxx Microproducts is a defendant in a lawsuit by a former employee
named Xxxxxx XxXxxx. XxXxxx alleges he is owed additional severance pay.
XxXxxx'x original offer letter contained a termination clause involving
severance pay for termination occurring within one year. XxXxxx changed the one
year to two years on his own without any authorization and sent back the offer
letter which was then filed in his personnel file. Xxxx terminated XxXxxx after
15 months and paid a standard severance. After XxXxxx termination, he raised the
change in the letter.
Xxxx Microproducts is a defendant in a lawsuit by a former employee
named Xxxxxx Xxxxx for wrongful termination and pregnancy discrimination. Xxxx
eliminated Sorby's position in January 2000 and offered her a new position.
Sorby felt as though the new position was a demotion and found the position
unacceptable. After many email conversations between Sorby, her supervisor, and
Xxxx'x human resources department, Xxxx voluntarily terminated Sorby for not
accepting her new assignment. Sorby was pregnant at the time of her termination.
Xxxx has a records which document a presentation given to Xxxx'x management
concerning the elimination of Sorby's position prior to Sorby's notification to
the Company of her pregnancy.
4.01(g)-1
81
SCHEDULE 4.01(q)
SUBSIDIARIES
Jurisdiction Classes
of of Outstanding Percent
Name Incorporation Stock Shares Owned
---- ------------- -------- ---------------- ---------
Xxxx Microproducts Canada, Inc. California Common 100 100%
Xxxx Microproducts-Future Tech, Inc. California Common 1,000 100%
Xxxxx Data Europe B.V. Netherlands Common 400 100%
(un-certificated)
Xxxxx Data, Inc. Minnesota Common 100 100%
Xxxx Microproducts Canada - Tenex Nova Scotia, Common 101 100%
Data ULC Canada
Xxxxx Data Europe Realty B.V. Netherlands Common 455 100%
(un-certificated)
Xxxxx Data Italy s.r.l. Italy Common No shares; only 90% - Xxxxx
capital Data Europe
Holding B.V.
10% - Xxxx
Microproducts
Inc.
Xxxxx Data Asset Management Co., Inc. Minnesota Common 1,000 1,000
Ideal Hardware Limited United Kingdom Common 1,000,000 100%
4.01(q)-1
82
EXHIBIT D
REVOLVING LOAN NOTE
$______________ ____________________, California
October ____, 2000
FOR VALUE RECEIVED, XXXX MICROPRODUCTS INC., a California corporation
("Borrower"), hereby promises to pay to the order of ____________________, a
____________________ ("Lender"), the principal sum of
______________________________ DOLLARS ($__________) or such lesser amount as
shall equal the aggregate outstanding principal balance of the Revolving Loans
made by Lender to Borrower pursuant to the Restated Credit Agreement referred to
below (as amended from time to time, the "Restated Credit Agreement"), on or
before the Revolving Loan Maturity Date specified in the Restated Credit
Agreement; and to pay interest on said sum, or such lesser amount, at the rates
and on the dates provided in the Restated Credit Agreement.
Borrower shall make all payments hereunder, for the account of Lender's
Applicable Lending Office, to Agent as indicated in the Restated Credit
Agreement, in lawful money of the United States and in same day or immediately
available funds.
Borrower hereby authorizes Lender to record on the schedule(s) annexed
to this note the date and amount of each Revolving Loan and of each payment or
prepayment of principal made by Borrower and agrees that all such notations
shall constitute prima facie evidence of the matters noted, provided that any
failure by Lender to so record shall not affect the obligations of Borrower
hereunder or under the Restated Credit Agreement.
This note is one of the Revolving Loan Notes referred to in the Fourth
Amended and Restated Credit Agreement, dated as of October [___], 2000, among,
inter alia, Borrower, Lender, the other financial institutions from time to time
parties thereto (collectively, the "Lenders") and California Bank & Trust acting
as Agent for the Lenders. This note is subject to the terms of the Restated
Credit Agreement, including the rights of prepayment and the rights of
acceleration of maturity. Terms used herein have the meanings assigned to those
terms in the Restated Credit Agreement, unless otherwise defined herein.
The transfer, sale or assignment of any rights under or interest in
this note is subject to certain restrictions contained in the Restated Credit
Agreement, including Paragraph 8.05 thereof.
83
Borrower shall pay all reasonable fees and expenses, including
reasonable attorneys' fees, incurred by Lender in the enforcement or attempt to
enforce any of Borrower's obligations hereunder not performed when due. Borrower
hereby waives notice of presentment, demand, protest or notice of any other
kind. This note shall be governed by and construed in accordance with the laws
of the State of California.
XXXX MICROPRODUCTS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
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84
LOANS AND PAYMENTS OF PRINCIPAL
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Amount of Unpaid
Interest Principal Paid Principal Notation
Date Type of Loan Amount of Loan Period or Prepaid Balance Made By
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D-3
85
EXHIBIT E
FOURTH AMENDED AND RESTATED SECURITY AGREEMENT
THIS FOURTH AMENDED AND RESTATED SECURITY AGREEMENT, dated as of
October [____], 2000, is executed by XXXX MICROPRODUCTS INC., a California
corporation ("Borrower"), in favor of Agent for the financial institutions which
are from time to time parties to the Restated Credit Agreement defined in
Recital B below (collectively, the "Lenders").
RECITALS
A. Pursuant to a Third Amended and Restated Credit Agreement dated as
of November 12, 1998 (as amended to the date hereof, the "Existing Credit
Agreement") among Borrower, the Lenders, California Bank & Trust, a California
banking association, as Agent ("Agent"), the Lenders agreed to provide to
Borrower a certain credit facility. The availability of the credit facility
under the Existing Credit Agreement was subject, among other conditions, to the
execution and delivery by Borrower of a Third Amended and Restated Security
Agreement dated as of November 12, 1998 (as amended to the date hereof, the
"Existing Security Agreement").
B. Borrower has requested the Lenders to amend the Existing Credit
Agreement to make certain changes. Pursuant to a Fourth Amended and Restated
Credit Agreement, dated as of October [____], 2000 (the "Restated Credit
Agreement"), among, inter alia, Borrower, the Lenders and Agent, the Lenders
have agreed so to amend the Existing Credit Agreement upon the terms and subject
to the conditions set forth in the Restated Credit Agreement including, without
limitation, the execution and delivery by Borrower of this Fourth Amended and
Restated Security Agreement (this "Restated Security Agreement") which amends
and, for convenience of reference, restates the Existing Security Agreement as
so amended in its entirety.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower hereby agrees with Agent, for the ratable benefit of the
Lenders and the Agent, that the Existing Security Agreement shall be amended and
restated to read in its entirety as follows:
1. DEFINITIONS AND INTERPRETATION. When used in this Restated Security
Agreement, the following terms shall have the following respective meanings:
"Account Debtor" shall have the meaning given to that term in
subparagraph 3(g) hereof.
"Agent" shall have the meaning given to that term in Recital A
hereof.
"Lenders" shall have the meaning given to that term in the
introductory paragraph hereof.
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"Xxxxxxxx" shall have the meaning given to that term in the
introductory paragraph hereof.
"Collateral" shall have the meaning given to that term in
paragraph 2 hereof.
"Depositary Bank" shall have the meaning given to that term in
subparagraph 4(e) hereof.
"Equipment" shall have the meaning given to that term in
Attachment 1 hereto.
"Excluded Collateral" shall mean Collateral consisting of
Equipment, Inventory or other goods located at an address not specified
in item 8 of Attachment 2 hereto and having a value not to exceed
$10,000 in the aggregate for each such unspecified location or $100,000
in the aggregate for all such unspecified locations.
"Existing Credit Agreement" shall have the meaning given to
that term in Recital A hereof.
"Existing Security Agreement" shall have the meaning given to
that term in Recital A hereof.
"Intermediary" shall have the meaning given to that term in
Subparagraph 4(f) hereof.
"Inventory" shall have the meaning given to that term in
Attachment 1 hereto.
"Obligations" shall mean and include all loans, advances,
debts, liabilities and obligations, howsoever arising, owed by Borrower
to any Lender or the Agent of every kind and description (whether or
not evidenced by any note or instrument and whether or not for the
payment of money), direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising pursuant to the terms
of the Restated Credit Agreement or any of the other Credit Documents,
including without limitation all interest, fees, charges, expenses,
attorneys' fees and accountants' fees chargeable to Borrower or payable
by Borrower thereunder.
"Receivables" shall have the meaning given to that term in
Attachment 1 hereto.
"Related Contracts" shall have the meaning given to that term
in Attachment 1 hereto.
"Restated Credit Agreement" shall have the meaning given to
that term in Recital B hereof as further amended, modified,
supplemented or replaced from time to time.
"Restated Security Agreement" shall have the meaning given to
that term in Recital B hereof as further amended, modified,
supplemented or replaced from time to time.
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"UCC" shall mean the Uniform Commercial Code as in effect in
the State of California from time to time.
Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Restated Credit Agreement shall have the respective meanings
given to those terms in the Restated Credit Agreement, and all terms defined in
the UCC shall have the respective meanings given to those terms in the UCC. The
rules of construction set forth in Section I of the Restated Credit Agreement
shall, to the extent not inconsistent with the terms of this Restated Security
Agreement, apply to this Restated Security Agreement and are hereby incorporated
by reference.
2. GRANT OF SECURITY INTEREST. As security for the Obligations,
Borrower hereby pledges and assigns to Agent (for the ratable benefit of the
Lenders and the Agent) and grants to Agent (for the ratable benefit of the
Lenders and the Agent) a security interest in all right, title and interest of
Borrower in and to the property described in Attachment 1 hereto, whether now
owned or hereafter acquired (collectively and severally, the "Collateral"),
which Attachment 1 is incorporated herein by this reference.
3. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
the Lenders and the Agent as follows:
(a) Borrower is the legal and beneficial owner of the
Collateral (or, in the case of after-acquired Collateral, at the time
Borrower acquires rights in the Collateral, will be the legal and
beneficial owner thereof). No other Person has (or, in the case of
after-acquired Collateral, at the time Borrower acquires rights
therein, will have) any right, title, claim or interest (by way of
Lien, purchase option or otherwise) in, against or to the Collateral,
other than Permitted Liens.
(b) Agent has (or in the case of after-acquired Collateral, at
the time Borrower acquires rights therein, will have) a first priority
perfected security interest in the Collateral.
(c) All Equipment and Inventory (except for Excluded
Collateral) are (i) located at the locations indicated in item 8 of
Attachment 2 hereto, (ii) in transit to such locations or (iii) in
transit to a third party purchaser which will become obligated on a
Receivable to Borrower upon receipt. Except for Equipment and Inventory
referred to in clauses (ii) and (iii) of the preceding sentence,
Borrower has exclusive possession and control of the Inventory and
Equipment.
(d) All Inventory has been (or, in the case of hereafter
produced Inventory, will be) produced in compliance with all applicable
Governmental Rules, including the Fair Labor Standards Act (if
applicable).
(e) Borrower keeps all records concerning the Receivables and
the originals of all Related Contracts at its chief executive office
located at the address set forth in item 2 of Attachment 2 hereto.
(f) Borrower has delivered to Agent, together with all
necessary stock powers, endorsements, assignments and other necessary
instruments of transfer, the original of
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each Receivable which is an instrument or chattel paper having a face
value in excess of $100,000 and the originals of all certificated
securities owed directly by Borrower.
(g) Each Receivable is genuine and enforceable against the
party obligated to pay the same (an "Account Debtor") free from any
right of rescission, defense, setoff or discount.
(h) Each insurance policy maintained by Borrower is validly
existing and is in full force and effect. Borrower is not in default in
any material respect under the provisions of any insurance policy, and
there are no facts which, with the giving of notice or passage of time
(or both), would result in such a default under any provision of any
such insurance policy.
4. COVENANTS. Borrower hereby agrees as follows:
(a) Borrower, at Borrower's expense, shall promptly procure,
execute and deliver to Agent all documents, instruments and agreements
and perform all acts which are necessary or desirable, or which Agent
may reasonably request, to establish, maintain, preserve, protect and
perfect the Collateral, the Lien granted to Agent therein and the first
priority of such Lien or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the preceding sentence, Borrower shall (i)
procure, execute and deliver to Agent all stock powers, endorsements,
assignments, financing statements and other instruments of transfer
requested by Agent, (ii) deliver to Agent promptly upon receipt the
original of all Collateral which is an instrument, document or chattel
paper having a face value in excess of $100,000 and letters of credit
and certificated securities and (iii) take such actions as may be
necessary to perfect the Lien of Agent in any Collateral consisting of
investment property (including taking the actions required by
Subparagraph 4(f) hereof and, in those jurisdictions where appropriate,
causing such Liens to be recorded or registered in the books of any
financial intermediary or clearing corporation requested by Agent).
(b) Borrower shall not use or permit any Collateral to be used
in violation of (i) any provision of the Restated Credit Agreement,
this Restated Security Agreement or any other Credit Document, (ii) any
applicable Governmental Rule where such use might have a Material
Adverse Effect, or (iii) any policy of insurance covering the
Collateral.
(c) Borrower shall pay promptly when due all taxes and other
Governmental Charges, all Liens and all other charges now or hereafter
imposed upon, relating to or affecting any Collateral, except such
Governmental Charges, Liens and other charges as may in good faith be
contested or disputed by appropriate proceedings, provided that in each
such case appropriate reserves are maintained in accordance with GAAP.
(d) Without ninety (90) days' prior written notice to Agent,
Borrower shall not (i) change Borrower's name or place of business (or,
if Borrower has more than one place of business, its chief executive
office), or the office in which Borrower's records relating to
Receivables or the originals of Related Contracts are kept, (ii) keep
Collateral consisting
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of chattel paper and documents at any location other than its chief
executive office set forth in item 2 of Attachment 2 hereto, or (iii)
keep Collateral consisting of Equipment, Inventory or other goods
(except for Excluded Collateral) at any location other than the
locations set forth in item 8 of Attachment 2 hereto.
(e) For each deposit account maintained by Borrower, Borrower
shall (i) execute and deliver to the bank or other depository
institution at which such deposit account is maintained (the
"Depositary Bank") a Notice of Security Interest in the form of
Attachment 3 hereto (or in any other form acceptable to Agent in its
sole discretion) and (ii) use its best efforts to cause the Depositary
Bank to execute and deliver to Agent an Acknowledgment and Agreement in
the form set forth in such Notice of Security Interest. Without ten
(10) days prior written notice to Agent, Borrower shall not establish
any deposit account not set forth in item 16 of Attachment 2 hereto.
(f) For each securities account and commodity account
maintained by Borrower, Borrower shall (i) complete, execute and
deliver to the Lender, broker or other Person at which such account is
maintained (the "Intermediary") a Notice of Security Interest in the
form of Attachment 4 hereto and (ii) use its best efforts to cause the
Intermediary to execute and deliver to Agent an Acknowledgment and
Agreement in the form set forth in such Notice of Security Interest (or
in any other form acceptable to Agent in its sole discretion). Without
thirty (30) days prior written notice to Agent, Borrower shall not
establish any securities account or commodity account not set forth in
item 14 of Attachment 2 hereto.
(g) Borrower shall deposit, or cause to be deposited, all
remittances, checks and other funds (in whatever form) received with
respect to Receivables to a deposit account for which Borrower has
complied with subparagraph 4(e) above and in which Agent has a first
priority perfected security interest, subject only to the banker's lien
of the Depositary Bank covering its customary account maintenance
charges and fees.
(h) Borrower shall appear in and defend any action or
proceeding which may affect its title to or Agent's interest in the
Collateral.
(i) If Agent gives value to enable Borrower to acquire rights
in or the use of any Collateral, Borrower shall use such value for such
purpose.
(j) Borrower shall keep separate, accurate and complete
records of the Collateral and shall provide Agent with such records and
such other reports and information relating to the Collateral as Agent
may reasonably request from time to time.
(k) Borrower shall not surrender or lose possession of (other
than to Agent), sell, encumber, lease, rent, option, or otherwise
dispose of or transfer any Collateral or right or interest therein
except as permitted in the Restated Credit Agreement, and,
notwithstanding any provision of the Restated Credit Agreement,
Borrower shall keep the Collateral free of all Liens except Permitted
Liens.
(l) Borrower shall type, print or stamp conspicuously on the
face of all original copies of all Collateral consisting of chattel
paper and documents not in the possession of
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Xxxxx a legend satisfactory to Agent indicating that such chattel paper
is subject to the security interest granted hereby.
(m) Borrower shall collect, enforce and receive delivery of
the Receivables in accordance with past practice unless otherwise
notified by Agent after the occurrence and during the continuance of an
Event of Default.
(n) Borrower shall comply with all material Requirements of
Law applicable to Borrower which relate to the production, possession,
operation, maintenance and control of the Collateral (including,
without limitation, the Fair Labor Standards Act).
(o) Borrower shall (i) maintain and keep in force insurance of
the types and in amounts customarily carried from time to time during
the term of this Restated Security Agreement in its lines of business,
including fire, public liability, property damage and worker's
compensation, such insurance to be carried with companies and in
amounts satisfactory to Agent, (ii) deliver to Agent from time to time,
as Agent may request, schedules setting forth all insurance then in
effect, and (iii) deliver to Agent copies of each policy of insurance
which replaces, or evidences the renewal of, each existing policy of
insurance at least fifteen (15) days prior to the expiration of such
policy. Agent shall be named as additional insured or additional loss
payee, as appropriate, on all liability and property insurance of
Borrower and such policies shall contain such additional endorsements
as shall be required by Agent, including the endorsements specified in
Attachment 5 hereto. Prior to the occurrence and the continuance of an
Event of Default, all proceeds of any property insurance paid as a
result of any event or occurrence shall be paid to Borrower. All
proceeds of any property insurance paid after the occurrence and during
the continuance of an Event of Default shall be paid to Agent to be
held as Collateral and applied as provided in the Restated Credit
Agreement or, at the election of the Required Lenders, returned to
Borrower.
5. AUTHORIZED ACTION BY AGENT. Borrower hereby irrevocably appoints
Agent as its attorney-in-fact and agrees that Agent may perform (but Agent shall
not be obligated to and shall incur no liability to Borrower or any third party
for failure so to do) any act which Borrower is obligated by this Restated
Security Agreement to perform, and to exercise such rights and powers as
Borrower might exercise with respect to the Collateral, including, without
limitation, the right to (a) collect by legal proceedings or otherwise and
endorse, receive and receipt for all dividends, interest, payments, proceeds and
other sums and property now or hereafter payable on or on account of the
Collateral; (b) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for the Collateral; (c) insure,
process, preserve and enforce the Collateral; (d) make any compromise or
settlement, and take any action it deems advisable, with respect to the
Collateral; (e) pay any Indebtedness of Borrower relating to the Collateral; and
(f) execute UCC financing statements and other documents, instruments and
agreements required hereunder; provided, however, that Agent may exercise such
powers only after the occurrence and during the continuance of an Event of
Default. Borrower agrees to reimburse Agent upon demand for all reasonable costs
and expenses, including attorneys' fees, Agent may incur while acting as
Borrower's attorney-in-fact hereunder, all of which costs and expenses are
included in the Obligations. Borrower agrees that such care as Agent gives to
the safekeeping of its own
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property of like kind shall constitute reasonable care of the Collateral when in
Agent's possession; provided, however, that Agent shall not be required to make
any presentment, demand or protest, or give any notice and need not take any
action to preserve any rights against any prior party or any other Person in
connection with the Obligations or with respect to the Collateral.
6. DEFAULT AND REMEDIES. Borrower shall be deemed in default under this
Restated Security Agreement upon the occurrence and during the continuance of an
Event of Default, as that term is defined in the Restated Credit Agreement. In
addition to all other rights and remedies granted to Agent by this Restated
Security Agreement, the Restated Credit Agreement, the other Credit Documents,
the UCC and other applicable Governmental Rules, Agent may, upon the occurrence
and during the continuance of any Event of Default, exercise any one or more of
the following rights and remedies: (a) collect, receive, appropriate or realize
upon the Collateral or otherwise foreclose or enforce Agent's security interests
in any or all Collateral in any manner permitted by applicable Governmental
Rules or in this Restated Security Agreement; (b) notify any or all Account
Debtors to make payments on Receivables directly to Agent; (c) direct any
Depositary Bank or Intermediary to liquidate the account(s) maintained by it,
pay all amounts payable in connection therewith to Agent and/or deliver any
proceeds thereof to Agent; (d) sell or otherwise dispose of any or all
Collateral at one or more public or private sales, whether or not such
Collateral is present at the place of sale, for cash or credit or future
delivery, on such terms and in such manner as Agent may determine; (e) require
Borrower to assemble the Collateral and make it available to Agent at a place to
be designated by Agent; (f) enter onto any property where any Collateral is
located and take possession thereof with or without judicial process; and (g)
prior to the disposition of the Collateral, store, process, repair or
recondition any Collateral consisting of goods, perform any obligations and
enforce any rights of Borrower under any Related Contracts or otherwise prepare
and preserve Collateral for disposition in any manner and to the extent Agent
deems appropriate. In furtherance of Agent's rights hereunder, Borrower hereby
grants to Agent an irrevocable, non-exclusive license (exercisable without
royalty or other payment by Agent) to use, license or sublicense any patent,
trademark, tradename, copyright or other intellectual property in which Borrower
now or hereafter has any right, title or interest, together with the right of
access to all media in which any of the foregoing may be recorded or stored. In
any case where notice of any sale or disposition of any Collateral is required,
Borrower hereby agrees that seven (7) days notice of such sale or disposition is
reasonable.
7. MISCELLANEOUS.
(a) Notices. Except as otherwise specified herein, all
notices, requests, demands, consents, instructions or other
communications to or upon Borrower or Agent under this Restated
Security Agreement shall be given as provided in Paragraph 8.01 of the
Restated Credit Agreement.
(b) Waivers; Amendments. Any term, covenant, agreement or
condition of this Restated Security Agreement may be amended or waived
only as provided in the Restated Credit Agreement. No failure or delay
by the Agent or any Lender in exercising
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any right hereunder shall operate as a waiver thereof or of any other
right nor shall any single or partial exercise of any such right
preclude any other further exercise thereof or of any other right.
Unless otherwise specified in any such waiver or consent, a waiver or
consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
(c) Successors and Assigns. This Restated Security Agreement
shall be binding upon and inure to the benefit of the Agent, the
Lenders and Borrower and their respective successors and assigns;
provided, however, that the Agent, the Lenders and Borrower may sell,
assign and delegate their respective rights and obligations hereunder
only as permitted by the Restated Credit Agreement. Agent may disclose
this Restated Security Agreement as provided in the Restated Credit
Agreement.
(d) Partial Invalidity. If at any time any provision of this
Restated Security Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law or any jurisdiction, neither
the legality, validity or enforceability of the remaining provisions of
this Restated Security Agreement nor the legality, validity or
enforceability of such provision under the law of any other
jurisdiction shall in any way be affected or impaired thereby.
(e) Cumulative Rights, Etc. The rights, powers and remedies of
the Agent and the Lenders under this Restated Security Agreement shall
be in addition to all rights, powers and remedies given to the Agent
and the Lenders by virtue of any applicable Governmental Rule, the
Restated Credit Agreement, any other Credit Document or any other
agreement, all of which rights, powers, and remedies shall be
cumulative and may be exercised successively or concurrently without
impairing Agent's rights hereunder. Borrower waives any right of
marshalling or to require the Agent or any Lender to proceed against
any Person or to exhaust any Collateral or to pursue any remedy in such
Agent's or such Lender's power.
(f) Payments Free of Taxes, Etc. All payments made by Borrower
under this Restated Security Agreement shall be made by Borrower free
and clear of and without deduction for any and all present and future
taxes, levies, charges, deductions and withholdings. In addition,
Borrower shall pay upon demand any stamp or other taxes, levies or
charges of any jurisdiction with respect to the execution, delivery,
registration, performance and enforcement of this Restated Security
Agreement. Upon request by Agent, Borrower shall furnish evidence
satisfactory to Agent that all requisite authorizations and approvals
by, and notices to and filings with, governmental authorities and
regulatory bodies have been obtained and made and that all requisite
taxes, levies and charges have been paid.
(g) Borrower's Continuing Liability. Notwithstanding any
provision of this Restated Security Agreement or any other Credit
Document or any exercise by Agent of any of its rights hereunder or
thereunder (including, without limitation, any right to collect or
enforce any Collateral), (i) Borrower shall remain liable to perform
its obligations and duties in connection with the Collateral
(including, without limitation, the Related Contracts and all other
agreements relating to the Collateral) and (ii) neither the
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Agent nor any Lender shall assume any liability to perform such
obligations and duties or to enforce any of Borrower's rights in
connection with the Collateral (including, without limitation, the
Related Contracts and all other agreements relating to the Collateral).
(h) Governing Law. This Restated Security Agreement shall be
governed by and construed in accordance with the laws of the State of
California without reference to conflicts of law rules (except to the
extent otherwise provided in the UCC).
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IN WITNESS WHEREOF, Borrower has caused this Restated Security
Agreement to be executed as of the day and year first above written.
XXXX MICROPRODUCTS INC.
By:
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Name:
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Title:
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