EXHIBIT 10.1
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$150,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
CompUSA Inc.
CERTAIN LENDERS
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER
December 30, 1996
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TABLE OF CONTENTS
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Page
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ARTICLE 1.
Definitions
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Section 1.1 Defined Terms................................................ 1
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Section 1.2 Amendments and Renewals...................................... 18
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Section 1.3 Construction................................................. 18
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ARTICLE 2.
Advances
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Section 2.1 The Advances................................................ 19
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Section 2.2 Manner of Borrowing and Disbursement........................ 19
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Section 2.3 Interest.................................................... 21
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Section 2.4 Fees........................................................ 22
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Section 2.5 Prepayment.................................................. 23
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Section 2.6 Reduction of Commitments.................................... 24
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Section 2.7 Non-Receipt of Funds by the Administrative Lender........... 24
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Section 2.8 Payment of Principal of Advances............................ 25
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Section 2.9 Reimbursement............................................... 25
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Section 2.10 Manner of Payment........................................... 26
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Section 2.11 LIBOR Lending Offices....................................... 26
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Section 2.12 Sharing of Payments......................................... 27
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Section 2.13 Calculation of LIBOR Rate................................... 27
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Section 2.14 Booking Loans............................................... 27
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Section 2.15 Taxes....................................................... 27
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Section 2.16 Letters of Credit........................................... 31
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Section 2.17 Extension of Maturity Date.................................. 37
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ARTICLE 3.
Conditions Precedent
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Section 3.1 Conditions Precedent to Closing, the Initial Advance and the
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Initial Letters of Credit................................... 37
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Section 3.2 Conditions Precedent to All Advances and Letters of Credit.. 39
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ARTICLE 4.
Representations and Warranties
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Section 4.1 Representations and Warranties.............................. 40
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Section 4.2 Survival of Representations and Warranties, etc............. 46
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ARTICLE 5.
General Covenants
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Section 5.1 Preservation of Existence and Similar Matters............... 47
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Section 5.2 Business; Compliance with Applicable Law.................... 47
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Section 5.3 Maintenance of Properties................................... 47
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Section 5.4 Accounting Methods and Financial Records.................... 47
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Section 5.5 Insurance................................................... 47
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Section 5.6 Payment of Taxes and Claims................................. 48
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Section 5.7 Visits and Inspections...................................... 48
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Section 5.8 Payment of Indebtedness..................................... 48
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Section 5.9 Use of Proceeds............................................. 48
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SECTION 5.10 INDEMNITY................................................... 49
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Section 5.11 Environmental Law Compliance................................ 50
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ARTICLE 6.
Information Covenants
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Section 6.1 Quarterly Financial Statements and Information.............. 51
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Section 6.2 Annual Financial Statements and Information; Certificate of
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No Default.................................................. 52
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Section 6.3 Compliance Certificate...................................... 52
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Section 6.4 Copies of Other Reports and Notices......................... 52
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Section 6.5 Notice of Litigation, Default and Other Matters............. 53
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Section 6.6 ERISA Reporting Requirements................................ 54
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ARTICLE 7.
Negative Covenants
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Section 7.1 Indebtedness................................................ 55
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Section 7.2 Liens....................................................... 56
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Section 7.3 Investments................................................. 56
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Section 7.4 Liquidation, Disposition or Acquisition of Assets, Merger,
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New Subsidiaries..............................................57
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Section 7.5 Guaranties.................................................. 57
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Section 7.6 Restricted Payments......................................... 57
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Section 7.7 Affiliate Transactions...................................... 58
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Section 7.8 Compliance with ERISA....................................... 58
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Section 7.9 Leverage Ratio.............................................. 58
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Section 7.10 Fixed Charge Coverage Ratio................................. 59
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Section 7.11 Tangible Net Worth.......................................... 59
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Section 7.12 Liquidity Ratio............................................. 59
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Section 7.13 Sale and Leaseback.......................................... 59
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Section 7.14 Sale or Discount of Receivables............................. 59
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Section 7.15 Amendment and Modification of Subordinated Debt Documents... 59
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Section 7.16 Acquisitions................................................ 59
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Section 7.17 Inventory Purchases......................................... 60
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ARTICLE 8.
Default
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Section 8.1 Events of Default.......................................... 60
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Section 8.2 Remedies................................................... 63
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ARTICLE 9.
Changes in Circumstances
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Section 9.1 LIBOR Basis Determination Inadequate........................ 64
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Section 9.2 Illegality.................................................. 64
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Section 9.3 Increased Costs............................................. 65
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Section 9.4 Effect On Base Rate Advances................................ 66
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Section 9.5 Capital Adequacy............................................ 66
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ARTICLE 10.
AGREEMENT AMONG LENDERS
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Section 10.1 Agreement Among Lenders..................................... 67
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Section 10.2 Lender Credit Decision...................................... 69
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Section 10.3 Benefits of Article......................................... 69
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ARTICLE 11.
Miscellaneous
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Section 11.1 Notices..................................................... 70
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Section 11.2 Expenses.................................................... 70
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Section 11.3 Waivers..................................................... 71
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Section 11.4 Determination by the Lenders Conclusive and Binding......... 72
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Section 11.5 Set-Off..................................................... 72
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Section 11.6 Assignment.................................................. 72
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Section 11.7 Counterparts................................................ 74
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Section 11.8 Severability................................................ 74
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Section 11.9 Interest and Charges........................................ 74
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Section 11.10 Headings.................................................... 75
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Section 11.11 Amendment and Waiver........................................ 75
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Section 11.12 Exception to Covenants...................................... 75
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Section 11.13 No Liability of Issuing Bank................................ 76
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Section 11.14 Confidentiality Agreement................................... 76
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SECTION 11.15 GOVERNING LAW............................................... 76
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SECTION 11.16 WAIVER OF JURY TRIAL........................................ 77
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SECTION 11.17 ENTIRE AGREEMENT............................................ 77
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Schedules and Exhibits
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Schedule 1: LIBOR Lending Offices
Schedule 2: Existing Liens
Schedule 3: Existing Litigation and Material Liabilities
Schedule 4: Subsidiaries
Schedule 5: Existing Investments
Schedule 6: Existing Indebtedness
Schedule 7: Consents and Approvals
Schedule 8: Qualification and Good Standing
Schedule 9: Authorization
Schedule 10: Existing Letters of Credit
Schedule 11: Investment Policy
Exhibit A: Promissory Note
Exhibit B: Subsidiary Guaranty
Exhibit C: Compliance Certificate
Exhibit D: Assignment Agreement
Exhibit E: Confidentiality Agreement
Exhibit F: Subordination Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
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THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is dated as
of December 30, 1996, among CompUSA Inc., a Delaware corporation ("Borrower"),
the Lenders from time to time party hereto, and NATIONSBANK OF TEXAS, N.A., a
national banking association, as administrative agent for the Lenders.
BACKGROUND
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The Borrower, certain of the Lenders, and NationsBank of Texas, N.A., as
Administrative Lender, are parties to that certain Credit Agreement, dated as of
June 16, 1995 (said Credit Agreement, as amended, modified or supplemented, the
"Existing Credit Agreement"; the Existing Credit Agreement being an amendment
and replacement of that certain Credit Agreement, dated as of December 8, 1992,
among the Borrower, the lenders party thereto, and NationsBank of Texas, N.A.,
as Administrative Lender). The Borrower has requested that the Lenders amend
and restate the Existing Credit Agreement by making a credit facility available
to the Borrower in the maximum principal amount of $150,000,000. The Lenders
have agreed to do so, subject to the terms and conditions set forth below.
In consideration of the mutual covenants and agreements contained herein,
and other good and valuable consideration hereby acknowledged, the parties
hereto agree that the Existing Credit Agreement is amended and restated in its
entirety as follows:
ARTICLE 1.
Definitions
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Section 1.1 Defined Terms. For purposes of this Agreement:
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"Accounts" has the meaning assigned to such term in the UCC.
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"Acquisition" means any transaction pursuant to which the Borrower or any
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of its Subsidiaries, (i) whether by means of a capital contribution or purchase
or other acquisition of stock or other securities or other equity participation
or interest, (A) acquires more than 50% of the equity interest in any Person
pursuant to a solicitation by the Borrower or such Subsidiary of tenders of
equity securities of such Person, or through one or more negotiated block,
market, private or other transactions, or a combination of any of the foregoing,
or (B) except as permitted by Section 7.3(b) hereof with respect to a newly-
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formed corporation and Section 7.4(b) hereof with respect to an existing
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Subsidiary of the Borrower, makes any corporation a Subsidiary of the Borrower
or such Subsidiary, or causes any corporation, other than a Subsidiary of the
Borrower or such Subsidiary, to be merged into the Borrower or such
Subsidiary (or agrees to be merged into any other corporation other than a
wholly-owned Subsidiary (excluding directors' qualifying shares) of the Borrower
or such Subsidiary), (ii) purchases in one transaction or a series of related
transactions at least 75% of the business or assets (excluding Inventory only
purchases) of any Person or at least 75% of the business or assets (excluding
Inventory only purchases) of any operating division of any Person, or (iii)
purchases an amount of the business or assets (excluding Inventory only
purchases) of any Person or of any operating division of any Person in one
transaction or a series of related transactions for Acquisition Consideration
equal to or greater than $50,000,000.
"Acquisition Consideration" means, with respect to any Acquisition, an
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amount equal to the sum of (a) Equity Consideration plus (b) Non-Equity
Consideration for such Acquisition.
"Administrative Lender" means NationsBank of Texas, N.A., a national
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banking association, as administrative agent for Lenders, or such successor
administrative agent appointed pursuant to Section 10.1(b) hereof.
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"Advance" means any amount advanced or deemed advanced by the Lenders to
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the Borrower pursuant to Article 2 hereof on the occasion of any borrowing,
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including without limitation any Refinancing Advance.
"Affiliate" means any Person that, directly or indirectly, through one or
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more Subsidiaries, Controls or is Controlled By or Under Common Control with,
the Borrower.
"Agreement" means this Credit Agreement.
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"Agreement Date" means the date of this Agreement.
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"Applicable Environmental Laws" means applicable laws pertaining to health
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or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended from time
to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended from time to time, "RCRA"), the Texas Water Code, and the Texas Solid
Waste Disposal Act.
"Applicable Law" means (a) in respect of any Person, all provisions of
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constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person and its properties, including,
without limiting the foregoing, all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party, and (b) in respect of contracts relating to interest or finance charges
that are made or performed in the State of Texas, "Applicable Law" shall mean
the laws of the United States of America, including without limitation 12 USC
(S)(S) 85 and 86, as amended from time to time, and any other statute of the
United States of America now or at any time hereafter prescribing
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the maximum rates of interest on loans and extensions of credit, and the laws of
the State of Texas, including, without limitation, Article 5069-1.04, Title 79,
Revised Civil Statutes of Texas, 1925, as amended ("Art. 1.04"), and any other
statute of the State of Texas now or at any time hereafter prescribing maximum
rates of interest on loans and extensions of credit; provided that the parties
hereto agree that the provisions of Chapter 15, Title 79, Revised Civil Statutes
of Texas, 1925, as amended, shall not apply to Advances, this Agreement, the
Notes or any other Loan Documents.
"Applicable Margin" means the following per annum percentages, applicable
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in the following situations:
LIBOR
Applicability Basis
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(a) The Fixed Charge Coverage Ratio is less than 2.25 to 1 1.000
(b) The Fixed Charge Coverage Ratio is greater than or equal to 0.875
2.25 to 1 but less than 3.00 to 1
(c) The Fixed Charge Coverage Ratio is greater than or equal to 0.750
3.00 to 1 but less than 3.75 to 1
(d) The Fixed Charge Coverage Ratio is greater than or equal to 0.625
3.75 to 1 but less than 4.50 to 1
(e) The Fixed Charge Coverage Ratio is greater than or equal to 0.500
4.50 to 1
The Applicable Margin payable by the Borrower on the Advances outstanding
hereunder shall be subject to reduction or increase, as applicable and as set
forth in the table above, on a quarterly basis according to the performance of
the Borrower as tested by using the Fixed Charge Coverage Ratio as of the end of
the most recent Fiscal Quarter (calculated for the twelve Fiscal Periods
preceding the date of determination); provided, that each adjustment in the
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Applicable Margin shall be effective with respect to Advances (i) made following
receipt by the Lenders of the financial statements required pursuant to Section
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6.1 or 6.2, as applicable, hereof and the Compliance Certificate required
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pursuant to Section 6.3 hereof, on the date of making of such Advance and (ii)
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outstanding on the date of receipt of the financial statements referred to in
clause (i) immediately preceding, on the date of receipt of such financial
statements. If such financial statements and Compliance Certificate are not
received by the Lenders by the date required, the Applicable Margin shall be
determined as if the Fixed Charge Coverage Ratio is less than 2.25 to 1 until
such time as such financial statements and Compliance Certificate are received.
Notwithstanding the above, until such time as the Lenders have received the
financial statements required for the second Fiscal Quarter of the Borrower's
1997 Fiscal Year and related Compliance Certificate, the Applicable Margin shall
be determined as if the Fixed Charge Coverage Ratio is greater than or equal to
3.00 to 1 but less than 3.75 to 1.
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"Art. 1.04" has the meaning ascribed thereto in the definition of
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"Applicable Law."
"Assignees" means any assignee of a Lender pursuant to an Assignment
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Agreement and has the meaning ascribed thereto in Section 11.6 hereof.
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"Assignment Agreement" has the meaning ascribed thereto in Section 11.6
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hereof.
"Authorized Signatory" means the Chief Executive Officer, Vice President-
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Finance or Chief Financial Officer of the Borrower or such other senior
personnel of the Borrower as may be duly authorized and designated in writing by
the Borrower to execute documents, agreements and instruments on behalf of the
Borrower, and to request Advances hereunder.
"Base Rate Advance" means any Advance bearing interest at the Prime Rate
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Basis.
"Borrower" means CompUSA Inc., a Delaware corporation.
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"Business Day" means a day on which banks are open (a) for the transaction
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of business in Dallas, Texas and, (b) with respect to any LIBOR Advance, for the
transaction of international business (including dealings in U.S. Dollar
deposits) in London, England.
"Capitalized Lease Obligations" means that portion of any obligation of the
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Borrower or any Subsidiary as lessee under a lease which at the time would be
required to be capitalized on a balance sheet prepared in accordance with GAAP.
"Cash and Cash Equivalents" means with respect to the Borrower and each
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Subsidiary (a) cash (which after the occurrence of an Event of Default shall
exclude any cash proceeds of Accounts), and (b) Permitted Investments.
"Change of Control" means the occurrence of any of the following: (a) the
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sale, lease or transfer of all or substantially all of the Borrower's assets to
any Person or group (as such term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) other than a Subsidiary that executed a
Subsidiary Guaranty, (b) the adoption of a plan relating to the liquidation or
dissolution of the Borrower, (c) the acquisition by any Person or group (as such
term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) of a direct or indirect majority in interest (more than 50%) of the
voting power of the voting stock of the Borrower by way of merger or
consolidation or otherwise, or (d) the first day on which a majority of the
members of the Board of Directors are not Continuing Directors.
"COBRA" has the meaning specified in Section 4.1(l) hereof.
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Commercial Letter of Credit" means a commercial documentary Letter of
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Credit under which the Issuing Bank agrees to make payments for the account of
the Borrower, on behalf of
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the Borrower or a Subsidiary thereof, in respect of the obligation of the
Borrower or such Subsidiary in connection with the purchase of goods or services
in the ordinary course of business.
"Commitment" means $150,000,000, as reduced from time to time pursuant to
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Section 2.6 hereof.
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"Commitment Fee" has the meaning specified in Section 2.4(a) hereof.
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"Compliance Certificate" means a certificate, signed by an Authorized
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Signatory, in substantially the form of Exhibit C hereto, appropriately
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completed.
"Confidentiality Agreement" means the Confidentiality Agreement,
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substantially in the form of Exhibit E hereto, executed by the Borrower and each
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Lender.
"Continuing Directors" means, as of any date of determination, any member
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of the Board of Directors of the Borrower who (a) was a member of such Board of
Directors on the Agreement Date or (b) was nominated for election or elected to
such Board of Directors with the affirmative vote of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Control" or "Controlled By" or "Under Common Control" means possession,
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directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise); provided, however, that in any event any Person which beneficially
owns, directly or indirectly, 20% or more (in number of votes) of the securities
or equity interests having ordinary voting power for the election of directors
or other governing body of a Person shall be conclusively presumed to control
such Person.
"Controlled Group" means as of the applicable date, as to any Person not an
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individual, all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) which are under common control with
such Person and which, together with such Person, are treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code; provided, however,
that the Subsidiaries of the Borrower shall be deemed to be members of the
Borrower's Controlled Group.
"Debt for Borrowed Money" means all indebtedness, direct or indirect,
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whether or not represented by bonds, debentures, notes or other securities, for
the repayment of money borrowed or the deferred purchase price of property or
services, and shall include, without duplication, Securitization Indebtedness.
Debt for Borrowed Money does not include, without limitation, (a) accounts
payable or accrued expenses incurred in the ordinary course of business,
including advances from customers and trade payables financed through floor plan
arrangements, (b) current or deferred income taxes, and (c) provided that any
applicable Subsidiary has executed the Subordination Agreement, (i) Indebtedness
owed by a Subsidiary to the Borrower,
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(ii) Indebtedness owed by the Borrower to a Subsidiary, and (iii) Indebtedness
owed by a Subsidiary to another Subsidiary.
"Debtor Relief Laws" means any applicable liquidation, conservatorship,
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bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the rights of creditors generally from time to time
in effect.
"Default" means an Event of Default and/or any of the events specified in
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Section 8.1 hereof, regardless of whether there shall have occurred any passage
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of time or giving of notice that would be necessary in order to constitute such
event an Event of Default.
"Default Rate" means a simple per annum interest rate equal to (a) with
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respect to Base Rate Advances the lesser of (i) the Highest Lawful Rate or (ii)
the Prime Rate plus three percent or (b) with respect to LIBOR Advances, the
lesser of (i) the Highest Lawful Rate or (ii) the LIBOR Basis plus three
percent.
"Determining Lenders" means, on any date of determination, any combination
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of the Lenders having at least 51% of the aggregate amount of the Advances then
outstanding; provided, however, that if there are no Advances outstanding
hereunder, "Determining Lenders" shall mean any combination of Lenders whose
Specified Percentages aggregate at least 51%.
"Dividend" means, as to any Person, any declaration or payment of any
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dividend (other than a stock dividend) on, or the making of any distribution,
loan, advance or investment to or in any holder of, any shares of capital stock
of such Person (other than salaries and bonuses paid in the ordinary course of
business).
"Dollar" or "$" means the lawful currency of the United States of America.
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"EBIT" means, for any period, determined in accordance with GAAP on a
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consolidated basis for the Borrower and its Subsidiaries, the sum of (a) Pretax
Net Income (excluding therefrom, to the extent included in determining Pretax
Net Income, any items of extraordinary gain, including net gains on the sale of
assets other than asset sales in the ordinary course of business, and adding
thereto, to the extent included in determining Pretax Net Income, any items of
extraordinary loss, including net losses on the sale of assets other than asset
sales in the ordinary course of business), plus (b) interest expense minus
interest income.
"EBITDAR" means, for any period, determined in accordance with GAAP on a
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consolidated basis for the Borrower and its Subsidiaries, the sum of (a) EBIT,
plus (b) depreciation and amortization, plus (c) lease expense pursuant to
Operating Leases.
"Equity Consideration" means consideration given by the Borrower or any of
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its Subsidiaries for an Acquisition in the form of capital stock or other equity
securities.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time, and any regulation promulgated thereunder.
"ERISA Event" means, with respect to the Borrower and its Subsidiaries, (a)
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a Reportable Event (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under regulations issued under Section 4043 of
ERISA), (b) the withdrawal of any such Person or any member of its Controlled
Group from a Plan subject to Title IV of ERISA during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate under Section 4041(c) of ERISA, (d)
the institution of proceedings to terminate a Plan by the PBGC, (e) the failure
to make required contributions which could result in the imposition of a lien
under Section 412 of the Code or Section 302 of ERISA, or (f) any other event or
condition which might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan or the imposition of any liability under Title IV of ERISA
other than PBGC premiums due but not delinquent under Section 4007 of ERISA.
"Event of Default" means any of the events specified in Section 8.1 hereof,
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provided that any requirement for notice or lapse of time has been satisfied.
"Existing Credit Agreement" has the meaning set forth in the Background
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provision of this Agreement.
"Existing Letters of Credit" means those Letters of Credit outstanding on
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the Agreement Date, as described on Schedule 10 hereto.
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"Federal Funds Rate" means, for any day, the rate per annum (rounded
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upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to the
Administrative Lender on such day on such transactions as determined by
Administrative Lender.
"Fee Letter" has the meaning specified in Section 2.4(c) hereof.
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"Fiscal Period" means one of the three fiscal periods in a Fiscal Quarter,
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the first period comprised of five weeks and the second and third Fiscal Periods
comprised of four weeks, with each of the weeks in a Fiscal Quarter ending on
the close of business on a Saturday. There are twelve Fiscal Periods in a
Fiscal Year.
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"Fiscal Quarter" means a thirteen week quarter with the first thirteen week
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quarter beginning on the Sunday following the last Saturday in June and ending
on the Saturday of the thirteenth week in such quarter.
"Fiscal Year" means the fiscal year beginning on the Sunday following the
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last Saturday in June of each year and ending on the last Saturday in June of
the following year.
"Fixed Charges" means, for any date of calculation, calculated for the
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Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP,
the sum of, without duplication, (a) interest expense (including interest
expense pursuant to Capitalized Lease Obligations), plus (b) lease expense under
Operating Leases, in each case for the applicable period immediately preceding
the date of calculation.
"Fixed Charge Coverage Ratio" means the ratio of EBITDAR to Fixed Charges.
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"GAAP" means generally accepted accounting principles applied on a
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consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, or their successors
which are applicable in the circumstances as of the date in question. The
requisite that such principles be applied on a consistent basis shall mean that
the accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period.
"Guaranty" or "Guaranteed", as applied to an obligation of another Person,
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means and includes (a) a guaranty, direct or indirect, in any manner, of any
part or all of such obligation, and (b) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to insure in any way
the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation, including, without
limiting the foregoing, any reimbursement obligations with respect to amounts
which may be drawn by beneficiaries of outstanding letters of credit.
"Highest Lawful Rate" means at the particular time in question the maximum
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rate of interest which, under Applicable Law, the Lenders are then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be (a)
the indicated rate ceiling described in and computed in accordance with the
provisions of Section (a)(1) of Art. 1.04, or (b) if the parties subsequently
contract as allowed by Applicable Law, the quarterly ceiling or the annualized
ceiling computed pursuant to Section (d) of Art. 1.04; provided, however, that
at any time the indicated rate ceiling, the quarterly ceiling or the annualized
ceiling shall be less than 18% per annum or more than 24% per annum, the
provisions of Sections (b)(1) and (2) of said Art. 1.04 shall control for
purposes of such determination, as applicable.
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"Indebtedness" means, with respect to any Person, without duplication, (a)
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all items, except accounts payable arising in the normal course of business,
which in accordance with GAAP would be included in determining total liabilities
as shown on the liability side of a balance sheet of such Person, (b) all
obligations secured by any Lien other than Permitted Liens on any property or
asset owned by such Person (other than accounts payable arising in the ordinary
course of business), whether or not the obligation secured thereby shall have
been assumed, (c) to the extent not otherwise included, all Capitalized Lease
Obligations of such Person, all Guaranties, and all obligations under interest
rate swap agreements or similar hedge agreements, and (d) any "withdrawal
liability" of the Borrower or any Subsidiary, as such term is defined under Part
I of Subtitle E of Title IV of ERISA.
"Indemnified Matters" has the meaning ascribed to it in Section 5.10(a)
------------------- ---------------
hereof.
"Indemnitees" has the meaning ascribed to it in Section 5.10(a) hereof.
----------- ---------------
"Indenture" means that certain Indenture dated as of June 17, 1993 pursuant
---------
to which the Senior Subordinated Notes are issued, as the same may be amended,
supplemented or otherwise modified.
"Intellectual Property" means inventions, designs, patents, patent
---------------------
applications, trademarks, trademark applications, trade dress, logos and other
sources of business identifiers, service marks, service xxxx applications, trade
names, trade secrets, formulae, blueprints, registrations, copyrights,
processes, methods, information, data, plans, specifications, designs, drawings,
engineering reports, test reports and processing standards and performance
standards, and all goodwill associated with the foregoing, and all licenses or
other agreements to which the Borrower or any Subsidiary is a party with respect
to any of the foregoing.
"Interest Period" means the period beginning on the day any LIBOR Advance
---------------
is made and ending one, two, three or six months thereafter (as the Borrower
shall select).
"Inventory" has the meaning assigned to such term in the UCC.
---------
"Investment" means any acquisition of the business or assets of any Person
----------
which is not an Acquisition, or any direct or indirect purchase or other
acquisition of, or beneficial interest in, capital stock or other securities or
equity interests of any Person which is not an Acquisition, or any direct or
indirect loan, advance (other than advances to employees for moving and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business) or capital contribution to, or investment in, any Person which is not
an Acquisition, including without limitation the incurrence or sufferance of
Indebtedness or the purchase of accounts receivable of any Person that are not
current assets or do not arise in the ordinary course of business.
"Issuing Bank" means NationsBank of Texas, N.A. in its capacity as issuer
------------
of the Letters of Credit.
- 9 -
"Lender" means each financial institution shown on the signature pages
------
hereof so long as such financial institution maintains a portion of the
Commitment or is owed any part of the Obligations (including the Administrative
Lender in its individual capacity), and each Assignee that hereafter becomes
party hereto pursuant to Section 11.6 hereof, subject to the limitations set
------------
forth therein.
"L/C Cash Collateral Account" has the meaning specified in Section 2.16(h)
--------------------------- ---------------
hereof.
"L/C Related Documents" has the meaning specified in Section 2.16(e)
--------------------- ---------------
hereof.
"Letters of Credit" has the meaning specified in Section 2.16(a) hereof,
----------------- ---------------
and shall include the Existing Letters of Credit.
"Letter of Credit Agreement" has the meaning specified in Section
-------------------------- -------
2.16(b)(i) hereof.
----------
"Letter of Credit Facility" has the meaning specified in Section 2.16(a)
------------------------- ---------------
hereof.
"Leverage Ratio" means, for any date of determination (which shall be as of
--------------
the last day of any Fiscal Quarter), the ratio of (a) the sum of (i) Total
Funded Debt plus (ii) lease expense pursuant to Operating Leases for the
immediately preceding twelve Fiscal Periods (multiplied by six) to (b) EBITDAR
for the immediately preceding twelve Fiscal Periods.
"LIBOR Advance" means an Advance which the Borrower requests to be made as
-------------
a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance with
the provisions of Section 2.2 hereof.
-----------
"LIBOR Basis" means a simple per annum interest rate equal to the lesser of
-----------
(a) the Highest Lawful Rate, or (b) the sum of the LIBOR Rate plus the
Applicable Margin. The LIBOR Basis shall, with respect to LIBOR Advances
subject to reserve or deposit requirements, be subject to premiums for such
reserve or deposit requirements assessed by each Lender, which are payable
directly to each Lender. Once determined, the LIBOR Basis shall remain
unchanged during the applicable Interest Period.
"LIBOR Lending Office" means, with respect to a Lender, the office
--------------------
designated as its LIBOR Lending Office on Schedule 1 attached hereto, and such
----------
other office of such Lender or any of its affiliates hereafter designated by
notice to the Borrower and the Administrative Lender.
"LIBOR Rate" means, for any LIBOR Advance for any Interest Period therefor,
----------
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR Rate" shall mean, for any LIBOR Advance for any
----------
Interest Period
- 10 -
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
-----------------
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates.
"Lien" means, with respect to any property, any mortgage, lien, pledge,
----
collateral assignment, hypothecation, charge, security interest, title retention
agreement, levy, execution, seizure, attachment, garnishment or other
encumbrance of any kind in respect of such property, whether or not xxxxxx,
vested or perfected.
"Liquidity Ratio" means, for the Borrower and its Subsidiaries determined
---------------
in accordance with GAAP on a consolidated basis, at the time in question, the
ratio of (a) the sum of (i) Cash and Cash Equivalents, plus (ii) Accounts, plus
(iii) Inventory to (b) the sum of (i) accounts payable incurred in the ordinary
course of business, plus (ii) outstanding obligations in respect of Advances,
Reimbursement Obligations (without duplication of any Reimbursement Obligations
securing accounts payable) and other Indebtedness payable within twelve months
after such time in question, plus (iii) Securitization Indebtedness.
"Loan Documents" means this Agreement, the Notes, the Subsidiary Guaranty,
--------------
the Fee Letter, the Subordination Agreement, and any other document or agreement
executed or delivered from time to time by the Borrower, any Subsidiary or any
other Person in connection herewith or as security for the Obligations.
"Material Adverse Effect" means any act or circumstance or event that (a)
-----------------------
causes a Default, (b) otherwise could reasonably be expected to be material and
adverse to the business, assets, liabilities, financial condition, results of
operations, business or prospects of the Borrower and its Subsidiaries taken as
a whole, or (c) in any manner whatsoever does or could reasonably be expected to
materially and adversely affect the validity or enforceability of any Loan
Documents.
"Maturity Date" means December 30, 1999, or the earlier date of termination
-------------
in whole of the Commitment pursuant to Section 2.6 or 8.2 hereof, or such later
----------- ---
date as established pursuant to Section 2.17 hereof.
------------
"Maximum Amount" means the maximum amount of interest which, under
--------------
Applicable Law, the Lenders are permitted to charge on the Obligations.
"Monthly Date" means the first Business Day of each month during the term
------------
of this Agreement, commencing January 2, 1997.
"Moody's" means Xxxxx'x Investors Service, Inc.
-------
- 11 -
"Multiemployer Plan" means, as to any Person, at any time, a "multiemployer
------------------
plan" within the meaning of Section 4001(a)(3) of ERISA and to which such Person
or any member of its Controlled Group is making, or is obligated to make
contributions or has made, or been obligated to make, contributions.
"NationsBank" means NationsBank of Texas, N.A., a national banking
-----------
association, in its capacity as a Lender.
"Necessary Authorization" means any right, franchise, license, permit,
-----------------------
consent, approval or authorization from, or any filing or registration with, any
governmental or other regulatory authority or any Person necessary or
appropriate to enable the Borrower or any Subsidiary to maintain and operate its
business and properties.
"Negative Pledge" means any agreement, contract or other arrangement
---------------
whereby the Borrower is prohibited from, or would otherwise be in default as a
result of, creating, assuming, incurring or suffering to exist, directly or
indirectly, any Lien on any of its assets.
"Net Income" means net profit (or loss) after taxes of the Borrower and its
----------
Subsidiaries, on a consolidated basis, determined in accordance with GAAP.
"Net Worth" means, for the Borrower and its Subsidiaries, on a consolidated
---------
basis, determined in accordance with GAAP, the sum of: (a) capital stock taken
at stated or par value, plus (b) paid in capital plus (c) retained earnings,
less (d) treasury stock.
"Non-Equity Consideration" means the consideration given by the Borrower or
------------------------
any of its Subsidiaries for an Acquisition which is other than Equity
Consideration, including but not limited to the sum of (without duplication) (a)
the fair market value of any cash, property or services given, plus (b)
consideration paid with proceeds of Indebtedness permitted pursuant to this
Agreement, plus (c) the amount of any Indebtedness and Operating Leases
(calculated to be the product of annual rentals multiplied by six) assumed,
incurred or guaranteed in connection with such Acquisition by the Borrower or
any Subsidiary which is a Subsidiary immediately prior to such Acquisition.
"Note" means a Promissory Note of Borrower evidencing Advances hereunder,
----
substantially in the form of Exhibit A hereto, together with any extension,
---------
renewal, or amendment thereof, or substitution therefor.
"Notice of Issuance" has the meaning ascribed to it in Section 2.16(b)
------------------ ---------------
hereof.
"Obligations" means (a) all obligations of any nature (whether matured or
-----------
unmatured, fixed or contingent, including the Reimbursement Obligations) of the
Borrower or any Subsidiary to the Lenders under the Loan Documents as they may
be amended from time to time, and (b) all obligations of the Borrower or any
Subsidiary for losses, damages, expenses or any other
- 12 -
liabilities of any kind that any Lender may suffer by reason of a breach by the
Borrower or any Subsidiary of any obligation, covenant or undertaking with
respect to any Loan Document.
"Operating Lease" means any operating lease, as defined in the Financial
---------------
Accounting Standard Board Statement of Financial Accounting Standards No. 13,
dated November, 1976 or otherwise in accordance with GAAP.
"Participant" has the meaning ascribed to it in Section 11.6(c) hereof.
----------- ---------------
"Participation" has the meaning ascribed to it in Section 11.6(c) hereof.
------------- ---------------
"Payment Date" means the last day of the Interest Period for any LIBOR
------------
Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Apple Lien" means the Lien of Apple Computer, Inc. with respect
--------------------
to Inventory, proceeds of Inventory and goods and merchandise bearing the
trademarks or tradestyles of Apple Computer, Inc. or sold by Apple Computer,
Inc. to the Borrower or its Subsidiaries.
"Permitted Investments" means those investments permitted to be made by the
---------------------
Borrower and its Subsidiaries as set forth in the Investment Policy of the
Borrower attached hereto as Schedule 11, as such Investment Policy may be
-----------
amended with the consent of the Board of Directors of the Borrower after the
Agreement Date but only to the extent that such amendments are approved in
writing by the Determining Lenders, which approval shall not be unreasonably
withheld or delayed.
"Permitted Liens" means, as applied to any Person:
---------------
(a) Any Lien in favor of the Administrative Lender for the benefit of the
Lenders to secure the Obligations hereunder;
(b) (i) Liens on real estate for ad valorem taxes not yet delinquent, (ii)
Liens created by lease agreements or statute, rule or regulation to secure the
payments of rental amounts and other sums not yet due thereunder, (iii) Liens on
leasehold interests created by the lessor in favor of any mortgagee of the
leased premises, and (iv) Liens for taxes, assessments, governmental charges,
levies or claims that are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on such Person's books, but only so long as no foreclosure, restraint,
sale or similar proceedings have been commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers and materialmen
and other similar Liens incurred in the ordinary course of business for sums not
yet due, or sums that are
- 13 -
being contested in good faith, if such reserve or appropriate provision, if any,
as shall be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in connection with
workers' compensation, unemployment insurance or similar legislation;
(e) Easements, right-of-way, restrictions and other similar encumbrances on
the use of real property which do not interfere with the ordinary conduct of the
business of such Person;
(f) Liens created to secure the purchase price of assets (which includes,
but is not limited to, inventory, equipment and leased equipment) acquired by
such Person or created to secure Indebtedness permitted by Section 7.1(d)
--------------
hereof, which is incurred solely for the purpose of financing the acquisition of
such assets and incurred at the time of acquisition, so long as each such Lien
shall at all times be confined solely to the asset or assets so acquired (and
proceeds thereof), and refinancings thereof so long as any such Lien remains
solely on the asset or assets acquired, and proceeds thereof, and the amount of
Indebtedness related thereto is not increased;
(g) Liens in respect of judgments or awards for which appeals or
proceedings for review are being prosecuted and in respect of which a stay of
execution upon any such appeal or proceeding for review shall have been secured,
provided that (i) such Person shall have established adequate reserves for such
judgments or awards, (ii) such judgments or awards shall be fully insured and
the insurer shall not have denied coverage, or (iii) such judgments or awards
shall have been bonded to the satisfaction of the Determining Lenders;
(h) Any Liens which are described on Schedule 2 hereto, and Liens resulting
----------
from the refinancing of the related Indebtedness, provided that the Indebtedness
secured thereby shall not be increased and the Liens shall not cover additional
assets of the Borrower;
(i) Liens against Inventory (but not any proceeds thereof other than (A)
the Permitted Apple Lien and (B) insurance proceeds payable as a result of loss
or damage to Inventory) to secure accounts payable owed in respect of the
purchase of such Inventory in the ordinary course of business to manufacturers,
vendors and floor plan financers of such Inventory, provided that such Liens
(other than the Permitted Apple Lien) shall not cover any other assets other
than returns, repossessions, substitutions, replacements, parts, additions and
accessions to and of such Inventory, including all payments with respect to such
Inventory, or any indemnity, warranty or guaranty payable by reason of loss or
damage to or otherwise with respect to such Inventory;
(j) The Permitted Apple Lien;
(k) The Trustee's Lien; and
(l) Liens against Accounts, or fractional interests therein, and proceeds
thereof, sold or pledged by such Person in a Securitization to secure the
Securitization Indebtedness with
- 14 -
respect thereto and security interests on reserve, payment or other accounts
required to be maintained in connection with any such Securitization.
"Person" means an individual, corporation, partnership, limited liability
------
company, trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA
----
(including a Multiemployer Plan) pursuant to which any employees of the
Borrower, its Subsidiaries or any member of their Controlled Group participate.
"Pretax Net Income" means net profit (or loss) before taxes of the Borrower
-----------------
and its Subsidiaries, on a consolidated basis, determined in accordance with
GAAP.
"Prime Rate" means, at any time, the prime interest rate announced or
----------
published by the Reference Lender from time to time as its reference rate for
the determination of interest rates for loans of varying maturities in United
States dollars to United States residents of varying degrees of creditworthiness
and being quoted at such time by the Reference Lender as its "prime rate;" it
being understood that such rate may not be the lowest rate of interest charged
by the Reference Lender.
"Prime Rate Basis" means, for any day, a per annum interest rate equal to
----------------
the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on such
day or (b) the Prime Rate on such day. The Prime Rate Basis shall be adjusted
automatically as of the opening of business on the effective date of each change
in the Prime Rate or Federal Funds Rate, as appropriate, to account for such
change.
"Quarterly Date" means the first Business Day of each January, April, July
--------------
and October, beginning January 2, 1997.
"Reimbursement Obligations" means, in respect of any Letter of Credit as at
-------------------------
any date of determination, the sum of (a) the maximum aggregate amount which is
then available to be drawn under such Letter of Credit plus (b) the aggregate
amount of all drawings under such Letter of Credit not theretofore reimbursed by
the Borrower.
"Reference Lender" means NationsBank; provided that if NationsBank's
----------------
commitment hereunder shall terminate and it shall have no Advances outstanding
hereunder, NationsBank shall cease to be the Reference Lender, and
Administrative Lender (after consultation with Borrower) shall, with notice to
Borrower and Lenders, designate another Lender as the Reference Lender.
"Refinancing Advance" means any LIBOR Advance which is used to pay the
-------------------
principal amount (or any portion thereof) of a LIBOR Advance at the end of its
Interest Period and which, after giving effect to such application, does not
result in an increase in the aggregate amount of outstanding LIBOR Advances.
- 15 -
"Release Date" means the date on which the Notes have been paid, all other
------------
Obligations due and owing have been paid and performed in full, and the
Commitment has been terminated.
"Reportable Event" has the meaning set forth in Section 4043(c) of ERISA.
----------------
"Restricted Payments" means, collectively, (i) Dividends, (ii) Treasury
-------------------
Stock Purchases, (iii) loans to directors, officers and employees of the
Borrower and its Subsidiaries and (iv) any (A) payment or prepayment of
principal, premium or penalty on any Subordinated Debt or any defeasance,
redemption, purchase, repurchase or other acquisition or retirement for value,
in whole or in part, of any Subordinated Debt (including, without limitation,
the setting aside of assets or the deposit of funds therefor) and (B) prepayment
of interest on any Subordinated Debt.
"Securitization" means any transaction in which the Accounts of the
--------------
Borrower or any Subsidiary, or a fractional interest therein, are sold by the
Borrower or sold or pledged by any Subsidiary.
"Securitization Indebtedness" means, for any date of calculation,
---------------------------
calculated for the Borrower and its Subsidiaries on a consolidated basis
determined in accordance with GAAP, any and all obligations of the Borrower and
its Subsidiaries funded under any Securitization, to the extent that the same
constitute liabilities of the Borrower or any Subsidiary under GAAP or would,
under GAAP, constitute liabilities of the Borrower or any Subsidiary if the
Securitization were treated as an on balance sheet transaction.
"Senior Subordinated Notes" means the Borrower's $110,000,000 9-1/2% Senior
-------------------------
Subordinated Notes due 2000.
"Solvent" means, with respect to any Person, that the fair value of the
-------
assets of such Person (both at fair valuation and at present fair saleable
value) is, on the date of determination, greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person
as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and such Person does not
have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present value
at rates believed to be reasonable by such Person.
"Special Counsel" means the law firm of Xxxxxxx, Xxxxxxx & Xxxxxxx, P.C.,
---------------
or such other legal counsel as the Administrative Lender may select.
"Specified Percentage" means, as to any Lender, the percentage indicated
--------------------
beside its name on the signature pages hereof, or if applicable, specified in
its most recent Assignment Agreement.
- 16 -
"Standby Letter of Credit" means an irrevocable letter of credit under
------------------------
which the Issuing Bank agrees to make payments for the account of the Borrower,
on behalf of the Borrower or any Subsidiary thereof in respect of obligations of
the Borrower or such Subsidiary incurred pursuant to contracts made or
performances undertaken or to be undertaken or like matters relating to
contracts to which the Borrower or such Subsidiary is or proposes to become a
party in the ordinary course of the Borrower's or such Subsidiary's business,
including, without limiting the foregoing, for insurance purposes or in respect
of advance payments or as bid or performance bonds or in connection with
industrial revenue bonds or for any other purpose for which a standby letter of
credit might customarily be issued.
"S&P" means Standard & Poor's Ratings Group, a Division of XxXxxx-Xxxx,
---
Inc., a New York corporation.
"Subordinated Debt" means (i) the Senior Subordinated Notes and (ii) other
-----------------
Indebtedness of the Borrower or any Subsidiary having maturities and terms, and
which is subordinated to payment of the Obligations in a manner, approved in
writing by the Administrative Lender and the Determining Lenders, with only such
changes or amendments as are approved by the Administrative Lender and the
Determining Lenders.
"Subordination Agreement" means the Subordination Agreement, executed by
-----------------------
each Subsidiary of the Borrower, substantially in the form of Exhibit F hereto,
---------
as such agreement may be amended, modified, supplemented or restated from time
to time.
"Subsidiary" of the Borrower means any corporation, partnership, joint
----------
venture or similar entity, trust, estate, association or other unincorporated
organization of which (or in which) 50% or more of:
(a) the outstanding capital stock 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),
(b) the interest in the capital or profits of such partnership, joint
venture or similar entity, or
(c) the beneficial interest of such trust, estate, association or other
unincorporated organization,
is at the time directly or indirectly owned by the Borrower, by the Borrower and
one or more of its Subsidiaries or by one or more of the Borrower's
Subsidiaries.
"Subsidiary Guaranty" means the Subsidiary Guaranty, executed by each
-------------------
Subsidiary of the Borrower, guarantying payment and performance of the
Obligations, substantially in the form
- 17 -
of Exhibit B hereto, as such agreement may be amended, modified, supplemented or
---------
restated from time to time.
"Tangible Net Worth" means, as of any date of determination, determined for
------------------
the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP, the sum of (a) Net Worth, minus (b) the sum of the following (without
duplication in respect to items already deducted in arriving at Net Worth): the
book value of all assets which would be treated as intangible assets under GAAP,
including without limitation, goodwill (excluding, however, intangible assets in
an aggregate amount not in excess of $50,000,000 acquired in connection with
Acquisitions made after the Agreement Date), trademarks, service marks,
copyrights, patents, organizational expense and experimental expense, deferred
assets, unamortized debt discount and expense.
"Taxes" has the meaning ascribed thereto in Section 2.15 hereof.
----- ------------
"Total Funded Debt" means, for any date of calculation, calculated for the
-----------------
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP,
the sum (without duplication) of (a) all Debt for Borrowed Money, plus (b) all
Capitalized Lease Obligations.
"Total Liabilities" means, as of any date of determination, determined for
-----------------
the Borrower and its Subsidiaries on a consolidated basis, indebtedness that
would appear as a liability on a balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP.
"Treasury Stock Purchase" means, with respect to any Person, any purchase,
-----------------------
redemption, or other acquisition or retirement for value of any shares of
capital stock of such Person.
"Trustee's Lien" means that certain Lien granted pursuant to Section 7.07
--------------
of the Indenture.
"UCC" means the Uniform Commercial Code as enacted in the State of Texas,
---
as amended from time to time.
"Unused Portion" means an amount equal to the result of (i) the Commitment
--------------
minus (ii) the sum of (A) the outstanding Advances plus (B) outstanding
Reimbursement Obligations in respect of the Letters of Credit.
Section 1.2 Amendments and Renewals. Each definition of an agreement in
-----------------------
this Article 1 shall include such agreement as amended to date, and as amended
---------
or renewed from time to time in accordance with its terms, but only with the
prior written consent of the Determining Lenders.
Section 1.3 Construction. The terms defined in this Article 1 (except as
------------
otherwise expressly provided in this Agreement) for all purposes shall have the
meanings set forth in Section 1.1 hereof, and the singular shall include the
-----------
plural, and vice versa, unless otherwise
- 18 -
specifically required by the context. All accounting terms used in this
Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP on a consolidated basis for the Borrower and its
Subsidiaries, unless otherwise expressly stated herein.
ARTICLE 2.
Advances
--------
Section 2.1 The Advances. Each Lender severally agrees, upon the terms
------------
and subject to the conditions of this Agreement, to make Advances to the
Borrower from time to time in an aggregate amount not to exceed its Specified
Percentage of the Commitment less its Specified Percentage of the aggregate
amount of all Reimbursement Obligations then outstanding (assuming compliance
with all conditions to drawing) for the purposes set forth in Section 5.9
-----------
hereof. Subject to Section 2.9 hereof, Advances may be repaid and then
-----------
reborrowed. Any Advance shall, at the option of the Borrower as provided in
Section 2.2 hereof (and, in the case of LIBOR Advances, subject to availability
-----------
and to the provisions of Article 9 hereof), be made as a Base Rate Advance or a
---------
LIBOR Advance; provided that there shall not be outstanding to any Lender, at
any one time, more than six LIBOR Advances. Notwithstanding any provision in
any Loan Document to the contrary, in no event shall the principal amount of all
outstanding Advances and Reimbursement Obligations exceed the Commitment. On
the Maturity Date unless sooner paid as provided herein, the outstanding
Advances shall be repaid in full.
Section 2.2 Manner of Borrowing and Disbursement.
------------------------------------
(a) In the case of Base Rate Advances, the Borrower, through an Authorized
Signatory, shall give the Administrative Lender prior to 11:00 a.m., Dallas,
Texas time, on the date of any proposed Base Rate Advance irrevocable written
notice, or irrevocable telephonic notice followed immediately by written notice
(provided, however, that the Borrower's failure to confirm any telephonic notice
in writing shall not invalidate any notice so given), of its intention to borrow
or reborrow a Base Rate Advance hereunder. Such notice of borrowing shall
specify the requested funding date, which shall be a Business Day, and the
amount of the proposed aggregate Base Rate Advances to be made by Lenders.
(b) In the case of LIBOR Advances, the Borrower, through an Authorized
Signatory, shall give the Administrative Lender at least two Business Days'
irrevocable written notice, or irrevocable telephonic notice followed
immediately by written notice (provided, however, that the Borrower's failure to
confirm any telephonic notice in writing shall not invalidate any notice so
given), of its intention to borrow or reborrow a LIBOR Advance hereunder.
Notice shall be given to the Administrative Lender prior to 11:00 a.m., Dallas,
Texas time, in order for such Business Day to count toward the minimum number of
Business Days required. LIBOR Advances shall in all cases be subject to
availability and to Article 9 hereof. For LIBOR Advances, the notice of
---------
borrowing shall specify the requested funding date, which shall be a Business
Day, the amount of the proposed aggregate LIBOR Advances to be made by Lenders
- 19 -
and the Interest Period selected by the Borrower, provided that no such Interest
Period shall extend past the Maturity Date or prohibit or impair the Borrower's
ability to comply with Section 2.8 hereof.
-----------
(c) Subject to Sections 2.1 and 2.9 hereof, at least two Business Days
------------ ---
prior to each Payment Date for a LIBOR Advance, the Borrower, through an
Authorized Signatory, shall give the Administrative Lender irrevocable written
notice, or irrevocable telephonic notice followed immediately by written notice
(provided, however, that the Borrower's failure to confirm any telephonic notice
in writing shall not invalidate any notice so given), specifying whether all or
a portion of such LIBOR Advance outstanding on such Payment Date (i) is to be
repaid and then reborrowed in whole or in part as a LIBOR Advance, (ii) is to be
repaid and then reborrowed in whole or in part as a Base Rate Advance, or (iii)
is to be repaid and not reborrowed; provided, however, notwithstanding anything
in this Agreement to the contrary, if on any Payment Date a Default shall exist,
such LIBOR Advance may only be repaid or reborrowed as a Base Rate Advance.
Upon such Payment Date, such LIBOR Advance shall, subject to the provisions
hereof, be so repaid and, as applicable, reborrowed.
(d) Subject to Sections 2.1 and 2.9 hereof, upon irrevocable prior written
------------ ---
notice prior to 11:00 a.m., Dallas time, on the date of any proposed repayment
of all or a portion of the Base Rate Advances (or two Business Days if the
Borrower wishes to reborrow a LIBOR Advance), through an Authorized Signatory,
or irrevocable telephonic notice followed immediately by written notice
(provided, however, that the Borrower's failure to confirm any telephonic notice
in writing shall not invalidate any notice so given), the Borrower may (i) repay
all or a portion of the Base Rate Advances and (ii) reborrow all or a portion of
the principal amount thereof as one or more LIBOR Advances.
(e) The aggregate amount of Base Rate Advances to be made by the Lenders on
any day shall be in a principal amount which is at least $500,000 and which is
an integral multiple of $100,000; provided, however, that such amount may equal
the unused amount of the Commitment. The aggregate amount of LIBOR Advances
having the same Interest Period and to be made by the Lenders on any day shall
be in a principal amount which is at least $2,000,000 and which is an integral
multiple of $100,000.
(f) The Administrative Lender shall promptly notify the Lenders of each
notice received from the Borrower pursuant to this Section. Failure of the
Borrower to give any notice in accordance with Sections 2.2(c) and (d) hereof
--------------- ---
(if with respect to clause (d), such repayment is to be reborrowed as one or
more LIBOR Advances) shall result in a repayment of any such existing Advance on
the applicable Payment Date by a Refinancing Advance which is a Base Rate
Advance. Each Lender shall, not later than noon, Dallas, Texas time, on the
date of any Advance that is not a Refinancing Advance, deliver to the
Administrative Lender, at its address set forth herein, such Lender's Specified
Percentage of such Advance in immediately available funds in accordance with the
Administrative Lender's instructions. Prior to 2:00 p.m., Dallas, Texas time,
on the date of any Advance hereunder, the Administrative Lender shall, subject
to satisfaction of the conditions set forth in Article 3 hereof, disburse the
---------
amounts made available
- 20 -
to the Administrative Lender by the Lenders by (i) transferring such amounts by
wire transfer pursuant to the Borrower's instructions, or (ii) in the absence of
such instructions, crediting such amounts to the account of the Borrower
maintained with the Administrative Lender. All Advances shall be made by each
Lender according to its Specified Percentage.
Section 2.3 Interest.
--------
(a) On Base Rate Advances.
---------------------
(i) The Borrower shall pay interest on the unpaid principal amount of
the Base Rate Advances outstanding from time to time, until such Base Rate
Advances are due (whether at maturity, by reason of acceleration, by
scheduled reduction, or otherwise) or repaid at a simple interest rate per
annum equal to the Prime Rate Basis for the Base Rate Advances as in effect
from time to time, provided that interest on the Base Rate Advances shall
not exceed the Maximum Amount. If at any time the Prime Rate Basis would
exceed the Highest Lawful Rate, interest payable on the Base Rate Advances
shall be limited to the Highest Lawful Rate, but the Prime Rate Basis shall
not thereafter be reduced below the Highest Lawful Rate until the total
amount of interest accrued on the Base Rate Advances equals the amount of
interest that would have accrued if the Prime Rate Basis had been in effect
at all times.
(ii) Interest on the Base Rate Advances shall be computed on the basis
of a year of 365 or 366 days, as applicable, for the number of days
actually elapsed, and shall be payable in arrears on each Quarterly Date
and on the Maturity Date.
(b) On LIBOR Advances.
-----------------
(i) The Borrower shall pay interest on the unpaid principal amount of
each LIBOR Advance, from the date such Advance is made until it is due
(whether at maturity, by reason of acceleration, by scheduled reduction, or
otherwise) or repaid, at a rate per annum equal to the LIBOR Basis for such
Advance. The Administrative Lender, whose determination shall be
controlling in the absence of manifest error, shall determine the LIBOR
Basis on the second Business Day prior to the applicable funding date and
shall notify the Borrower and the Lenders of such LIBOR Basis.
(ii) Subject to Section 11.9 hereof, interest on each LIBOR Advance
------------
shall be computed on the basis of a 360-day year for the actual number of
days elapsed, and shall be payable in arrears on the applicable Payment
Date and on the Maturity Date; provided, however, that if the Interest
Period for such Advance exceeds three months, interest shall also be due
and payable in arrears on each Quarterly Date during such Interest Period.
(c) Interest if No Notice of Selection of Interest Rate Basis. If the
---------------------------------------------------------
Borrower fails to give the Administrative Lender timely notice of its selection
of a LIBOR Basis or an Interest
- 21 -
Period for a LIBOR Advance, or if for any reason a determination of a LIBOR
Basis for any Advance is not timely concluded due to the fault of the Borrower,
the Prime Rate Basis shall apply to the applicable Advance.
(d) Interest After an Event of Default. (i) After an Event of Default
----------------------------------
(other than an Event of Default specified in Section 8.1(f) or (g) hereof) and
-------------- ---
during any continuance thereof, at the option of Determining Lenders, and (ii)
after an Event of Default specified in Section 8.1(f) or (g) hereof and during
-------------- ---
any continuance thereof, automatically and without any action by the
Administrative Lender or any Lender, the Obligations shall bear interest at a
rate per annum equal to the Default Rate. Such interest shall be payable on
each Quarterly Date and on the Maturity Date, and shall accrue until the earlier
of (i) waiver or cure (to the satisfaction of the Determining Lenders or all
Lenders, as applicable) of the applicable Event of Default, (ii) agreement by
the Lenders to rescind the charging of interest at the Default Rate, or (iii)
payment in full of the Obligations. The Lenders shall not be required to
accelerate the maturity of the Advances, to exercise any other rights or
remedies under the Loan Documents, or to give notice to the Borrower of the
decision to charge interest at the Default Rate. The Lenders will undertake to
notify the Borrower, after the effective date, of the decision to charge
interest at the Default Rate.
Section 2.4 Fees.
----
(a) Commitment Fee. Subject to Section 11.9 hereof, the Borrower agrees to
-------------- ------------
pay to the Administrative Lender, for the ratable account of the Lenders, a
commitment fee on the daily average Unused Portion at the following per annum
percentages, applicable in the following situations:
Applicability Percentage
------------- ----------
(a) The Fixed Charge Coverage Ratio is less than 2.25 0.300
to 1
(b) The Fixed Charge Coverage Ratio is greater than 0.250
or equal to 2.25 to 1 but less than 3.00 to 1
(c) The Fixed Charge Coverage Ratio is greater than 0.225
or equal to 3.00 to 1 but less than 3.75 to 1
(d) The Fixed Charge Coverage Ratio is greater than 0.200
or equal to 3.75 to 1 but less than 4.50 to 1
(e) the Fixed Charge Coverage Ratio is greater than or 0.175
equal to 4.50 to 1
Such fee shall accrue beginning on the Agreement Date and shall be (i) payable
in arrears on each Quarterly Date and on the Maturity Date, fully earned when
due and, subject to Section 11.9 hereof, nonrefundable when paid and (ii)
------------
subject to Section 11.9 hereof, computed
------------
- 22 -
on the basis of a 360-day year, for the actual number of days elapsed. The
commitment fee shall be subject to reduction or increase, as applicable and as
set forth in the table above, on a quarterly basis according to the performance
of the Borrower as tested by using the Fixed Charge Coverage Ratio as of the end
of the most recent Fiscal Quarter (calculated for the twelve Fiscal Periods
preceding the date of determination). Any such increase or reduction in such fee
shall be effective on the date of receipt by the Lenders of the financial
statements required pursuant to Section 6.1 or 6.2, as applicable, hereof and
----------- ---
the Compliance Certificate required pursuant to Section 6.3 hereof. If such
-----------
financial statements and Compliance Certificate are not received by the Lenders
on the date required, the fee payable in respect of the Commitment shall be
determined as if the Fixed Charge Coverage Ratio is less than 2.25 to 1 until
such time as such financial statements and Compliance Certificate are received.
Notwithstanding the above, until such time as the Lenders shall have received
the financial statements required for the second Fiscal Quarter of the
Borrower's 1997 Fiscal Year and related Compliance Certificate, the fee payable
in respect of the Commitment shall be determined as if the Fixed Charge Coverage
Ratio is greater than or equal to 3.00 to 1 but less than 3.75 to 1.
(b) Closing Fee. Subject to Section 11.9 hereof, the Borrower agrees to
----------- ------------
pay to the Administrative Lender, for the account of the Lenders, a closing fee
at the following percentages based on the amount of each Lender's portion of the
Commitment:
Commitment Amount Closing Fee
----------------- -----------
$20,000,000 or greater 0.15%
Less than $20,000,000 0.10%
Such fee shall be payable on the Agreement Date, and, subject to Section 11.9
------------
hereof, fully-earned when due and nonrefundable when paid.
(c) Other Fees. Subject to Section 11.9 hereof, the Borrower agrees to pay
---------- ------------
to the Administrative Lender, for the account of the Administrative Lender, the
fees provided for in the letter agreement (the "Fee Letter"), dated as of the
Agreement Date, between the Borrower and the Administrative Lender on the dates
and in the amounts specified therein.
Section 2.5 Prepayment.
----------
(a) Voluntary LIBOR Advance Prepayments. Upon two Business Days' prior
-----------------------------------
telephonic notice (to be promptly followed by written notice) by an Authorized
Signatory to the Administrative Lender, LIBOR Advances may be voluntarily
prepaid but only so long as the Borrower concurrently reimburses the Lenders in
accordance with Section 2.9 hereof. Any notice of prepayment shall be
-----------
irrevocable.
(b) Mandatory Prepayment. On or before the date of any reduction of the
--------------------
Commitment, the Borrower shall prepay applicable outstanding Advances in an
amount necessary
- 23 -
to reduce the sum of outstanding Advances and Reimbursement Obligations to an
amount less than or equal to the Commitment as so reduced. To the extent
required by the preceding sentence, the Borrower shall first prepay all Base
Rate Advances and shall thereafter prepay LIBOR Advances. To the extent that any
prepayment requires that a LIBOR Advance be repaid on a date other than the last
day of its Interest Period, the Borrower shall reimburse each Lender in
accordance with Section 2.9 hereof. To the extent that outstanding Advances and
-----------
Reimbursement Obligations exceed the Commitment after any reduction thereof, the
Borrower shall repay outstanding Advances in an amount equal to any such excess
and all accrued interest attributable to such excess Advances on the date of
such reduction.
(c) Prepayments, Generally. Any voluntary partial prepayment of a Base
----------------------
Rate Advance shall be in a principal amount which is at least $100,000 and which
is an integral multiple thereof. Any voluntary partial payment of a LIBOR
Advance shall be in a principal amount which is at least $2,000,000 and which is
an integral multiple of $100,000, and to the extent made on a date other than
the last day of its Interest Period, the Borrower shall reimburse each Lender in
accordance with Section 2.9 hereof.
-----------
Section 2.6 Reduction of Commitments.
------------------------
(a) Voluntary Reduction. The Borrower shall have the right, upon not less
-------------------
than 10 Business Days' notice by an Authorized Signatory to the Administrative
Lender (if telephonic, to be confirmed by telex or in writing on or before the
date of reduction or termination), which shall promptly notify the Lenders, to
terminate or reduce the Commitment, in whole or in part. Each partial reduction
shall be in an aggregate amount which is at least $5,000,000 and which is an
integral multiple of $100,000, and no voluntary reduction in the Commitment
shall cause any LIBOR Advance to be repaid prior to the last day of its Interest
Period.
(b) Mandatory Reduction. On the Maturity Date, the Commitment shall
-------------------
automatically be reduced to zero.
(c) General Requirements. Upon any reduction of the Commitment pursuant to
--------------------
this Section, the Borrower shall immediately make a repayment of applicable
Advances in accordance with Section 2.5(b) hereof. The Borrower shall reimburse
--------------
each Lender for any loss or out-of-pocket expense incurred by each Lender in
connection with any such payment, as set forth in Section 2.9 hereof to the
-----------
extent applicable; provided, however, such obligation to reimburse each Lender
for any such loss or expense shall not be deemed to permit any LIBOR Advance to
be repaid prior to the last day of its Interest Period as a result of a
voluntary reduction in the Commitment as prohibited pursuant to Section 2.6(a)
--------------
hereof. The Borrower shall not have any right to rescind any termination or
reduction. Once reduced, the Commitment may not be increased or reinstated.
Section 2.7 Non-Receipt of Funds by the Administrative Lender. Unless the
-------------------------------------------------
Administrative Lender shall have been notified by a Lender prior to the date of
any proposed Advance (which notice shall be effective upon receipt) that such
Lender does not intend to make
- 24 -
the proceeds of such Advance available to the Administrative Lender, the
Administrative Lender may assume that such Lender has made such proceeds
available to the Administrative Lender on such date, and the Administrative
Lender may in reliance upon such assumption (but shall not be required to) make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Lender by such Lender, the
Administrative Lender shall be entitled to recover such amount on demand from
such Lender (or, if such Lender fails to pay such amount forthwith upon such
demand, from the Borrower) together with interest thereon in respect of each day
during the period commencing on the date such amount was available to the
Borrower and ending on (but excluding) the date the Administrative Lender
receives such amount from the Lender, with interest thereon at a per annum rate
equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal Funds
Rate. No Lender shall be liable for any other Lender's failure to fund an
Advance hereunder.
Section 2.8 Payment of Principal of Advances. The Borrower agrees to pay
--------------------------------
the principal amount of the Advances to the Administrative Lender for the
account of the Lenders as follows:
(a) Base Rate Advances. The unpaid principal amount of the Base Rate
------------------
Advances shall be due and payable on the Maturity Date.
(b) LIBOR Advances. The principal amount of each LIBOR Advance hereunder
--------------
shall be due and payable on its Payment Date, which principal payment may be
made by means of a Refinancing Advance.
(c) Commitment Reduction. On the date of reduction of the Commitment
--------------------
pursuant to Section 2.6 hereof, including the Maturity Date, the aggregate
-----------
amount of the applicable Advances outstanding on such date of reduction in
excess of the Commitment as reduced minus all outstanding Reimbursement
Obligations shall be due and payable, which principal payment may not be made by
means of Refinancing Advances.
(d) Maturity Date. The principal amount of the Advances, all accrued
-------------
interest and fees thereon, and all other Obligations related thereto, shall be
due and payable in full on the Maturity Date.
Section 2.9 Reimbursement. Whenever any Lender shall sustain or incur any
-------------
losses or reasonable out-of-pocket expenses in connection with (a) failure by
the Borrower to borrow any LIBOR Advance after having given notice of its
intention to borrow in accordance with Section 2.2 hereof (whether by reason of
-----------
the Borrower's election not to proceed or the non-fulfillment of any of the
conditions set forth in Article 3 hereof), or (b) any prepayment for any reason
---------
of any LIBOR Advance in whole or in part (including a prepayment pursuant to
Section 9.3(b) hereof), the Borrower agrees to pay to any such Lender, upon its
--------------
demand, an amount sufficient to compensate such Lender for all such losses and
out-of-pocket expenses, subject to Section 11.9 hereof. Such Lender's good
------------
faith determination of the amount of such losses or out-of-pocket expenses,
calculated in its usual fashion, absent manifest error, shall be
- 25 -
controlling. Such losses shall include, without limiting the generality of the
foregoing, reasonable expenses incurred by such Lender in connection with the
re-employment of funds prepaid, repaid prior to the end of the applicable
Interest Period, converted and not borrowed, or converted and paid prior to the
end of the applicable Interest Period, as the case may be, but shall not include
lost profits. Upon request of the Borrower, such Lender shall provide a
certificate setting forth the amount to be paid to it by the Borrower hereunder
and calculations therefor.
Section 2.10 Manner of Payment.
-----------------
(a) Each payment (including prepayments) by the Borrower of the principal
of or interest on the Advances, fees, and any other amount owed under this
Agreement or any other Loan Document shall be made not later than 12:00 noon
(Dallas, Texas time) on the date specified for payment under this Agreement to
the Administrative Lender at the Administrative Lender's office, in lawful money
of the United States of America constituting immediately available funds.
(b) If any payment under this Agreement or any other Loan Document shall be
specified to be made upon a day which is not a Business Day, it shall be made on
the next succeeding day which is a Business Day, unless, with respect to a
payment due in respect of a LIBOR Advance, such Business Day falls in another
calendar month, in which case payment shall be made on the preceding Business
Day. Any extension or shortening of time shall in such case be included in
computing interest and fees, if any, in connection with such payment.
(c) The Borrower agrees to pay principal, interest, fees and all other
amounts due under the Loan Documents without deduction for set-off or
counterclaim or any deduction whatsoever.
(d) If some but less than all amounts due from the Borrower are received
by the Administrative Lender, the Administrative Lender shall apply such amounts
in the following order of priority: (i) to the payment of the Administrative
Lender's expenses incurred on behalf of the Lenders then due and payable, if
any; (ii) to the payment of all other fees then due and payable; (iii) to the
payment of interest then due and payable on the Advances; (iv) to the payment of
all other amounts not otherwise referred to in this clause (d) then due and
payable under the Loan Documents; and (v) to the payment of principal then due
and payable on the Advances.
Section 2.11 LIBOR Lending Offices. Each Lender's initial LIBOR Lending
---------------------
Office is set forth opposite its name in Schedule 1 attached hereto. Each
----------
Lender shall have the right at any time and from time to time to designate a
different office of itself or of any Affiliate as such Lender's LIBOR Lending
Office, and to transfer any outstanding LIBOR Advance to such LIBOR Lending
Office. No such designation or transfer shall result in any liability on the
part of the Borrower for increased costs or expenses resulting solely from such
designation or transfer (except any such transfer which is made by a Lender
pursuant to Section 9.2 or 9.3
----------- ---
- 26 -
hereof, or otherwise for the purpose of complying with Applicable Law).
Increased costs for expenses resulting from a change in law occurring subsequent
to any such designation or transfer shall be deemed not to result solely from
such designation or transfer.
Section 2.12 Sharing of Payments. Any Lender obtaining a payment (whether
-------------------
voluntary or involuntary, due to the exercise of any right of set-off, or
otherwise) on account of its Advances in excess of its Specified Percentage of
all payments made by the Borrower with respect to Advances shall purchase from
each other Lender such participation in the Advances made by such other Lender
as shall be necessary to cause such purchasing Lender to share the excess
payment pro rata according to Specified Percentages with each other Lender;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section, to the fullest
extent permitted by law, may exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
Section 2.13 Calculation of LIBOR Rate. The provisions of this Agreement
-------------------------
relating to calculation of the LIBOR Rate are included only for the purpose of
determining the rate of interest or other amounts to be paid hereunder that are
based upon such rate, it being understood that each Lender shall be entitled to
fund and maintain its funding of all or any part of a LIBOR Advance as it sees
fit.
Section 2.14 Booking Loans. Any Lender may make, carry or transfer
-------------
Advances at, to or for the account of any of its branch offices or the office of
any Affiliate. No such action shall result in any liability on the part of the
Borrower from such action (except any such action which is made by a Lender
pursuant to Section 9.2 or 9.3 hereof, or otherwise for the purpose of complying
----------- ---
with Applicable Law).
Section 2.15 Taxes.
-----
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.10 hereof, free and clear of and without deduction for
------------
any and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding, in the case
---------
of each Lender and the Administrative Lender, taxes imposed on, based upon or
measured by its overall net income, net worth or capital, and franchise taxes,
doing business taxes or minimum taxes imposed on it, (i) by the jurisdiction
under the laws of which such Lender or the Administrative Lender (as the case
may be) is organized and in which it has its applicable lending office or any
political subdivision thereof; (ii) by any other jurisdiction, or any political
subdivision thereof, other than those imposed by reason of (A) an asserted
relation of such jurisdiction to the transactions contemplated by this
Agreement, (B) the activities of the Borrower in such jurisdiction, or (C) the
activities in connection with the transactions contemplated by this Agreement of
a Lender or the
- 27 -
Administrative Lender; (iii) if applicable, by reason of failure by such Lender
or the Administrative Lender to comply with the requirements of paragraph (e) of
this Section 2.15; and (iv) which are, in the case of any Lender, Taxes in the
------------
nature of transfer, stamp, recording or documentary taxes resulting from a
transfer (other than as a result of foreclosure) by such Lender of all or any
portion of its interest in this Agreement, the Notes or any other Loan Documents
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Lender, (x) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
-------
2.15) such Lender or the Administrative Lender (as the case may be) receives an
----
amount equal to the sum it would have received had no such deductions been made,
(y) the Borrower shall make such deductions and (z) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges and
similar levies (other than Taxes described in clause (iv) of the first sentence
of Section 2.15(a) hereof) that arise from any payment made hereunder or from
---------------
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative Lender
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.15) paid by such Lender or the Administrative Lender (as the case may
------------
be) and all liabilities (including penalties, additions to tax, interest and
reasonable expenses) arising therefrom or with respect thereto whether or not
such Taxes or Other Taxes were correctly or legally asserted (provided that the
Borrower shall be reimbursed for any amounts so paid by the Borrower which may
later be determined to have been incorrectly or illegally asserted and which are
refunded to any Lender), other than penalties, additions to tax, interest and
expenses arising as a result of gross negligence on the part of such Lender or
the Administrative Lender, provided, however, that the Borrower shall have no
-------- -------
obligation to indemnify such Lender or the Administrative Lender unless and
until such Lender or the Administrative Lender shall have delivered to the
Borrower a certificate setting forth in reasonable detail the basis of the
Borrower's obligation to indemnify such Lender or the Administrative Lender
pursuant to this Section 2.15. This indemnification shall be made within 30
------------
days from the date such Lender or the Administrative Lender (as the case may be)
makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Administrative Lender the original or a certified copy of a
receipt evidencing payment thereof. If no Taxes are payable in respect of any
payment hereunder, the Borrower will furnish to the Administrative Lender a
certificate from each appropriate taxing authority, or an opinion of counsel
acceptable to the Administrative Lender, in either case stating that such
payment is
- 28 -
exempt from or not subject to Taxes, provided, however, that such certificate or
-----------------
opinion need only be given if: (i) the Borrower makes any payment from any
account located outside the United States, or (ii) the payment is made by a
payor that is not a United States Person. For purposes of this Section 2.15 the
------------
terms "United States" and "United States Person" shall have the meanings set
forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees that:
(i) it shall, no later than the Agreement Date (or, in the case of a
Lender which becomes a party hereto pursuant to Section 11.6 hereof after
------------
the Agreement Date, the date upon which such Lender becomes a party hereto)
deliver to the Borrower through the Administrative Lender, with a copy to
the Administrative Lender:
(A) if any lending office is located in the United States of America,
two (2) accurate and complete signed originals of Internal
Revenue Service Form 4224 or any successor thereto ("Form 4224"),
or
(B) if any lending office is located outside the United States of
America, two (2) accurate and complete signed originals of
Internal Revenue Service Form 1001 or any successor thereto
("Form 1001"),
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such lending office or lending offices under this Agreement free
from withholding of United States Federal income tax;
(ii) if at any time such Lender changes its lending office or lending
offices or selects an additional lending office it shall, at the same time
or reasonably promptly thereafter but only to the extent the forms
previously delivered by it hereunder are no longer effective, deliver to
the Borrower through the Administrative Lender, with a copy to the
Administrative Lender, in replacement for the forms previously delivered by
it hereunder:
(A) if such changed or additional lending office is located in the
United States of America, two (2) accurate and complete signed
originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals of Form
1001,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such changed or additional lending office under this Agreement
free from withholding of United States Federal income tax;
- 29 -
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in clause
(ii) above) requiring a change in the most recent Form 4224 or Form 1001
previously delivered by such Lender and if the delivery of the same be
lawful, deliver to the Borrower through the Administrative Lender with a
copy to the Administrative Lender, two (2) accurate and complete original
signed copies of Form 4224 or Form 1001 in replacement for the forms
previously delivered by such Lender;
(iv) it shall, promptly upon the request of the Borrower to that
effect, deliver to the Borrower such other forms or similar documentation
as may be required from time to time by any applicable law, treaty, rule or
regulation in order to establish such Lender's tax status for withholding
purposes; and
(v) it shall notify the Borrower within 30 days after any event
(including an amendment to, or a change in any applicable law or regulation
or in the written interpretation thereof by any regulatory authority or any
judicial authority, or by ruling applicable to such Lender of any
governmental authority charged with the interpretation or administration of
any law) shall occur that results in such Lender no longer being capable of
receiving payments without any deduction or withholding of United States
federal income tax.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.15 shall survive the payment in full of principal and interest
------------
hereunder.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.15 shall use its reasonable best efforts (consistent with its internal
------------
policy and legal and regulatory restrictions) to change the jurisdiction of its
lending office, if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may thereafter accrue
and would not, in the reasonable judgment of such Lender, be materially
disadvantageous to such Lender.
(h) Each Lender (and the Administrative Lender with respect to payments to
the Administrative Lender for its own account) agrees that (i) it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver, by virtue of the location of any
Lender's lending office) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by the Borrower under this Section 2.15; provided,
------------ --------
however, the Lenders and the Administrative Lender shall not be obligated by
-------
reason of this Section 2.15(h) to contest the payment of any Taxes or Other
---------------
Taxes or to disclose any information regarding its tax affairs or tax
computations or reorder its tax or other affairs or tax or other planning.
Subject to the foregoing, to the extent the Borrower pays sums pursuant to this
Section 2.15 and the applicable Lender or the Administrative Lender receives a
------------
refund of any or all of such sums, such refund shall be applied to reduce any
amounts then due and owing under this Agreement or, to the
- 30 -
extent that no amounts are due and owing under this Agreement at the time such
refunds are received, the party receiving such refund shall promptly pay over
all such refunded sums to the Borrower, provided that no Default or Event of
Default is in existence at such time.
Section 2.16 Letters of Credit.
-----------------
(a) The Letter of Credit Facility. The Borrower may request the Issuing
-----------------------------
Bank, on the terms and conditions hereinafter set forth, to issue, and the
Issuing Bank shall, if so requested, issue, letters of credit (including the
Existing Letters of Credit, the "Letters of Credit") for the account of the
Borrower or any Subsidiary from time to time on any Business Day from the date
of the initial Advance until the Maturity Date in an aggregate maximum amount
(assuming compliance with all conditions to drawing) not to exceed, at any time
outstanding, the lesser of (i) $75,000,000 (the "Letter of Credit Facility") or
(ii) the result of (1) the Commitment minus (2) the aggregate principal amount
-----
of Advances and Reimbursement Obligations then outstanding. No Letter of Credit
shall have an expiration date (including all rights of renewal) later than the
earlier of (i) the Maturity Date or (ii) two years after the date of issuance
thereof. Immediately upon the issuance of each Letter of Credit (or upon
satisfaction of the conditions precedent set forth in Sections 3.1 and 3.2
------------ ---
hereof with respect to the Existing Letters of Credit), the Issuing Bank shall
be deemed to have sold and transferred to each Lender, and each Lender shall be
deemed to have purchased and received from the Issuing Bank, in each case
irrevocably and without any further action by any party, an undivided interest
and participation in such Letter of Credit, each drawing thereunder and the
obligations of the Borrower under this Agreement in respect thereof in an amount
equal to the product of (x) such Lender's Specified Percentage times (y) the
maximum amount available to be drawn under such Letter of Credit (assuming
compliance with all conditions to drawing). Within the limits of the Letter of
Credit Facility, and subject to the limits referred to above, the Borrower may
request the issuance of Letters of Credit under this Section 2.16(a), repay any
---------------
Advances resulting from drawings thereunder pursuant to Section 2.16(c) hereof
---------------
and request the issuance of additional Letters of Credit under this Section
-------
2.16(a).
-------
(b) Request for Issuance.
--------------------
(i) Each Letter of Credit shall be issued upon notice, given not later
than 11:00 a.m. (Dallas time) on the third Business Day prior to the date
of the proposed issuance of such Letter of Credit, by the Borrower to the
Issuing Bank. Each Letter of Credit shall be issued upon notice given in
accordance with the terms of any separate agreement between the Borrower
and the Issuing Bank in form and substance reasonably satisfactory to the
Borrower and the Issuing Bank providing for the issuance of Letters of
Credit pursuant to this Agreement and containing terms and conditions not
inconsistent with this Agreement (a "Letter of Credit Agreement"), provided
--------
that if any such terms and conditions are inconsistent with this Agreement,
this Agreement shall control. Each such notice of issuance of a Letter of
Credit from the Borrower (a "Notice of Issuance") shall be by telex,
telecopier or cable, specifying therein, in the case of a Letter of Credit,
the requested (A) date of such issuance (which shall be a Business Day),
(B) maximum
- 31 -
amount of such Letter of Credit, (C) expiration date of such Letter of
Credit, (D) name and address of the beneficiary of such Letter of Credit,
(E) form of such Letter of Credit and (F) such other information as shall
be required pursuant to the relevant Letter of Credit Agreement. If the
requested terms of such Letter of Credit are acceptable to the Issuing Bank
in its reasonable discretion, the Issuing Bank will, upon fulfillment of
the applicable conditions set forth in Article 3 hereof, make such Letter
---------
of Credit available to the Borrower at its office referred to in Section
-------
11.1 hereof or as otherwise agreed with the Borrower in connection with
----
such issuance.
(ii) The Issuing Bank shall furnish to each Lender after each
Quarterly Date (or each Monthly Date, if requested by any Lender) (A) a
written report summarizing issuance and expiration dates of Letters of
Credit issued during the preceding fiscal quarter and drawings during such
fiscal quarter under all Letters of Credit and setting forth each Lender's
participation therein and (B) if requested by any Lender, a copy of each
Letter of Credit issued during the preceding fiscal quarter.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a draft
-------------------------
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of an Advance, which shall bear
interest at the Prime Rate Basis, in the amount of such draft (but without any
requirement for compliance with the conditions set forth in Article 3 hereof).
---------
In the event that a drawing under any Letter of Credit is not reimbursed by the
Borrower by 11:00 a.m. (Dallas time) on the first Business Day after such
drawing, the Issuing Bank shall promptly notify Administrative Lender and each
Lender. Each Lender shall, on the first Business Day following such
notification, make an Advance, which shall bear interest at the Prime Rate
Basis, and shall be used to repay the applicable portion of the Issuing Bank's
Advance with respect to such Letter of Credit, in an amount equal to the amount
of its participation in such drawing for application to reimburse the Issuing
Bank (but without any requirement for compliance with the applicable conditions
set forth in Article 3 hereof) and shall make available to the Administrative
---------
Lender for the account of the Issuing Bank, by deposit at the Administrative
Lender's office, in same day funds, the amount of such Advance. In the event
that any Lender fails to make available to the Administrative Lender for the
account of the Issuing Bank the amount of such Advance, the Issuing Bank shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at a rate per annum equal to the lesser of (i) the Highest
Lawful Rate or (ii) the Federal Funds Rate.
(d) Increased Costs. If any change in any law or regulation or in the
---------------
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (i) impose, modify or deem
applicable any reserve, special deposit or similar requirement against letters
of credit or guarantees issued by, or assets held by, or deposits in or for the
account of, the Issuing Bank or any Lender or (ii) impose on the Issuing Bank or
any Lender any other condition regarding this Agreement or such Lender or any
Letter of Credit, and the result of any event referred to in the preceding
clause (i) or (ii) shall be to increase the cost to the Issuing Bank of issuing
or maintaining any Letter of Credit or to any Lender of purchasing any
participation therein or making any Advance pursuant to Section 2.16(c) hereof,
---------------
- 32 -
then, upon demand by the Issuing Bank or such Lender, the Borrower shall,
subject to Section 11.9 hereof, pay to the Issuing Bank or such Lender, from
------------
time to time as specified by the Issuing Bank or such Lender, additional amounts
that shall be sufficient to compensate the Issuing Bank or such Lender for such
increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower by the Issuing Bank or such Lender, shall include in
reasonable detail the basis for the demand for additional compensation and shall
be controlling for all purposes, absent manifest error. The obligations of the
Borrower under this Section 2.16(d) shall survive termination of this Agreement.
---------------
The Issuing Bank or any Lender claiming any additional compensation under this
Section 2.16(d) shall use reasonable efforts (consistent with legal and
---------------
regulatory restrictions) to reduce or eliminate any such additional compensation
which may thereafter accrue and which efforts would not, in the sole discretion
of the Issuing Bank or such Lender, be otherwise disadvantageous.
(e) Obligations Absolute. The obligations of the Borrower under this
--------------------
Agreement with respect to any Letter of Credit, any Letter of Credit Agreement
and any other agreement or instrument relating to any Letter of Credit or any
Advance pursuant to Section 2.16(c) hereof shall be unconditional and
---------------
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of this Agreement, any
other Loan Document, any Letter of Credit Agreement, any Letter of Credit
or any other agreement or instrument relating thereto (collectively, the
"L/C Related Documents");
(ii) (A) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations of the Borrower in respect
of the Letters of Credit or any Advance pursuant to Section 2.16(c) hereof
---------------
or (B) any other amendment or waiver of or any consent to departure from
all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank, any
Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C Related Documents or any
unrelated transaction;
(iv) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not comply with the terms
of such Letter of Credit, except for any payment made upon the Issuing
Bank's gross negligence or willful misconduct;
- 33 -
(vi) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any
Subsidiary Guaranty or any other guarantee, for all or any of the
Obligations of the Borrower in respect of the Letters of Credit or any
Advance pursuant to Section 2.16(c) hereof; or
---------------
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor, other than the Issuing's Bank
gross negligence or wilful misconduct.
(f) Compensation for Standby Letters of Credit.
------------------------------------------
(i) Credit Fee. Subject to Section 11.9 hereof, the Borrower shall
---------- ------------
pay to the Administrative Lender for the account of each Lender a fee
(which shall accrue beginning on the Agreement Date and shall be payable
quarterly in arrears on each Quarterly Date and on the Maturity Date) on
the average daily amount available for drawing under all outstanding
Standby Letters of Credit at the following per annum percentages,
applicable in the following situations:
Applicability Percentage
------------- ----------
(a) The Fixed Charge Coverage Ratio is less than 2.25 1.000
to 1
(b) The Fixed Charge Coverage Ratio is greater than 0.875
or equal to 2.25 to 1 but less than 3.00 to 1
(c) The Fixed Charge Coverage Ratio is greater than 0.750
or equal to 3.00 to 1 but less than 3.75 to 1
(d) The Fixed Charge Coverage Ratio is greater than 0.625
or equal to 3.75 to 1 but less than 4.50 to 1
(e) the Fixed Charge Coverage Ratio is greater than or 0.500
equal to 4.50 to 1
The fee payable in respect of the Standby Letters of Credit shall be
subject to reduction or increase, as applicable and as set forth in the
table above, on a quarterly basis according to the performance of the
Borrower as tested by using the Fixed Charge Coverage Ratio as of the end
of the most recent Fiscal Quarter (calculated for the twelve Fiscal Periods
preceding the date of determination). Any such increase or reduction in
such fee shall be effective on the date of receipt by the Lenders of the
financial statements required pursuant to Section 6.1 or 6.2, as
----------- ---
applicable, hereof and the Compliance Certificate required pursuant to
Section 6.3 hereof. If such financial statements and Compliance Certificate
-----------
are not received by the date required, the fee payable in respect of the
Letters of Credit shall be determined as if the Fixed Charge
- 34 -
Coverage Ratio is less than 2.25 to 1 until such time as such financial
statements and Compliance Certificate are received. Notwithstanding the
above, until such time as the Lenders shall have received the financial
statements required for the second Fiscal Quarter of the Borrower's 1997
Fiscal Year and related Compliance Certificate, the fee payable in respect
of the Letters of Credit shall be determined as if the Fixed Charge
Coverage Ratio is greater than or equal to 3.00 to 1 but less than 3.75 to
1. Subject to Section 11.9 hereof, such fee shall be computed on the basis
------------
of a 360-day year for the actual number of days elapsed.
(ii) Issuance Fee. Subject to Section 11.9 hereof, the Borrower shall
------------ ------------
pay to the Administrative Lender for the account of the Issuing Bank an
issuance fee (which fee shall accrue beginning on the Agreement Date and
shall be payable quarterly in arrears on each Quarterly Date and on the
Maturity Date) equal to 0.125% per annum of the average daily amount
available for drawing under all outstanding Standby Letters of Credit,
which issuance fee, subject to Section 11.9 hereof, shall be computed on
------------
the basis of a 360-day year for the actual number of days elapsed.
(g) Compensation for Commercial Letters of Credit.
---------------------------------------------
(i) Credit Fee. Subject to Section 11.9 hereof, the Borrower shall
---------- ------------
pay to the Administrative Lender for the pro rata account of each Lender a
credit fee (which shall be payable on the date of issuance of each
Commercial Letter of Credit) equal to 0.30% per annum of the amount of each
such Commercial Letter of Credit.
(ii) Issuance Fee. Subject to Section 11.9 hereof, the Borrower shall
------------ ------------
pay to the Administrative Lender for the account of the Issuing Bank an
issuance fee (which shall be payable on the date of issuance of each
Commercial Letter of Credit) in the amount of $250.
(h) L/C Cash Collateral Account.
---------------------------
(i) Upon the occurrence of an Event of Default and demand by the
Administrative Lender pursuant to Section 8.2(c) hereof, the Borrower will
--------------
promptly pay to the Administrative Lender in immediately available funds an
amount equal to the maximum amount then available to be drawn under the
Letters of Credit then outstanding. Any amounts so received by the
Administrative Lender shall be deposited by the Administrative Lender in a
deposit account maintained by the Issuing Bank (the "L/C Cash Collateral
Account").
(ii) As security for the payment of all Reimbursement Obligations and
for any other Obligations, the Borrower hereby grants, conveys, assigns,
pledges, sets over and transfers to the Administrative Lender (for the
benefit of the Issuing Bank and Lenders), and creates in the Administrative
Lender's favor (for the benefit of the Issuing Bank and Lenders) a Lien in,
all money, instruments and securities at any time held in or acquired
- 35 -
in connection with the L/C Cash Collateral Account, together with all
proceeds thereof. The L/C Cash Collateral Account shall be under the sole
dominion and control of the Administrative Lender and the Borrower shall
have no right to withdraw or to cause the Administrative Lender to withdraw
any funds deposited in the L/C Cash Collateral Account. At any time and
from time to time, upon the Administrative Lender's request, the Borrower
promptly shall execute and deliver any and all such further instruments and
documents, including UCC financing statements, as may be necessary,
appropriate or desirable in the Administrative Lender's judgment to obtain
the full benefits (including perfection and priority) of the security
interest created or intended to be created by this paragraph (ii) and of
the rights and powers herein granted. The Borrower shall not create or
suffer to exist any Lien on any amounts or investments held in the L/C Cash
Collateral Account other than the Lien granted under this paragraph (ii)
and Liens arising by operation of Law and not by contract which secure
amounts not yet due and payable.
(iii) The Administrative Lender shall (A) apply any funds in the L/C
Cash Collateral Account on account of Reimbursement Obligations when the
same become due and payable if and to the extent that the Borrower shall
fail directly to pay such Reimbursement Obligations and (B) after the
Maturity Date, apply any proceeds remaining in the L/C Cash Collateral
Account first to pay any unpaid Obligations then outstanding hereunder and
-----
then to refund any remaining amount to the Borrower.
----
(iv) The Borrower, no more than once in any calendar month, may direct
the Administrative Lender to invest the funds held in the L/C Cash
Collateral Account (so long as the aggregate amount of such funds exceeds
any relevant minimum investment requirement) in (A) direct obligations of
the United States or any agency thereof, or obligations guaranteed by the
United States or any agency thereof and (B) one or more other types of
investments permitted by the Determining Lenders, in each case with such
maturities as the Borrower, with the consent of the Determining Lenders,
may specify, pending application of such funds on account of Reimbursement
Obligations or on account of other Obligations, as the case may be. In the
absence of any such direction from the Borrower, the Administrative Lender
shall invest the funds held in the L/C Cash Collateral Account (so long as
the aggregate amount of such funds exceeds any relevant minimum investment
requirement) in one or more types of investments with the consent of the
Determining Lenders with such maturities as the Borrower, with the consent
of the Determining Lenders, may specify, pending application of such funds
on account of Reimbursement Obligations or on account of other Obligations,
as the case may be. All such investments shall be made in the
Administrative Lender's name for the account of the Lenders, subject to the
ownership interest therein of the Borrower. The Borrower recognizes that
any losses or taxes with respect to such investments shall be borne solely
by the Borrower, and the Borrower agrees to hold the Administrative Lender
and the Lenders harmless from any and all such losses and taxes.
Administrative Lender may liquidate any investment held in the L/C Cash
Collateral Account in order to apply the proceeds of such investment on
account of the Reimbursement Obligations (or on account of any other
Obligation then due and payable, as the case may be) without
- 36 -
regard to whether such investment has matured and without liability for any
penalty or other fee incurred (with respect to which the Borrower hereby
agrees to reimburse the Administrative Lender) as a result of such
application.
(v) After the establishment of the L/C Cash Collateral Account
pursuant to Section 2.16(h)(i) hereof, the Borrower shall pay to the
------------------
Administrative Lender the fees customarily charged by the Issuing Bank with
respect to the maintenance of accounts similar to the L/C Cash Collateral
Account.
Section 2.17 Extension of Maturity Date. The Borrower may notify the
--------------------------
Administrative Lender in writing by December 1 of each year while this Agreement
is in effect, commencing December 1, 1997, of its desire to extend the Maturity
Date for an additional 12 months beyond the then present Maturity Date. If such
notice is given by the Borrower, the Administrative Lender, by the immediately
following February 1 of each year while this Agreement is in effect will notify
the Borrower in writing of the Lenders' decision whether to extend the Maturity
Date. Extension of the Maturity Date shall be at the sole option and discretion
of the Lenders, and the decision to extend the Maturity Date shall require the
consent of all Lenders. If either the Borrower or the Administrative Lender
fail to give notice within the time prescribed above, the Maturity Date shall be
the then present Maturity Date. An extension of the Maturity Date pursuant to
this Section 2.17 shall not require any renewal Note or amendment of or
------------
supplement to this Agreement or any other Loan Document.
ARTICLE 3.
Conditions Precedent
--------------------
Section 3.1 Conditions Precedent to Closing, the Initial Advance and the
------------------------------------------------------------
Initial Letters of Credit. The obligation of each Lender to sign this Agreement
-------------------------
and to make the initial Advance and the obligation of the Issuing Bank to issue
the initial Letter of Credit are subject to receipt by the Administrative Lender
of each of the following, in form and substance satisfactory to each Lender,
with a copy (except for the Notes) for each Lender:
(a) A loan certificate of the Borrower certifying as to the accuracy of its
representations and warranties in the Loan Documents, certifying that no Default
has occurred, and including a certificate of incumbency with respect to each
Authorized Signatory, and including (i) a copy of the Certificate of
Incorporation of the Borrower, certified to be true, complete and correct by the
secretary of state of its state of incorporation, (ii) a copy of the By-Laws of
the Borrower, as in effect on the Agreement Date, (iii) a copy of the
resolutions of the Board of Directors of the Borrower authorizing it to execute,
deliver and perform this Agreement, the Notes and the other Loan Documents to
which it is a party, and (iv) a copy of a certificate of good standing and a
certificate of existence for its state of incorporation and each state in which
it is qualified to do business;
- 37 -
(b) a certificate of an officer acceptable to the Lenders of each
Subsidiary, certifying as to the incumbency of the officers signing the Loan
Documents to which it is a party, and including (i) a copy of its Certificate of
Incorporation, partnership agreement, trust agreement or other governing
documents, as applicable, certified as true, complete and correct by the
secretary of state of its state of incorporation or creation, (ii) if
applicable, a copy of its By-Laws, as in effect on the Agreement Date, (iii) a
copy of the resolutions or other appropriate authorization authorizing it to
execute, deliver and perform the Loan Documents to which it is a party, and (iv)
if applicable, a copy of a certificate of good standing and a certificate of
existence for its state of incorporation or creation and each state in which it
is qualified to do business;
(c) a duly executed Note payable to the order of each Lender and in an
amount for each Lender equal to its Specified Percentage of the Commitment,
respectively;
(d) opinion of counsel to the Borrower and each Subsidiary addressed to the
Lenders and in form and substance satisfactory to the Lenders, dated the
Agreement Date, and covering the matters set forth in Sections 4.1(a), (b), (c),
--------------- --- ---
(h), (m), (n) and (p) hereof and such other matters incident to the transactions
--- --- --- ---
contemplated hereby as the Administrative Lender or Special Counsel may
reasonably request;
(e) reimbursement for the Administrative Lender for Special Counsel's
reasonable and customary fees (on an hourly basis) and expenses rendered through
the date hereof;
(f) evidence that all corporate, partnership or trust proceedings of the
Borrower and Subsidiaries taken in connection with the transactions contemplated
by this Agreement and the other Loan Documents shall be reasonably satisfactory
in form and substance to the Lenders and Special Counsel; and the Lenders shall
have received copies of all documents or other evidence which the Administrative
Lender, Special Counsel or any Lender may reasonably request in connection with
such transactions;
(g) any fees required to be paid pursuant to the Fee Letter;
(h) a duly executed and completed Subsidiary Guaranty, dated as of the
Agreement Date;
(i) a duly executed and completed Subordination Agreement, dated as of the
Agreement Date;
(j) simultaneously with the making of the initial Advance, executed UCC-3
Termination Statements to be filed in appropriate jurisdictions to terminate all
Liens against assets of the Borrower and its Subsidiaries other than Permitted
Liens;
(k) the fees required to be paid pursuant to Section 2.4(b) hereof;
--------------
- 38 -
(l) all amounts owed under the Existing Credit Agreement, whereupon the
Existing Credit Agreement shall automatically terminate and be of no further
force or effect, except that the Existing Letters of Credit shall be deemed to
be Letters of Credit issued pursuant to the Letter of Credit Facility provided
for in this Agreement; and
(m) in form and substance reasonably satisfactory to the Lenders and
Special Counsel, such other documents, instruments and certificates as the
Administrative Lender or any Lender may reasonably require in connection with
the transactions contemplated hereby, including without limitation, a Compliance
Certificate, appropriately completed, the status, organization or authority of
the Borrower or any Subsidiary, the enforceability of the Obligations and the
status of the Borrower's information and inventory control systems.
Section 3.2 Conditions Precedent to All Advances and Letters of Credit.
----------------------------------------------------------
The obligation of each Lender to make each Advance hereunder and the obligation
of the Issuing Bank to issue each Letter of Credit is subject to fulfillment of
the following conditions immediately prior to or contemporaneously with each
such Advance:
(a) With respect to Advances other than Refinancing Advances and each
issuance of a Letter of Credit, all of the representations and warranties of the
Borrower under this Agreement, which, pursuant to Section 4.2 hereof, are made
-----------
at and as of the time of such Advance, shall be true and correct at such time in
all material respects, both before and after giving effect to the application of
the proceeds of the Advance;
(b) The incumbency of the Authorized Signatories shall be as stated in the
certificate of incumbency delivered in the Borrower's loan certificate pursuant
to Section 3.1(a) hereof or as subsequently modified and reflected in a
--------------
certificate of incumbency delivered to the Administrative Lender. The Lenders
may, without waiving this condition, consider it fulfilled and a representation
by the Borrower made to such effect if no written notice to the contrary, dated
on or before the date of such Advance, is received by the Administrative Lender
from the Borrower prior to the making of such Advance;
(c) There shall not exist a Default hereunder, with respect to Advances
other than Refinancing Advances and with respect to the issuance of each Letter
of Credit, or an Event of Default, with respect to any Refinancing Advance, and,
with respect to each Advance other than a Refinancing Advance, the
Administrative Lender shall have received written or telephonic certification
thereof by an Authorized Signatory (which certification, if telephonic, shall be
followed promptly by written certification);
(d) The aggregate Advances and Letters of Credit, after giving effect to
such proposed Advance or Letter of Credit, shall not exceed the maximum
principal amount then permitted to be outstanding hereunder; and
- 39 -
(e) The Administrative Lender shall have received all such other
certificates, reports, statements, opinions of counsel or other documents as the
Administrative Lender or any Lender may reasonably request.
ARTICLE 4.
Representations and Warranties
------------------------------
Section 4.1 Representations and Warranties. The Borrower hereby represents
------------------------------
and warrants to each Lender as follows:
(a) Organization; Power; Qualification. As of the Agreement Date, the
----------------------------------
respective jurisdiction of incorporation or organization and percentage
ownership by the Borrower or another Subsidiary of the Subsidiaries listed on
Schedule 4 are true and correct. Each of the Borrower and its Subsidiaries is a
----------
corporation, partnership, business trust or other legal Person duly organized,
validly existing and in good standing under the laws of its state of
organization. Each of the Borrower and its Subsidiaries has the corporate or
other legal power and authority to own its properties and to carry on its
business as now being and hereafter proposed to be conducted. Each of the
Borrower and its Subsidiaries is duly qualified and in good standing as set
forth in Schedule 8 and authorized to do business as set forth in Schedule 9 and
---------- ----------
no qualification or authorization is necessary in any other jurisdictions in
which the character of its properties or the nature of its business requires
such qualification or authorization except where the failure to be so qualified
or authorized would not have a Material Adverse Effect.
(b) Authorization. The Borrower has corporate power and has taken all
-------------
necessary corporate action to authorize it to borrow hereunder. Each of the
Borrower and its Subsidiaries has corporate or other legal power and has taken
all necessary corporate or other legal action to execute, deliver and perform
the Loan Documents to which it is party in accordance with the terms thereof,
and to consummate the transactions contemplated thereby. Each Loan Document has
been duly executed and delivered by the Borrower or the Subsidiary executing it.
Each of the Loan Documents to which the Borrower and its Subsidiaries are party
is a legal, valid and binding respective obligation of the Borrower or the
Subsidiary, as applicable, enforceable in accordance with its terms, subject, as
to enforcement of remedies, to the following qualifications: (i) equitable
principles generally, and (ii) Debtor Relief Laws (insofar as any such law
relates to the bankruptcy, insolvency or similar event of the Borrower or any
Subsidiary).
(c) Compliance with Other Loan Documents and Contemplated Transactions. The
------------------------------------------------------------------
execution, delivery and performance by the Borrower and its Subsidiaries of the
Loan Documents to which they are respectively a party, and the consummation of
the transactions contemplated thereby, do not and will not (i) require any
consent or approval not already obtained except as shown on Schedule 7, (ii)
----------
violate any Applicable Law, (iii) conflict with, result in a breach of, or
constitute a default under the certificate of incorporation, by-laws,
- 40 -
partnership agreement, trust agreement or other governance document of the
Borrower or any Subsidiary, (iv) conflict with, result in a breach of, or
constitute a default under any Necessary Authorization, indenture, agreement or
other instrument, to which the Borrower or any Subsidiary is a party or by which
they or their respective properties may be bound except as shown on Schedule 7,
----------
or (iv) result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by the Borrower or any
Subsidiary, except Permitted Liens.
(d) Business. The Borrower and its Subsidiaries are engaged primarily
--------
in the sale, assembly, repair and distribution of computer hardware, computer
accessories and software products, consumer electronic products, general office
business equipment and related telecommunications and multi-media electronics
products and equipment, and other products, training and services that are
related to or complementary to all or any of the foregoing; provided, however,
Subsidiaries of the Borrower may engage in Securitizations permitted by Section
-------
7.4(a)(iii) hereof and activities related to such Securitizations, provided that
-----------
any Subsidiary that engages in such Securitizations shall engage in no other
business.
(e) Licenses, etc. All Necessary Authorizations have been duly obtained,
-------------
and are in full force and effect without any known conflict with the rights of
others and free from any unduly burdensome restrictions. The Borrower and its
Subsidiaries are and will continue to be in compliance in all material respects
with all provisions thereof. No circumstance exists which might impair the
utility of the Necessary Authorization or the right to renew such Necessary
Authorization the effect of which would have a Material Adverse Effect. No
Necessary Authorization is the subject of any pending or, to the best of the
Borrower's knowledge, threatened challenge, suspension, cancellation or
revocation.
(f) Compliance with Law. The Borrower and its Subsidiaries are in
-------------------
compliance in all respects with all Applicable Laws, except where the failure to
so comply would not have a Material Adverse Effect, taken as a whole.
(g) Title to Properties. The Borrower and its Subsidiaries have good and
-------------------
indefeasible title to, or a valid leasehold interest in, all of their material
assets. None of their material assets are subject to any Liens, except Permitted
Liens. No financing statement or other Lien filing (except relating to Permitted
Liens) is on file in any state or jurisdiction that names the Borrower or any of
its Subsidiaries as debtor or covers (or purports to cover) any assets of the
Borrower or any of its Subsidiaries. The Borrower and its Subsidiaries have not
signed any such financing statement or filing, nor any security agreement
authorizing any Person to file any such financing statement or filing (except
relating to Permitted Liens).
(h) Litigation. Except as reflected on Schedule 3 hereto, there is no
---------- ----------
action, suit or proceeding pending against, or, to the Borrower's current actual
knowledge, threatened against the Borrower, or in any other manner relating
directly and adversely to the Borrower or any of its Subsidiaries, or any of
their properties, in any court or before any arbitrator of any kind or before or
by any governmental body which could reasonably be expected to result in the
- 41 -
payment of $5,000,000 or more by the Borrower or any of its Subsidiaries (after
deducting the amount with respect to which the Borrower or any Subsidiary is
insured).
(i) Taxes. All federal, state and other tax returns of the Borrower
-----
and its Subsidiaries required by law to be filed have been duly filed or
extensions have been timely filed, and all federal, state and other taxes,
assessments and other governmental charges or levies upon the Borrower, its
Subsidiaries or any of their properties, income, profits and assets, which are
due and payable, have been paid, unless the same are being diligently contested
in good faith by appropriate proceedings, with adequate reserves established
therefor, and no Lien (other than a Permitted Lien) has attached and no
foreclosure, distraint, sale or similar proceedings have been commenced. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of their taxes are, in the judgment of the Borrower, adequate.
(j) Financial Statements; Material Liabilities. The Borrower has
------------------------------------------
furnished or caused to be furnished to the Lenders copies of its June 29, 1996
annual financial statements and September 28, 1996 quarterly financial
statements, which are prepared in good faith and complete in all material
respects and present fairly in accordance with GAAP on a consolidated basis the
financial position of the Borrower and its Subsidiaries as at such dates and the
results of operations for the periods then ended. The Borrower and its
Subsidiaries taken as a whole have no material liabilities, contingent or
otherwise, nor material losses, except as (i) set forth in the June 29, 1996
audited annual financial statements and September 28, 1996 quarterly financial
statements, and Borrower's Form 10-K and 10-Q for such respective periods, and
(ii) shown on Schedule 3 hereto.
----------
(k) No Adverse Change. Since June 29, 1996, no event or circumstance
-----------------
has occurred or arisen that could be classified as a Material Adverse Effect.
(l) ERISA. None of the Borrower nor any member of its Controlled Group
-----
maintains or contributes to any Plan other than those disclosed to the
Administrative Lender in writing. Each such Plan (other than any Multiemployer
Plan) is in compliance with the applicable provisions of ERISA, the Code, and
any other applicable Federal or state law, rule or regulation, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. With respect to each Plan (other than any Multiemployer Plan) of the
Borrower and each member of its Controlled Group, all reports required under
ERISA or any other Applicable Law to be filed with any governmental authority,
the failure of which to file could reasonably be expected to have a Material
Adverse Effect, have been duly filed. All such reports are true and correct in
all respects as of the date given, except where any error could not reasonably
be expected to have a Material Adverse Effect. No Plan of the Borrower or any
member of its Controlled Group has been terminated under Section 4041(c) of
ERISA nor has any accumulated funding deficiency (as defined in Section 412(a)
of the Code) been incurred (without regard to any waiver granted under Section
412 of the Code), nor has any funding waiver from the Internal Revenue Service
been received or requested the result of which could reasonably be expected to
have a Material Adverse Effect. None of the Borrower or any member of its
Controlled Group has failed to make any contribution or pay any amount due or
- 42 -
owing as required under the terms of any such Plan, or by Section 412 of the
Code or Section 302 of ERISA by the due date under Section 412 of the Code and
Section 302 of ERISA the result of which could reasonably be expected to have a
Material Adverse Effect. There has been no ERISA Event or any event requiring
disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any
Plan or its related trust of the Borrower or any member of its Controlled Group
since the formation of the Borrower which could reasonably be expected to have a
Material Adverse Effect. The present value of the benefit liabilities, as
defined in Title IV of ERISA, of each Plan subject to Title IV of ERISA (other
than a Multiemployer Plan) of the Borrower and each member of its Controlled
Group does not exceed the present value of the assets of each such Plan as of
the most recent valuation date using each such Plan's actuarial assumptions at
such date by an amount which could reasonably be expected to have a Material
Adverse Effect. There are no pending, or to the best of the Borrower's knowledge
threatened, claims, lawsuits or actions (other than routine claims for benefits
in the ordinary course) asserted or instituted against, and neither the Borrower
nor any member of its Controlled Group has knowledge of any threatened
litigation or claims against, the assets of any Plan or its related trust or
against any fiduciary of a Plan with respect to the operation of such Plan the
result of which could reasonably be expected to have a Material Adverse Effect.
None of the Borrower or, to the best of the Borrower's knowledge, any member of
its Controlled Group, has engaged in any prohibited transactions, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, in connection with
any Plan the result of which could reasonably be expected to have a Material
Adverse Effect. None of the Borrower or any member of its Controlled Group has
withdrawn from any Multiemployer Plan, nor has incurred or reasonably expects to
incur (A) any liability under Title IV of ERISA (other than premiums due under
Section 4007 of ERISA to the PBGC), (B) any withdrawal liability (and no event
has occurred which with the giving of notice under Section 4219 of ERISA would
result in such liability) under Section 4201 of ERISA as a result of a complete
or partial withdrawal (within the meaning of Section 4203 or 4205 of ERISA) from
a Multiemployer Plan, or (C) any liability under Section 4062 of ERISA to the
PBGC or to a trustee appointed under Section 4042 of ERISA which, in each such
instance or in the aggregate, could reasonably be expected to have a Material
Adverse Effect. None of the Borrower, any member of its Controlled Group, or any
organization to which the Borrower or any member of its Controlled Group is a
successor or parent corporation within the meaning of ERISA Section 4069(b), has
engaged in a transaction within the meaning of ERISA Section 4069 the result of
which could reasonably be expected to have a Material Adverse Effect. None of
the Borrower or any member of its Controlled Group maintains or has established
any Plan which is a welfare benefit plan within the meaning of Section 3(1) of
ERISA and which provides for continuing benefits or coverage for any participant
or any beneficiary of any participant after such participant's termination of
employment, except as may be required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), which, in each such instance
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect. Each of Borrower and its Controlled Group which maintains a Plan which
is a welfare benefit plan within the meaning of Section 3(1) of ERISA has
complied in all material respects with any applicable notice and continuation
requirements of COBRA and the regulations thereunder, except where the failure
to so comply could not reasonably be expected to have a Material Adverse Effect.
None of the Borrower or any
- 43 -
member of its Controlled Group maintains, has established, or has ever
participated in a multiemployer welfare benefit arrangement within the meaning
of Section 3(40)(A) of ERISA.
(m) Compliance with Regulations G, T, U and X. The Borrower is not
-----------------------------------------
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System, and no part of the proceeds of the Advances will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. No assets of the Borrower
and its Subsidiaries are margin stock. None of the Borrower and its
Subsidiaries nor any agent acting on their behalf, have taken or will knowingly
take any action which might cause this Agreement or any other Loan Documents to
violate any regulation of the Board of Governors of the Federal Reserve System
or to violate the Securities Exchange Act of 1934, in each case as in effect now
or as the same may hereafter be in effect.
(n) Governmental Regulation. The Borrower and its Subsidiaries are not
-----------------------
required to obtain any Necessary Authorization that has not already been
obtained from, or effect any material filing or registration that has not
already been effected with, any federal, state or local regulatory authority in
connection with the execution and delivery of this Agreement or any other Loan
Document, or the performance thereof, in accordance with their respective terms,
including any borrowings hereunder.
(o) Absence of Default. The Borrower and its Subsidiaries are in
------------------
compliance in all material respects with all of the provisions of their
certificate of incorporation, by-laws, partnership agreement, trust agreement or
other governing document, and no event has occurred or failed to occur, which
has not been remedied or waived, the occurrence or non-occurrence of which
constitutes, or which with the passage of time or giving of notice or both would
constitute, (i) an Event of Default or (ii) a default by the Borrower or any of
its Subsidiaries under any material indenture, agreement or other instrument, or
any judgment, decree or order to which the Borrower or any of its Subsidiaries
or by which they or any of their material properties is bound.
(p) Investment Company Act. The Borrower is not required to register
----------------------
under the provisions of the Investment Company Act of 1940, as amended. Neither
the entering into or performance by the Borrower of this Agreement nor the
issuance of the Notes violates any provision of such act or requires any
consent, approval, or authorization of, or registration with, the Securities and
Exchange Commission or any other governmental or public body of authority
pursuant to any provisions of such act.
(q) Environmental Matters. Neither the Borrower nor any Subsidiary has any
---------------------
current actual knowledge that any substance deemed hazardous by any Applicable
Environmental Law, has been installed (i) on any real property fee title to
which is now owned by the Borrower or any of its Subsidiaries or (ii) by
Borrower or any of its Subsidiaries on any real property leased by the Borrower
or any of its Subsidiaries, in either case in a manner which does not comply
- 44 -
with Applicable Environmental Laws. The Borrower and its Subsidiaries are not in
material violation of or subject to any existing, pending or, to the best of the
Borrower's knowledge, threatened investigation or inquiry by any governmental
authority or to any material remedial obligations under any Applicable
Environmental Laws. The Borrower and its Subsidiaries have not obtained and are
not required to obtain any permits, licenses or similar authorizations other
than certificates of occupancy and building permits to construct, occupy,
operate or use any buildings, improvements, fixtures, and equipment forming a
part of any real property owned or leased by the Borrower or any Subsidiary by
reason of any Applicable Environmental Laws. The Borrower and its Subsidiaries
undertook, at the time of acquisition of fee title to any real property,
reasonable inquiry into the previous ownership and uses of such real property
consistent with good commercial or customary practice. The Borrower and its
Subsidiaries have taken reasonable steps to determine, and the Borrower and its
Subsidiaries have no current actual knowledge, that any hazardous substances or
solid wastes have been disposed of or otherwise released (i) on or to the real
property fee title to which is owned by the Borrower or any of its Subsidiaries
or (ii) by Borrower or any of its Subsidiaries on or to any real property leased
by Borrower or any of its Subsidiaries, all within the meaning of the Applicable
Environmental Laws.
(r) Certain Fees. No broker's, finder's or other fee or commission will be
------------
payable by the Borrower (other than to the Lenders hereunder) with respect to
the making of the Commitments or the Advances hereunder. The Borrower agrees to
indemnify and hold harmless the Administrative Lender and each Lender from and
against any claims, demand, liability, proceedings, costs or expenses asserted
with respect to or arising in connection with any such fees or commissions.
(s) Necessary Authorizations. No event has occurred which permits (or
------------------------
with the passage of time would permit) the revocation or termination of any
Necessary Authorization, or which could result in the imposition of any
restriction thereon of such a nature that could reasonably be expected to be
classified as a Material Adverse Effect.
(t) Intellectual Property. The Borrower and its Subsidiaries have
---------------------
collectively obtained or applied for all patents, trademarks, service marks,
trade names, copyrights, licenses and other rights, free from burdensome
restrictions, that the Borrower deems necessary for the operation of their
business as presently conducted and as proposed to be conducted. Except as
disclosed to the Lenders in writing on or prior to the Agreement Date, nothing
has come to the current actual knowledge of the Borrower or any of its
Subsidiaries to the effect that (i) any process, method, part or other material
presently contemplated to be employed by the Borrower or any Subsidiary may
infringe any valid and/or enforceable patent, trademark, service xxxx, trade
name, copyright and/or license or other right owned by any other Person, or (ii)
there is pending or overtly threatened any claim or litigation against or
affecting the Borrower or any Subsidiary contesting its right to sell or use any
such process, method, part or other material, which if determined adversely to
the Borrower or any Subsidiary could reasonably be expected to be classified as
a Material Adverse Effect.
- 45 -
(u) Disclosure. Neither this Agreement nor any other document, certificate
----------
or statement which has been furnished to any Lender by or on behalf of the
Borrower or any Subsidiary in connection herewith contained any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statement contained herein and therein not misleading at the time it
was furnished. There is no fact known to the Borrower and not known to the
public generally that could reasonably be expected to materially adversely
affect the assets or business of the Borrower and its Subsidiaries, or in the
future could reasonably be expected (so far as the Borrower can now reasonably
foresee) to have a Material Adverse Effect, which has not been set forth in this
Agreement or in the documents, certificates and statements furnished to the
Lenders by or on behalf of the Borrower prior to the date hereof in connection
with the transaction contemplated hereby.
(v) Solvency. The Borrower is, and Borrower and its Subsidiaries on a
--------
consolidated basis are, Solvent.
(w) Common Enterprise. The Borrower and its Subsidiaries are engaged in the
-----------------
businesses set forth in Section 4.1(d) hereof. These operations require
--------------
financing on a basis such that the credit supplied can be made available from
time to time to the Borrower and various of the Subsidiaries, as required for
the continued successful operation of the Borrower and its Subsidiaries as a
whole. The Borrower has requested Lenders to make credit available hereunder
primarily for the purposes of financing the operations of the Borrower and its
Subsidiaries. The Borrower and its Subsidiaries expect to derive benefit (and
the boards of directors or other governing body of the Borrower and its
Subsidiaries have determined that the Subsidiaries may reasonably be expected to
derive benefit), directly or indirectly, from the credit extended by Lenders
hereunder, both in their separate capacities and as members of the group of
companies, since the successful operation and condition of the Borrower and its
Subsidiaries is dependent on the continued successful performance of the
functions of the group as a whole.
Section 4.2 Survival of Representations and Warranties, etc. All
-----------------------------------------------
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date and at and
as of the date of each Advance, and each shall be true and correct when made,
except to the extent (a) previously fulfilled in accordance with the terms
hereof, (b) applicable to a specific date or otherwise subsequently
inapplicable, or (c) previously waived in writing by the Determining Lenders
with respect to any particular factual circumstance. All such representations
and warranties shall survive, and not be waived by, the execution hereof by any
Lender, any investigation or inquiry by any Lender, or by the making of any
Advance under this Agreement.
- 46 -
ARTICLE 5.
General Covenants
-----------------
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
---------------------------------------------
shall, and shall cause each Subsidiary to:
(a) preserve and maintain, or timely obtain and thereafter preserve and
maintain, its existence, rights, franchises, licenses, authorizations, consents,
privileges and all other Necessary Authorizations from federal, state and local
governmental bodies and any tribunal (regulatory or otherwise), the loss of
which could have a Material Adverse Effect; and
(b) qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization, unless the failure to do
so could not have a Material Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower
----------------------------------------
and its Subsidiaries shall (a) engage primarily in the businesses set forth in
Section 4.1(d) hereof, and (b) comply in all material respects with the
--------------
requirements of all Applicable Law.
Section 5.3 Maintenance of Properties. The Borrower shall, and shall
-------------------------
cause each Subsidiary to, maintain or cause to be maintained all its properties
(whether owned or held under lease) in reasonably good repair, working order and
condition, taken as a whole, and from time to time make or cause to be made all
appropriate (in the reasonable judgment of the Borrower) repairs, renewals,
replacements, additions, betterments and improvements thereto.
Section 5.4 Accounting Methods and Financial Records. The Borrower
----------------------------------------
shall, and shall cause each Subsidiary to, maintain a system of accounting
established and administered in accordance with GAAP, keep adequate records and
books of account in which complete entries will be made and all transactions
reflected in accordance with GAAP, and keep accurate and complete records of its
respective assets. The Borrower and each of its Subsidiaries shall maintain a
fiscal year ending on the last Saturday of June.
Section 5.5 Insurance. The Borrower shall, and shall cause each
---------
Subsidiary to, maintain insurance from responsible companies in such amounts and
against such risks as shall be customary and usual in the industry for companies
of similar size and capability, but in no event less than the amount and types
of risks insured as of the Agreement Date. Each insurance policy shall provide
for at least 30 days' prior notice to the Administrative Lender of any proposed
termination or cancellation of such policy, whether on account of default or
otherwise.
- 47 -
Section 5.6 Payment of Taxes and Claims. The Borrower shall, and shall
---------------------------
cause each Subsidiary to, pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or its income or properties prior
to the date on which penalties attach thereto, and all lawful material claims
for labor, materials and supplies which, if unpaid, might become a Lien upon any
of its properties; except that no such tax, assessment, charge, levy or claim
need be paid which is being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on the
appropriate books, but only so long as no Lien (other than a Permitted Lien)
shall attach with respect thereto and no foreclosure, distraint, sale or similar
proceedings shall have been commenced. The Borrower shall, and shall cause each
Subsidiary to, timely file all information returns (or extensions of such filing
deadlines) required by federal, state or local tax authorities.
Section 5.7 Visits and Inspections. The Borrower shall, and shall cause
----------------------
each Subsidiary to, promptly permit representatives of the Administrative Lender
or any Lender from time to time after notice by the Administrative Lender or any
Lender no later than the previous Business Day to (a) visit and inspect the
properties of the Borrower and any Subsidiary as often as the Administrative
Lender or any Lender shall reasonably deem advisable, (b) audit, inspect and
make extracts from and copies of the Borrower's and each Subsidiary's books and
records, and (c) discuss with the Borrower's and each Subsidiary's directors,
officers, employees and auditors its business, assets, liabilities, financial
positions, results of operations and business prospects; provided, however,
-----------------
except as otherwise provided in the last sentence of this Section 5.7, the
-----------
Borrower's obligation to reimburse the Administrative Lender or any Lender for
expenses related to such inspections and audits shall not exceed in the
aggregate $10,000 per year. Prior to the occurrence of an Event of Default, all
such visits and inspections shall be conducted during normal business hours.
Following the occurrence and during the continuance of an Event of Default, (i)
such visits and inspections shall be conducted at any time requested by the
Administrative Lender or any Lender without any requirement for advance notice
and (ii) there shall be no limitation on the Borrower's liability for the
payment of reasonable expenses related to inspections and audits performed by
the Administrative Lender or any Lender.
Section 5.8 Payment of Indebtedness. Subject to Section 5.6 hereof, the
----------------------- -----------
Borrower shall, and shall cause each Subsidiary to, pay its Indebtedness when
and as the same becomes due, other than amounts (other than the Obligations)
duly and diligently disputed in good faith.
Section 5.9 Use of Proceeds. The Borrower shall use the proceeds of
---------------
Advances for working capital and for other general corporate purposes,
including, without limitation, (i) refinancing all outstanding debt (other than
in respect of the Existing Letters of Credit) under the Existing Credit
Agreement and (ii) repurchasing or redeeming the Senior Subordinated Notes in
part or in full.
- 48 -
SECTION 5.10 INDEMNITY.
---------
(A) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS
THE ADMINISTRATIVE LENDER, EACH LENDER, EACH OF THEIR RESPECTIVE AFFILIATES,
AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ATTORNEYS, SHAREHOLDERS AND CONSULTANTS(INCLUDING, WITHOUT
LIMITATION, THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR ATTEMPTED
SATISFACTION OF ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF THE FOREGOING
(COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS,
REASONABLE COSTS, REASONABLE EXPENSES AND REASONABLE DISBURSEMENTS OF ANY KIND
OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES IN CONNECTION WITH ANY
INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING, WHETHER OR NOT SUCH
INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL AND
WHETHER BASED ON ANY FEDERAL, STATE, OR LOCAL LAWS AND REGULATIONS, UNDER COMMON
LAW OR AT EQUITABLE CAUSE, OR ON CONTRACT, TORT OR OTHERWISE, ARISING FROM OR
CONNECTED WITH THE PAST, PRESENT OR FUTURE OPERATIONS OF THE BORROWER OR ANY
SUBSIDIARY OR THEIR RESPECTIVE PREDECESSORS IN INTEREST, OR THE PAST, PRESENT OR
FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF THE BORROWER OR ANY SUBSIDIARY),
IN ANY MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE LOAN DOCUMENTS,
OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT OR TRANSACTION RELATING
OR ATTENDANT THERETO, THE MANAGEMENT OF THE ADVANCES, INCLUDING IN CONNECTION
WITH, OR AS A RESULT, IN WHOLE OR IN PART, OF ANY NEGLIGENCE OF ADMINISTRATIVE
LENDER OR ANY LENDER (OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY BY A
PARTICIPANT AGAINST THE ADMINISTRATIVE LENDER OR ANY LENDER AND NOT THE
BORROWER), OR THE USE OR INTENDED USE OF THE PROCEEDS OF THE ADVANCES HEREUNDER,
OR IN CONNECTION WITH ANY INVESTIGATION OF ANY POTENTIAL MATTER COVERED HEREBY,
BUT EXCLUDING (I) ANY CLAIM OR LIABILITY THAT ARISES AS THE RESULT OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNITEE, AS FINALLY JUDICIALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION, AND (II) MATTERS RAISED BY ONE
LENDER AGAINST ANOTHER LENDER OR BY ANY SHAREHOLDERS OF A LENDER AGAINST A
LENDER OR ITS MANAGEMENT (COLLECTIVELY, "INDEMNIFIED MATTERS"). TO THE EXTENT
THAT ANY INDEMNIFIED MATTER INVOLVES ONE OR MORE INDEMNITEES, SUCH INDEMNITEES
SHALL USE THE SAME LEGAL COUNSEL UNLESS ANY
- 49 -
INDEMNITEE IN ITS REASONABLE DISCRETION DETERMINES THAT CONFLICTS EXIST OR MAY
ARISE IN CONNECTION WITH SUCH REPRESENTATION.
(B) IN ADDITION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST, REIMBURSE
EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL REASONABLE EXPENSES
(INCLUDING THE REASONABLE COST OF ANY INVESTIGATION AND PREPARATION) INCURRED IN
CONNECTION WITH ANY INDEMNIFIED MATTER. THE REIMBURSEMENT, INDEMNITY AND
CONTRIBUTION OBLIGATIONS UNDER THIS SECTION SHALL BE IN ADDITION TO ANY
LIABILITY WHICH THE BORROWER MAY OTHERWISE HAVE, SHALL EXTEND UPON THE SAME
TERMS AND CONDITIONS TO EACH INDEMNITEE, AND SHALL BE BINDING UPON AND INURE TO
THE BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES OF
THE BORROWER, THE ADMINISTRATIVE LENDER, THE LENDERS AND ALL OTHER INDEMNITEES.
THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE
OBLIGATIONS.
Section 5.11 Environmental Law Compliance. The use which the Borrower or
----------------------------
any Subsidiary intends to make of any real property which is owned or leased by
it will not result in the disposal or other release of any hazardous substance
or solid waste on or to such real property which is in violation of Applicable
Environmental Laws. As used herein, the terms "hazardous substance" and
"release" as used in this Section shall have the meanings specified in CERCLA
(as defined in the definition of Applicable Environmental Laws), and the terms
"solid waste" and "disposal" shall have the meanings specified in RCRA (as
defined in the definition of Applicable Environmental Laws); provided, however,
that if CERCLA or RCRA is amended so as to broaden or lessen the meaning of any
term defined thereby, such broader or lesser meaning shall apply subsequent to
the effective date of such amendment; and provided further, to the extent that
any other law applicable to the Borrower, any Subsidiary or any of their
properties establishes a meaning for "hazardous substance," "release," "solid
waste," or "disposal" which is broader or lesser than that specified in either
CERCLA or RCRA, such broader or lesser meaning shall apply. THE BORROWER AGREES
TO INDEMNIFY AND HOLD THE ADMINISTRATIVE LENDER AND EACH LENDER HARMLESS FROM
AND AGAINST, AND TO REIMBURSE THEM WITH RESPECT TO, ANY AND ALL CLAIMS, DEMANDS,
CAUSES OF ACTION, LOSS, DAMAGE, LIABILITIES, REASONABLE COSTS AND REASONABLE
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND COURTS COSTS) OF ANY KIND OR
CHARACTER, KNOWN OR UNKNOWN, FIXED OR CONTINGENT, ASSERTED AGAINST OR INCURRED
BY ANY OF THEM AT ANY TIME AND FROM TIME TO TIME BY REASON OF OR ARISING OUT OF
(A) THE FAILURE OF THE BORROWER OR ANY SUBSIDIARY TO PERFORM ANY OF THEIR
OBLIGATIONS HEREUNDER REGARDING ASBESTOS OR APPLICABLE ENVIRONMENTAL LAWS, (B)
ANY VIOLATION ON OR BEFORE THE RELEASE DATE OF ANY APPLICABLE ENVIRONMENTAL LAW
IN EFFECT ON OR BEFORE THE RELEASE DATE, AND (C) ANY ACT, OMISSION, EVENT OR
CIRCUMSTANCE EXISTING OR OCCURRING
- 50 -
ON OR PRIOR TO THE RELEASE DATE (INCLUDING WITHOUT LIMITATION THE PRESENCE ON
SUCH REAL PROPERTY OR RELEASE FROM SUCH REAL PROPERTY OF HAZARDOUS SUBSTANCES OR
SOLID WASTES DISPOSED OF OR OTHERWISE RELEASED ON OR PRIOR TO THE RELEASE DATE),
RESULTING FROM OR IN CONNECTION WITH THE OWNERSHIP OF THE REAL PROPERTY,
REGARDLESS OF WHETHER THE ACT, OMISSION, EVENT OR CIRCUMSTANCE CONSTITUTED A
VIOLATION OF ANY APPLICABLE ENVIRONMENTAL LAW AT THE TIME OF ITS EXISTENCE OR
OCCURRENCE, INCLUDING IN CONNECTION WITH, OR AS A RESULT OF, IN WHOLE OR IN
PART, OF ANY NEGLIGENCE OF ADMINISTRATIVE LENDER OR ANY LENDER; PROVIDED THAT,
THE BORROWER SHALL NOT BE UNDER ANY OBLIGATION TO INDEMNIFY THE ADMINISTRATIVE
LENDER OR ANY LENDER TO THE EXTENT THAT ANY SUCH LIABILITY ARISES AS THE RESULT
OF THE NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PERSON, AS FINALLY JUDICIALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION. THE PROVISIONS OF THIS
PARAGRAPH SHALL (I) SURVIVE THE RELEASE DATE AND SHALL CONTINUE THEREAFTER IN
FULL FORCE AND EFFECT AND (II) CONTROL OVER THE PROVISIONS OF SECTION 5.10
------------
HEREOF TO THE EXTENT OF ANY CONFLICT RELATED TO ENVIRONMENTAL MATTERS.
ARTICLE 6.
Information Covenants
---------------------
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled), the Borrower shall furnish or cause to be furnished to
each Lender, subject to such Lender having executed a Confidentiality Agreement:
Section 6.1 Quarterly Financial Statements and Information. Within
----------------------------------------------
45 days after the end of each Fiscal Quarter (except the last Fiscal Quarter) of
each Fiscal Year, a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such Fiscal Quarter and the related consolidated
statement of operations for such Fiscal Quarter and for the elapsed portion of
the year ended with the last day of such Fiscal Quarter, and a consolidated
statement of cash flows for the elapsed portion of the year ended with the last
day of such Fiscal Quarter, all of which shall be certified by the president or
chief financial officer of the Borrower, to be, in his or her opinion acting
solely in his or her capacity as an officer of the Borrower, complete and
correct in all material respects and to present fairly, in accordance with GAAP,
the financial position and results of operations of the Borrower and its
Subsidiaries as at the end of and for such Fiscal Quarter, and for the elapsed
portion of the year ended with the last day of such Fiscal Quarter, subject only
to normal year-end adjustments.
- 51 -
Section 6.2 Annual Financial Statements and Information; Certificate of
-----------------------------------------------------------
No Default.
----------
(a) Within 90 days after the end of each Fiscal Year, a copy of (i) the
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries, as of the end of the current and prior Fiscal Years and (ii) the
consolidated and consolidating statements of operations and consolidated
statements of stockholders' equity, and consolidated statements of changes in
cash flows as of and through the end of such Fiscal Year, all of which are
prepared in accordance with GAAP, and certified by independent certified public
accountants acceptable to the Lenders, whose opinion shall be in scope and
substance in accordance with generally accepted auditing standards and shall be
unqualified.
(b) Simultaneously with the delivery of the statements required by this
Section 6.2, a letter from the Borrower's public accountants certifying that no
Default was detected during the examination of the Borrower and its
Subsidiaries.
(c) As soon as available, but in any event within 90 days following the end
of each Fiscal Year, a copy of the annual consolidated operating budget of the
Borrower and its Subsidiaries for the succeeding Fiscal Year.
Section 6.3 Compliance Certificate. At the time financial statements
----------------------
are furnished pursuant to Sections 6.1 and 6.2 hereof, the Compliance
------------ ---
Certificate, completed as provided therein.
Section 6.4 Copies of Other Reports and Notices.
-----------------------------------
(a) Promptly upon their becoming available, a copy of (i) all material
reports or letters submitted to the Borrower or any Subsidiary by accountants in
connection with any annual, interim or special audit, including without
limitation any report prepared in connection with the annual audit referred to
in Section 6.2 hereof, and, if requested by the Administrative Lender, any other
-----------
comment letter submitted to management in connection with any such audit, (ii)
each financial statement, report, notice or proxy statement sent by the Borrower
or any Subsidiary to stockholders generally, (iii) each regular, periodic or
other report and any registration statement (other than statements on Form S-8)
or prospectus (or material written communication in respect of any thereof,
except for those related to registration statements on Form S-8) filed by the
Borrower or any Subsidiary with any securities exchange, with the Securities and
Exchange Commission or any successor agency, and (iv) all press releases
concerning material financial aspects of the Borrower or any Subsidiary;
(b) Promptly upon becoming aware that (i) the holder(s) of any note(s) or
other evidence of indebtedness or other security of the Borrower or any
Subsidiary in excess of $4,000,000 in the aggregate has given notice or taken
any action with respect to a breach, failure to perform, claimed default or
event of default thereunder, (ii) any party to any Capitalized Lease Obligation
in excess of $4,000,000 or any party to any obligations in respect of Operating
Leases, the termination or default with respect to which could reasonably be
expected to have
- 52 -
a Material Adverse Effect, has given notice or taken any action with respect to
a breach, failure to perform, claimed default or event of default thereunder,
(iii) any occurrence or non-occurrence of any event which constitutes or which
with the passage of time or giving of notice or both could constitute a breach
by the Borrower or any Subsidiary under any agreement or instrument other than
this Agreement to which the Borrower or any Subsidiary is a party or by which
any of their properties may be bound, if any such event could reasonably be
expected to have a Material Adverse Effect, or (iv) any event, circumstance or
condition which could reasonably be expected to be classified as a Material
Adverse Effect, a written notice specifying the details thereof (or the nature
of any claimed default or event of default) and what action is being taken or is
proposed to be taken with respect thereto;
(c) Promptly upon receipt thereof, information with respect to and copies
of any notices received from any federal, state or local regulatory agencies or
any tribunal relating to any order, ruling, law, information or policy that
relates to a breach of or noncompliance with any Law, or might result in the
payment of money by the Borrower or any Subsidiary in an amount of $5,000,000 or
more in the aggregate, or otherwise have a Material Adverse Effect, or result in
the loss or suspension of any Necessary Authorization;
(d) Promptly upon receipt from any governmental agency, or any government,
political subdivision or other entity, any material notice, correspondence,
hearing, proceeding or order regarding or affecting the Borrower, any
Subsidiary, or any of their properties or businesses; and
(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results of
operations or business prospects of the Borrower and its Subsidiaries, as the
Administrative Lender or any Lender may reasonably request.
Section 6.5 Notice of Litigation, Default and Other Matters. Prompt
-----------------------------------------------
notice of the following events after the Borrower has knowledge or notice
thereof:
(a) The commencement of all proceedings and investigations by or before any
governmental body, and all actions and proceedings in any court or before any
arbitrator involving claims for damages (including punitive damages) which could
reasonably be expected to result in the payment of $5,000,000 or more by the
Borrower or any of its Subsidiaries (after deducting the amount with respect to
which the Borrower or any Subsidiary is insured), against or in any other way
relating directly to the Borrower, any Subsidiary, or any of their properties or
businesses;
(b) Promptly upon the happening of any condition or event of which the
Borrower has current actual knowledge which constitutes a Default, a written
notice specifying the nature and period of existence thereof and what action is
being taken or is proposed to be taken with respect thereto; and
- 53 -
(c) Any material adverse change with respect to the business, assets,
liabilities, financial position, results of operations or prospective business
of the Borrower or any Subsidiary, other than changes in the ordinary course of
business which have not had and are not likely to have a Material Adverse
Effect.
Section 6.6 ERISA Reporting Requirements.
----------------------------
(a) Promptly and in any event (i) within 30 days after the Borrower or any
member of its Controlled Group has current actual knowledge that any ERISA Event
described in clause (a) of the definition of ERISA Event or any event described
in Section 4063(a) of ERISA with respect to any Plan of the Borrower or any
member of its Controlled Group has occurred, and (ii) within 10 days after the
Borrower or any member of its Controlled Group has current actual knowledge that
any other ERISA Event with respect to any Plan of the Borrower or any member of
its Controlled Group has occurred or a request for a minimum funding waiver
under Section 412 of the Code with respect to any Plan of the Borrower or any
member of its Controlled Group, a written notice describing such event and
describing what action is being taken or is proposed to be taken with respect
thereto, together with a copy of any notice of event that is given to the PBGC;
(b) Promptly and in any event within three Business Days after receipt
thereof by the Borrower or any member of its Controlled Group from the PBGC,
copies of each notice received by the Borrower or any member of its Controlled
Group of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan;
(c) Promptly upon the request of any Lender, copies of each annual report
(including Schedule B thereto, if applicable) with respect to each Plan of which
Borrower or any member of its Controlled Group is the "plan sponsor";
(d) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Borrower or any member of its
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA which could reasonably be expected to
have a Material Adverse Effect, and a statement from the chief financial officer
of the Borrower or such member of its Controlled Group setting forth details as
to the events giving rise to such potential withdrawal liability and the action
which the Borrower or such member of its Controlled Group is taking or proposes
to take with respect thereto;
(e) Notification within 30 days after any increases in the benefits of any
existing Plan which is not a Multiemployer Plan, or the establishment of any new
Plans, or the commencement of contributions to any Plan to which the Borrower or
any member of its Controlled Group was not previously contributing which could
in any such situations reasonably be expected to have a Material Adverse Effect;
- 54 -
(f) Notification within three Business Days after the Borrower or any
member of its Controlled Group knows that the Borrower or any such member of its
Controlled Group has filed or intends to file a notice of intent to terminate
any Plan under a distress termination within the meaning of Section 4041(c) of
ERISA and a copy of such notice; and
(g) Within three Business Days after receipt of written notice of
commencement thereof, notice of all actions, suits and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any member of
its Controlled Group with respect to any Plan, except those which, in the
aggregate, if adversely determined could not have a Material Adverse Effect.
ARTICLE 7.
Negative Covenants
------------------
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
Section 7.1 Indebtedness. The Borrower shall not, and shall not permit
------------
any Subsidiary to, create, assume, incur or otherwise become or remain obligated
in respect of, or permit to be outstanding, or suffer to exist any Indebtedness,
except:
(a) Indebtedness under the Loan Documents;
(b) Accounts payable and accrued liabilities incurred in the ordinary
course of business, including but not limited to advances to customers and floor
plan financing arrangements;
(c) Guaranties to the extent permitted under Section 7.5 hereof;
-----------
(d) Indebtedness incurred to purchase assets in the ordinary course of
business, including but not limited to inventory, equipment and leased equipment
(other than as permitted pursuant to Section 7.1(b) above), and Capitalized
--------------
Lease Obligations in an aggregate amount for both such purchases and such
Capitalized Lease Obligations not to exceed $20,000,000 in aggregate amount
outstanding at any time;
(e) Indebtedness of a (i) Subsidiary to the Borrower, a (ii) Subsidiary to
a Subsidiary or (iii) the Borrower to a Subsidiary; in each case, except for
Indebtedness permitted by Section 7.1(h) below, subject to the restrictions set
--------------
forth in the second sentence of Section 7.7 hereof;
-----------
(f) Indebtedness existing on the Agreement Date which is described on
Schedule 6 hereto, including renewals (but no increases) thereof;
----------
- 55 -
(g) Indebtedness in respect of deferred income Taxes and deferred revenues;
(h) Securitization Indebtedness incurred in respect of Securitizations
permitted pursuant to Section 7.4(a)(iii) hereof and any repurchase obligations
-------------------
related to such Securitizations; and
(i) Indebtedness not otherwise permitted pursuant to clauses (a) through
(h) above, not to exceed $50,000,000 in aggregate amount outstanding at any
time.
Section 7.2 Liens. The Borrower shall not, and shall not permit any
-----
Subsidiary to, create, assume, incur, permit or suffer to exist, directly or
indirectly, any Lien on any of its assets, whether now owned or hereafter
acquired, except Permitted Liens. The Borrower shall not, and shall not permit
any Subsidiary to, become subject to any Negative Pledge other than a Negative
Pledge in respect of Indebtedness permitted by Sections 7.1(b), (d) or (h)
--------------- --- ---
hereof; provided that any such permitted Negative Pledge shall relate only to
the assets purchased or acquired or which are the subject of a Securitization
permitted by Section 7.4(a)(iii) hereof.
-------------------
Section 7.3 Investments. The Borrower shall not, and shall not permit any
-----------
Subsidiary to, make any Investment, except that the Borrower may purchase or
otherwise acquire and own:
(a) Cash and Cash Equivalents;
(b) Investments in, or transfers of any assets to, one or more Subsidiaries
(i) that (A) are or immediately become subject to the provisions hereof, and (B)
are or immediately become party to the Subsidiary Guaranty and the Subordination
Agreement or (ii) that have been formed for the sole purpose of engaging in a
Securitization permitted by Section 7.4(a)(iii) hereof;
-------------------
(c) Accounts receivable that arise in the ordinary course of business and
are payable on standard terms;
(d) Investments in existence on the Agreement Date which are described on
Schedule 5 hereto;
----------
(e) Investments in the form of loans to directors, officers and employees
and any Guaranties thereof to the extent permitted pursuant to Sections 7.5 and
------------
7.6 hereof;
---
(f) Other Investments in assets, property or businesses within the
description contained in Section 4.1(d) hereof not to exceed $50,000,000 in
--------------
aggregate amount at any time; and
(g) Investments in residual interests in any Securitization permitted
pursuant to Section 7.4(a)(iii) hereof.
-------------------
- 56 -
Section 7.4 Liquidation, Disposition or Acquisition of Assets, Merger, New
--------------------------------------------------------------
Subsidiaries. The Borrower shall not, and shall not permit any Subsidiary to,
------------
at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or dissolution)
or otherwise wind up; or sell, lease, abandon, transfer or otherwise dispose of
all or any part of its assets, properties or business other than (i) inventory
and other assets sold in the ordinary course of business (which shall include
sales of stores), (ii) transfers of assets from the Borrower to a Subsidiary or
from a Subsidiary to the Borrower or from a Subsidiary to a Subsidiary, and
(iii) sales or pledges of Accounts or interests in Accounts pursuant to
Securitizations not to exceed $100,000,000 in aggregate amount outstanding at
any time during the term of this Agreement;
(b) enter into any merger or consolidation (i) unless with respect to a
merger or consolidation, the Borrower shall be the surviving corporation, unless
the merger or consolidation involves a Subsidiary and the Borrower is not
merging or consolidating with another Person, and either (A) such Subsidiary
shall be the surviving corporation, (B) the survivor of the merger becomes a
Subsidiary that becomes a party to the Subsidiary Guaranty and the Subordination
Agreement or (C) the entity formed in the consolidation becomes a Subsidiary
that becomes a party to the Subsidiary Guaranty and the Subordination Agreement,
(ii) if such transaction is being utilized to circumvent compliance with any
term or provision herein and (iii) unless no Default or Event of Default shall
then be in existence or occur as a result of such transaction; or
(c) create or acquire any Subsidiary, except as permitted by Section 7.3(b)
--------------
hereof.
Section 7.5 Guaranties. The Borrower shall not, and shall not permit
----------
any Subsidiary to, at any time make or issue any Guaranty, or assume, be
obligated with respect to, or permit to be outstanding any Guaranty, of any
obligation of any other Person except (a) the Subsidiary Guaranty, (b) the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection, (c) the Guaranty of any Indebtedness permitted by Section
-------
7.1 hereof, (d) the Guaranty of Indebtedness of directors, officers and
---
employees of the Borrower and its Subsidiaries during any Fiscal Year not to
exceed, together with the loans to officers and employees permitted pursuant to
Section 7.6 hereof for such Fiscal Year, $1,000,000 in aggregate amount, and (e)
-----------
the Guaranty of the Senior Subordinated Notes by each Person who has executed a
Subsidiary Guaranty.
Section 7.6 Restricted Payments. The Borrower shall not, and shall
-------------------
not permit any Subsidiary to, directly or indirectly declare, pay or make any
Restricted Payments; provided, however, (a) any Subsidiary may declare and pay
Dividends to the Borrower or another Subsidiary, (b) the Borrower may make loans
to directors, officers and employees of Borrower and its Subsidiaries during any
Fiscal Year (calculated net of loan repayments), together with the Guaranty of
Indebtedness of directors, officers and employees permitted pursuant to Section
-------
7.5 hereof during such Fiscal Year, in an aggregate amount not to exceed
---
$1,000,000, (c) the Borrower may prepay the Senior Subordinated Notes in part or
in full, and (d) the
- 57 -
Borrower may make Treasury Stock Purchases of its shares of capital stock for an
aggregate consideration not to exceed $30,000,000; provided, further, however,
the Borrower shall not pay or make any such Restricted Payments set forth in
clause (b), (c) or (d) above unless there shall exist no Default prior to or
after giving effect to any such proposed Restricted Payment.
Section 7.7 Affiliate Transactions. Except (i) for the Subsidiary
----------------------
Guaranty and (ii) as otherwise expressly permitted herein to the contrary, the
Borrower shall not, and shall not permit any Subsidiary to, at any time engage
in any transaction with an Affiliate (other than the Borrower or any
Subsidiary), nor make an assignment or other transfer of any of its assets or
properties to any Affiliate (other than the Borrower or any Subsidiary), on
terms materially less advantageous to the Borrower or Subsidiary than would be
the case if such transaction had been effected with a non-Affiliate (other than
advances to employees in the ordinary course of business). The Borrower shall
not, and shall not permit any Subsidiary to, in any event incur or suffer to
exist any Indebtedness (other than Indebtedness permitted pursuant to Section
-------
7.1(h) hereof) or Guaranty (other than Indebtedness permitted pursuant to
------
Section 7.1(h) hereof) in favor of any Affiliate, unless such Affiliate shall
--------------
subordinate the payment and performance thereof to the Obligations on terms,
conditions and documentation satisfactory to the Determining Lenders.
Notwithstanding the foregoing, the Borrower may loan the proceeds of Advances to
Subsidiaries, so long as (a) there shall exist no Default prior to or after
giving effect to such proposed loan and (b) entries in the financial records of
the Borrower and the borrowing Subsidiaries are made evidencing such loans and
repayments thereof.
Section 7.8 Compliance with ERISA. The Borrower shall not, and shall not
---------------------
permit any Subsidiary to, directly or indirectly, or permit any member of its
Controlled Group to directly or indirectly, (a) terminate any Plan the result of
which could reasonably be expected to have a Material Adverse Effect, (b) permit
to exist any ERISA Event, or any other event or condition the result of which
could reasonably be expected to have a Material Adverse Effect, (c) make a
complete or partial withdrawal (within the meaning of Section 4201 of ERISA)
from any Multiemployer Plan the result of which could reasonably be expected to
have a Material Adverse Effect, (d) enter into any new Plan or modify any
existing Plan so as to increase its obligations thereunder except in the
ordinary course of business consistent with past practice the result of which
could reasonably be expected to have a Material Adverse Effect, or (e) permit
the present value of all benefit liabilities, as defined in Title IV of ERISA,
under each Plan of the Borrower or any member of its Controlled Group (using the
actuarial assumptions utilized by each such Plan) to exceed the fair market
value of Plan assets allocable to such benefits, all determined as of the most
recent valuation date for each such Plan, by an amount which could reasonably be
expected to have a Material Adverse Effect.
Section 7.9 Leverage Ratio. The Borrower shall not permit the Leverage
--------------
Ratio to exceed 3.00 to 1 at the end of any Fiscal Quarter, calculated for the
twelve Fiscal Periods preceding the date of determination.
- 58 -
Section 7.10 Fixed Charge Coverage Ratio. The Borrower shall not permit
---------------------------
the Fixed Charge Coverage Ratio to be less than 2.00 to 1 at the end of any
Fiscal Quarter, calculated for the twelve Fiscal Periods preceding the date of
determination.
Section 7.11 Tangible Net Worth. The Borrower shall not permit the
------------------
Tangible Net Worth to be less than an amount equal to the sum of (a)
$325,000,000, plus (b) 50% of cumulative Net Income for the period from, but not
including, September 28, 1996 through the date of calculation (but excluding
from the calculation of such cumulative Net Income the effect, if any, of any
fiscal quarter (or portion of a fiscal quarter not then ended) of the Borrower
for which Net Income was a negative number), plus (c) an amount equal to the net
worth of any Person that becomes a Subsidiary of the Borrower or is merged into
or consolidated with the Borrower or any Subsidiary of the Borrower or
substantially all of the assets of which are acquired by the Borrower or any
Subsidiary of the Borrower to the extent the purchase price paid therefor is
paid in equity securities of the Borrower or any Subsidiary of the Borrower.
Section 7.12 Liquidity Ratio. The Borrower shall not permit the
---------------
Liquidity Ratio to be less than 1.30 to 1 at the end of any Fiscal Quarter.
Section 7.13 Sale and Leaseback. If a Default or Event of Default shall
------------------
occur and be continuing, the Borrower shall not, and shall not permit any
Subsidiary to, enter into any arrangement whereby it sells or transfers any of
its assets, and thereafter rents or leases such assets.
Section 7.14 Sale or Discount of Receivables. The Borrower shall not, and
-------------------------------
shall not permit any Subsidiary to, directly or indirectly, sell, with or
without recourse, for discount or otherwise, any notes or accounts receivable
other than in respect of Securitizations to the extent permitted pursuant to
Section 7.4(a)(iii) hereof.
-------------------
Section 7.15 Amendment and Modification of Subordinated Debt
-----------------------------------------------
Documents. The Borrower shall not, and shall not permit any Subsidiary to,
---------
directly or indirectly, amend, modify, supplement, waive compliance with, or
assent to noncompliance with, any term, provision or condition of any of the
documents governing or evidencing any Subordinated Debt which (i) the
Determining Lenders deem material (including, without limitation, provisions
relating to events of default, acceleration rights, interest rates, maturity
date, redemption price, subordination, payment dates, guaranties, collateral,
covenants and the definitions with respect thereto (including, without
limitation, the definition of "Change of Control")) or (ii) places any further
restrictions on the Borrower or its Subsidiaries or increases the obligations of
the Borrower or any Subsidiary thereunder or confers on the holders thereof any
additional rights.
Section 7.16 Acquisitions. The Borrower shall not, and shall not permit
------------
any Subsidiary of Borrower to, make any Acquisition; provided, however, if
immediately prior to and after giving effect to the proposed Acquisition there
shall not exist a Default or Event of Default, the Borrower or any Subsidiary of
the Borrower may make Acquisitions so long as (i) such Acquisition shall not be
opposed by the board of the directors of the Person being acquired,
- 59 -
(ii) if the Acquisition Consideration for such Acquisition is equal to or
greater than $10,000,000, the Administrative Lender shall have received written
notice of such Acquisition at least 15 days prior to the date of consummation of
such Acquisition, (iii) if either the Acquisition Consideration for such
Acquisition is equal to or greater than $150,000,000 or the Non-Equity
Consideration for such Acquisition is equal to or greater than $50,000,000, the
Administrative Lender shall have received at least 15 days prior to the date of
consummation of such Acquisition a Compliance Certificate setting forth the
covenant calculations both immediately prior to and after giving effect to the
proposed Acquisition, (iv) if both the Acquisition Consideration for such
Acquisition is equal to or greater than $150,000,000 and the Non-Equity
Consideration for such Acquisition is equal to or greater than $50,000,000, the
Determining Lenders shall have approved such Acquisition in writing, (v) the
assets, property or business acquired shall be within the description contained
in Section 4.1(d) hereof, and (vi) if the Acquisition results in a new
--------------
Subsidiary, (A) such Subsidiary shall execute a Subsidiary Guaranty and a
Subordination Agreement and (B) the Administrative Lender receives within five
(5) days after the consummation of such Acquisition such board resolutions,
officer's certificates and opinions of counsel as the Administrative Lender
shall reasonably request in connection with such Acquisition.
Section 7.17 Inventory Purchases. The Borrower shall not, and shall
-------------------
not permit any Subsidiary to, purchase any Inventory (other than Inventory which
is purchased from vendors or distributors in the ordinary course of business) in
one transaction or a series of related transactions in an aggregate amount in
excess of (a) $100,000,000 unless the Administrative Lender has received prior
to such purchase or purchases a Compliance Certificate setting forth the
covenant calculations both immediately prior to and after giving effect to the
proposed purchase or purchases and (b) $200,000,000 without the prior written
consent of the Determining Lenders.
ARTICLE 8.
Default
-------
Section 8.1 Events of Default. Each of the following shall constitute an
-----------------
Event of Default, whatever the reason for such event, and whether voluntary,
involuntary, or effected by operation of law or pursuant to any judgment or
order of any court or any order, rule or regulation of any governmental or non-
governmental body:
(a) Any representation or warranty made under any Loan Document shall
prove to have been incorrect or misleading in any material respect when made;
(b) The Borrower shall default in the payment of any (i) principal under
any Note or (ii) interest under any Note or any fees payable hereunder or any
other costs, fees, expenses or other amounts payable hereunder or under the
other Loan Documents, when due, which Default
- 60 -
with respect to clause (ii) immediately preceding only is not cured within three
Business Days after notice (which may be telephonic) from the Administrative
Lender thereof;
(c) The Borrower or any Subsidiary shall default in the performance or
observance of any agreement or covenant contained in Section 5.1 or Article 7
----------- ---------
hereof;
(d) The Borrower or any Subsidiary shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 8.1, and such default shall
-----------
not be cured within a period of 30 days after the earlier of notice from the
Administrative Lender thereof or actual notice thereof by the Borrower or such
Subsidiary;
(e) There shall occur any default or breach in the performance or
observance of any agreement or covenant (after the expiration of any applicable
grace period) in any of the Loan Documents (other than this Agreement);
(f) There shall be entered a decree or order by a court having jurisdiction
in the premises constituting an order for relief in respect of the Borrower or
any Subsidiary under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official of the Borrower or any Subsidiary,
or of any substantial part of their respective properties, or ordering the
winding-up or liquidation of the affairs of the Borrower or any Subsidiary, and
any such decree or order shall continue unstayed and in effect for a period of
60 consecutive days;
(g) The Borrower or any Subsidiary shall file a petition, answer or consent
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, or the Borrower or any Subsidiary shall consent to the
institution of proceedings thereunder or to the filing of any such petition or
to the appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Borrower or
any Subsidiary or of any substantial part of their respective properties, or the
Borrower or any Subsidiary shall fail generally to pay its debts as they become
due, or the Borrower or any Subsidiary shall take any action in furtherance of
any such action;
(h) A final judgment or judgments shall be entered by any court against the
Borrower or any Subsidiary for the payment of money which exceeds $2,500,000 in
the aggregate, or a warrant of attachment or execution or similar process shall
be issued or levied against property of the Borrower or any Subsidiary which,
together with all other such property of the Borrower and its Subsidiaries
subject to other such process, exceeds in value $2,500,000 in the aggregate, and
if such judgment or award is not insured or, within 30 days after the entry,
issue or levy thereof, such judgment, warrant or process shall not have been
paid or discharged or stayed pending appeal, or if, after the expiration of any
such stay, such judgment, warrant or process shall not have been paid or
discharged;
- 61 -
(i) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other party-in-
interest or disqualified person shall engage in transactions which in the
aggregate would reasonably result in a direct or indirect liability to the
Borrower or any member of its Controlled Group in excess of $2,000,000 under
Section 409 or 502 of ERISA or Section 4975 of the Code; (ii) the Borrower or
any member of its Controlled Group shall incur any accumulated funding
deficiency, as defined in Section 412 of the Code, in the aggregate in excess of
$2,000,000, or request a funding waiver from the Internal Revenue Service for
contributions in the aggregate in excess of $2,000,000; (iii) the Borrower or
any member of its Controlled Group shall incur any withdrawal liability in the
aggregate in excess of $2,000,000 as a result of a complete or partial
withdrawal within the meaning of Section 4203 or 4205 of ERISA, or any other
liability with respect to a Plan in excess of $2,000,000, unless the amount of
such liability has been funded within the Plan or pursuant to one or more
insurance contracts; (iv) the Borrower or any member of its Controlled Group
shall fail to make a required contribution by the due date under Section 412 of
the Code or Section 302 of ERISA which would result in the imposition of a lien
under Section 412 of the Code or Section 302 of ERISA; (v) the Borrower, any
member of its Controlled Group or any Plan sponsor shall notify the PBGC of an
intent to terminate, or the PBGC shall institute proceedings to terminate, any
Plan subject to Title IV of ERISA; (vi) a Reportable Event shall occur with
respect to a Plan subject to Title IV of ERISA, and within 15 days after the
reporting of such Reportable Event to the Administrative Lender, the
Administrative Lender shall have notified the Borrower in writing that the
Determining Lenders have made a determination that, on the basis of such
Reportable Event, there are reasonable grounds for the termination of such Plan
by the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer such Plan and as a result thereof an Event of
Default shall have occurred hereunder; (vii) a trustee shall be appointed by a
court of competent jurisdiction to administer any Plan or the assets thereof;
(viii) the benefits of any Plan subject to Title IV of ERISA shall be increased,
or the Borrower or any member of its Controlled Group shall begin to maintain,
or begin to contribute to, any Plan, without the prior written consent of the
Determining Lenders; or (ix) any ERISA Event with respect to a Plan subject to
Title IV of ERISA shall have occurred, and 30 days thereafter (A) such ERISA
Event, other than such event described in clause (f) of the definition of ERISA
Event herein, (if correctable) shall not have been corrected and (B) the then
present value of such Plan's benefit liabilities, as defined in Title IV of
ERISA, shall exceed the then current value of assets accumulated in such Plan;
provided, however, that the events listed in subsections (v) through (ix) shall
constitute Events of Default only if, as of the date thereof or any subsequent
date, the amount of liability that the Borrower or any member of its Controlled
Group reasonably is likely to incur in the aggregate under Section 4062, 4063,
4064, 4219 or 4023 of ERISA or any other provision of law with respect to all
such Plans, computed by the actuary of the Plan taking into account any
applicable rules and regulations of the PBGC at such time, and based on the
actuarial assumptions used by the Plan, resulting from or otherwise associated
with such event exceeds $2,000,000;
(j) Any Loan Document shall be the subject of any proceeding instituted by
any Person other than a Lender (except in connection with any Lender's exercise
of any remedies under the Loan Documents), or there shall exist any litigation
with respect to any Loan
- 62 -
Document, or any Person shall challenge in any manner whatsoever the validity or
enforceability of any Loan Document; provided, however, that during any such
time any such circumstance shall be bonded or stayed in accordance with
Applicable Law and to the satisfaction of each Lender, such circumstance shall
not be an Event of Default;
(k) The Borrower or any Subsidiary shall default in the payment of any
Indebtedness or any lease obligations in respect of Operating Leases in an
aggregate amount of $4,000,000 or more beyond any grace period provided with
respect thereto, or any other event or condition shall exist, pursuant to any
agreement or instrument under which such Indebtedness or such lease obligation
is created or evidenced beyond any applicable grace period, if the effect of
such event or condition is to permit or cause the holder of such Indebtedness
(or a trustee on behalf of any such holder) or the obligee in respect of such
lease obligation to (i) cause such Indebtedness or lease obligation to become
due or payable prior to its date of maturity or expiration or (ii) require the
Borrower or any Subsidiary to purchase or redeem such Indebtedness; provided,
--------
however, notwithstanding the above, there shall not occur an Event of Default
-------
under this Section 8.1(k) hereof with respect to lease obligations under
--------------
Operating Leases if defaults with respect thereto are being contested in good
faith by appropriate proceedings and adequate reserves, if required by GAAP,
have been established therefor;
(l) Any lease of the Borrower or any Subsidiary shall terminate or cease to
be effective, and termination or cessation thereof, together with all other
leases, if any, which have been terminated or cease to be effective, could
reasonably be expected to have a Material Adverse Effect; provided, however,
that termination or cessation of a lease shall not constitute an Event of
Default if another lease reasonably satisfactory to each Lender is
contemporaneously substituted therefor;
(m) Any provision of any Loan Document shall for any reason cease to be
valid and binding on or enforceable against any party to it (other than the
Administrative Lender or any Lender) in all material respects, or any such party
shall so state in writing;
(n) A Change of Control shall have occurred; or
(o) The Borrower shall fail to give the written notice required to be
delivered to the Administrative Lender pursuant to Section 9.07 of the
Indenture.
Section 8.2 Remedies. If an Event of Default shall have occurred and
--------
shall be continuing:
(a) With the exception of an Event of Default specified in Section 8.1(f)
--------------
or (g) hereof, the Administrative Lender shall, upon the direction of the
---
Determining Lenders, terminate the Commitment and/or declare the principal of
and interest on the Advances and all Obligations and other amounts owed under
the Loan Documents to be forthwith due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived,
anything in the Loan Documents to the contrary notwithstanding.
- 63 -
(b) Upon the occurrence of an Event of Default specified in Section
-------
8.1(f) or (g) hereof, such principal, interest and other amounts shall thereupon
------ ---
and concurrently therewith become due and payable and the Commitment shall
forthwith terminate, all without any action by the Administrative Lender, any
Lender or any holders of the Notes and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in the
Loan Documents to the contrary notwithstanding.
(c) If any Letter of Credit shall be then outstanding, the
Administrative Lender may demand upon the Borrower to, and forthwith upon such
demand, the Borrower shall, pay to the Administrative Lender in same day funds
at the office of the Administrative Lender in such demand for deposit in the L/C
Cash Collateral Account, an amount equal to the maximum amount available to be
drawn under the Letters of Credit then outstanding.
(d) The Administrative Lender and the Lenders may exercise all of the
post-default rights granted to them under the Loan Documents or under Applicable
Law.
(e) The rights and remedies of the Administrative Lender and the
Lenders hereunder shall be cumulative, and not exclusive.
ARTICLE 9.
Changes in Circumstances
------------------------
Section 9.1 LIBOR Basis Determination Inadequate. If with respect to
------------------------------------
any proposed LIBOR Advance for any Interest Period, any Lender determines that
(i) deposits in Dollars (in the applicable amount) are not being offered to that
Lender in the relevant market for such Interest Period or (ii) the LIBOR Basis
for such proposed LIBOR Advance does not adequately cover the cost to such
Lender of making and maintaining such proposed LIBOR Advance for such Interest
Period, such Lender shall forthwith give notice thereof to the Borrower,
whereupon until such Lender notifies the Borrower that the circumstances giving
rise to such situation no longer exist, the obligation of such Lender to make
LIBOR Advances shall be suspended.
Section 9.2 Illegality. If any applicable law, rule or regulation,
----------
or any change therein or adoption thereof, or interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its LIBOR Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for such Lender (or its LIBOR
Lending Office) to make, maintain or fund its LIBOR Advances, such Lender shall
so notify the Borrower and the Administrative Lender. Before giving any notice
to the Borrower pursuant to this Section, the notifying Lender shall designate a
different LIBOR Lending Office or other lending office if such designation will
avoid the need for giving such notice and will not, in the sole judgment of such
Lender, be materially disadvantageous to such Lender. Upon receipt of such
notice,
- 64 -
notwithstanding anything contained in Article 2 hereof, the Borrower shall repay
---------
in full the then outstanding principal amount of each LIBOR Advance owing to the
notifying Lender, together with accrued interest thereon, on either (a) the last
day of the Interest Period applicable to such Advance, if such Lender may
lawfully continue to maintain and fund such Advance to such day, or (b)
immediately, if such Lender may not lawfully continue to fund and maintain such
Advance to such day. Concurrently with repaying each affected LIBOR Advance
owing to such Lender if the Borrower does not terminate this Agreement,
notwithstanding anything contained in Article 2 hereof, the Borrower shall
---------
borrow a Base Rate Advance from such Lender, and such Lender shall make such
Base Rate Advance, in an amount such that the outstanding principal amount of
the Advances owing to such Lender shall equal the outstanding principal amount
of the Advances owing immediately prior to such repayment.
Section 9.3 Increased Costs.
---------------
(a) If any applicable law, rule or regulation, or any change in or
adoption of any law, rule or regulation, or any interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof or compliance by any Lender
(or its LIBOR Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or compatible
agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to any Tax
(net of any tax benefit engendered thereby) with respect to its LIBOR
Advances or its obligation to make such Advances, or shall change the basis
of taxation of payments to a Lender (or to its LIBOR Lending Office) of the
principal of or interest on its LIBOR Advances or in respect of any other
amounts due under this Agreement, as the case may be, or its obligation to
make such Advances (except for changes in the rate of tax on the overall
net income, net worth or capital of such Lender and franchise taxes, doing
business taxes or minimum taxes imposed upon such Lender); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, a Lender's
LIBOR Lending Office or shall impose on the Lender (or its LIBOR Lending
Office) or on the London interbank market any other condition affecting its
LIBOR Advances or its obligation to make such Advances;
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to
reduce the amount of any sum received or receivable by a Lender (or its LIBOR
Lending Office) with respect thereto, by an amount deemed by a Lender to be
material, then, within 15 days after demand by a Lender, the Borrower agrees to
pay to such Lender such additional amount as will compensate such Lender for
such increased costs or reduced amounts, subject to Section 11.9 hereof. The
------------
affected Lender will as soon as practicable notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this
- 65 -
Section and will designate a different LIBOR Lending Office or other lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the sole judgment of the affected Lender made
in good faith, be disadvantageous to such Lender. The obligations of the
Borrower under this Section 9.3 shall survive for a period of six months after
-----------
the Release Date with respect to any increased cost which occurs as a result of
a change in or adoption of any law, rule or regulation, or interpretation
thereof, which has a retroactive effect to a date prior to the Release Date.
(b) A certificate of any Lender claiming compensation under this Section
and setting forth the additional amounts to be paid to it hereunder and
calculations therefor shall be controlling in the absence of manifest error. In
determining such amount, a Lender may use any reasonable averaging and
attribution methods. If a Lender demands compensation under this Section, the
Borrower may at any time, upon at least five Business Days' prior notice to such
Lender, after reimbursement to such Lender by the Borrower in accordance with
this Section of all costs incurred, prepay in full the then outstanding LIBOR
Advances of such Lender, together with accrued interest thereon to the date of
prepayment, along with any reimbursement required under Section 2.9 hereof.
-----------
Concurrently with prepaying such LIBOR Advances, the Borrower shall borrow a
Base Rate Advance from such Lender, and such Lender shall make such Base Rate
Advance, in an amount such that the outstanding principal amount of the Advances
owing to such Lender shall equal the outstanding principal amount of the
Advances owing immediately prior to such prepayment.
Section 9.4 Effect On Base Rate Advances. If notice has been given
----------------------------
pursuant to Section 9.1, 9.2 or 9.3 hereof suspending the obligation of a Lender
----------- --- ---
to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be repaid or
prepaid, then, unless and until such Lender notifies the Borrower that the
circumstances giving rise to such repayment no longer apply, all Advances which
would otherwise be made by such Lender as LIBOR Advances shall be made instead
as Base Rate Advances.
Section 9.5 Capital Adequacy. If either (a) the introduction of or any
----------------
change in or in the interpretation of any law, rule or regulation or (b)
compliance by a Lender with any law, rule or regulation or any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital required
or expected to be maintained by a Lender or any corporation controlling such
Lender, and such Lender determines that the amount of such capital is increased
by or based upon the existence of such Lender's commitment or Advances hereunder
and other commitments or advances of such Lender of this type, then, upon demand
by such Lender, subject to Section 11.9 hereof, the Borrower shall immediately
------------
pay to such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender with respect to such circumstances,
to the extent that such Lender reasonably determines in good faith such increase
in capital to be allocable to the existence of such Lender's commitment
hereunder. A certificate as to such amounts submitted to the Borrower by a
Lender hereunder, shall, in the absence of manifest error, be conclusive and
binding for all purposes. The obligations of the Borrower under this Section
-------
9.5 shall survive for a period of six months after the Release Date
---
- 66 -
with respect to any capital requirements which occur as a result of a change in
or adoption of any law, rule or regulation or interpretation thereof, which has
a retroactive effect to a date prior to the Release Date.
ARTICLE 10.
AGREEMENT AMONG LENDERS
-----------------------
Section 10.1 Agreement Among Lenders. The Lenders agree among themselves
-----------------------
that:
(a) Administrative Lender. Each Lender hereby appoints the Administrative
---------------------
Lender as its nominee in its name and on its behalf, to receive all documents
and items to be furnished hereunder; to act as nominee for and on behalf of all
Lenders under the Loan Documents; to, except as otherwise expressly set forth
herein, take such action as may be requested by the Determining Lenders,
provided that, unless and until the Administrative Lender shall have received
such requests, the Administrative Lender may take such administrative action, or
refrain from taking such administrative action, as it may deem advisable and in
the best interests of the Lenders; to arrange the means whereby the proceeds of
the Advances of the Lenders are to be made available to the Borrower; to
distribute promptly to each Lender information, requests and documents received
from the Borrower, and each payment (in like funds received) with respect to any
of such Lender's Advances, fee or other amount; and to deliver to the Borrower
requests, demands, approvals and consents received from the Lenders.
Administrative Lender agrees to promptly distribute to each Lender, at such
Lender's address set forth below information, requests, documents and payments
received from the Borrower. The Administrative Lender shall have no duties or
responsibilities except those expressly set forth in this Agreement. The duties
of the Administrative Lender are mechanical and administrative in nature and the
Administrative Lender shall have no fiduciary relationship in respect of any
Lender by reason of this Agreement or any other Loan Document.
(b) Replacement of Administrative Lender. Should the Administrative Lender
------------------------------------
or any successor Administrative Lender ever cease to be a Lender hereunder, or
should the Administrative Lender or any successor Administrative Lender ever
resign as Administrative Lender (provided that the Administrative Lender may not
resign without the prior written consent of the Borrower), or should the
Administrative Lender or any successor Administrative Lender ever be removed
with cause by the Determining Lenders, then the Lender appointed by the other
Lenders shall forthwith become the Administrative Lender, and the Borrower and
the Lenders shall execute such documents as any Lender may reasonably request to
reflect such change at no cost to the Borrower. Any resignation or removal of
the Administrative Lender or any successor Administrative Lender shall become
effective upon the appointment by the Lenders of a successor Administrative
Lender; provided, however, that if the Lenders fail for any reason to appoint a
successor within 60 days after such removal or resignation, the Administrative
Lender or any successor Administrative Lender (as the case may be) shall
thereafter have no obligation to act as Administrative Lender hereunder.
- 67 -
(c) Expenses. Each Lender shall pay its pro rata share, based on its
--------
Specified Percentage, of any expenses paid by the Administrative Lender directly
and solely in connection with any of the Loan Documents if Administrative Lender
does not receive reimbursement therefor from other sources within 60 days after
the date incurred, unless payment of such fees is being diligently disputed by
such Lender or the Borrower in good faith. Any amount so paid by the Lenders to
the Administrative Lender shall be returned by the Administrative Lender pro
rata to each paying Lender to the extent later paid by the Borrower or any other
Person on the Borrower's behalf to the Administrative Lender.
(d) Delegation of Duties. The Administrative Lender may execute any of its
--------------------
duties hereunder by or through officers, directors, employees, attorneys or
agents, and shall be entitled to (and shall be protected in relying upon) advice
of counsel concerning all matters pertaining to its duties hereunder.
(e) Reliance by Administrative Lender. The Administrative Lender and its
---------------------------------
officers, directors, employees, attorneys and agents shall be entitled to rely
and shall be fully protected in relying on any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telex or teletype
message, statement, order, or other document or conversation reasonably believed
by it or them in good faith to be genuine and correct and to have been signed or
made by the proper Person and, with respect to legal matters, upon opinions of
counsel selected the Administrative Lender. The Administrative Lender may, in
its reasonable judgment, deem and treat the payee of any Note as the owner
thereof for all purposes hereof.
(f) Limitation of Administrative Lender's Liability. Neither the
-----------------------------------------------
Administrative Lender nor any of its officers, directors, employees, attorneys
or agents shall be liable for any action taken or omitted to be taken by it or
them hereunder in good faith and believed by it or them to be within the
discretion or power conferred to it or them by the Loan Documents or be
responsible for the consequences of any error of judgment, except for its or
their own gross negligence or wilful misconduct. Except as aforesaid, the
Administrative Lender shall be under no duty to enforce any rights with respect
to any of the Advances, or any security therefor. The Administrative Lender
shall not be compelled to do any act hereunder or to take any action towards the
execution or enforcement of the powers hereby created or to prosecute or defend
any suit in respect hereof, unless indemnified to its satisfaction against loss,
cost, liability and expense. The Administrative Lender shall not be responsible
in any manner to any Lender for the effectiveness, enforceability, genuineness,
validity or due execution of any of the Loan Documents, or for any
representation, warranty, document, certificate, report or statement made herein
or furnished in connection with any Loan Documents, or be under any obligation
to any Lender to ascertain or to inquire as to the performance or observation of
any of the terms, covenants or conditions of any Loan Documents on the part of
the Borrower. TO THE EXTENT NOT REIMBURSED BY THE BORROWER, EACH LENDER HEREBY
SEVERALLY INDEMNIFIES AND HOLDS HARMLESS THE ADMINISTRATIVE LENDER, PRO RATA
ACCORDING TO ITS SPECIFIED PERCENTAGE, FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES AND/OR
- 68 -
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, ASSERTED
AGAINST, OR INCURRED BY THE ADMINISTRATIVE LENDER IN ITS CAPACITY AS
ADMINISTRATIVE LENDER IN ANY WAY WITH RESPECT TO ANY LOAN DOCUMENTS OR ANY
ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE LENDER UNDER THE LOAN DOCUMENTS
(INCLUDING ANY NEGLIGENT ACTION OF THE ADMINISTRATIVE LENDER), EXCEPT TO THE
EXTENT THE SAME RESULT FROM GROSS NEGLIGENCE OR WILFUL MISCONDUCT BY THE
ADMINISTRATIVE LENDER.
(g) Liability Among Lenders. No Lender shall incur any liability (other
-----------------------
than the sharing of expenses and other matters specifically set forth herein and
in the other Loan Documents) to any other Lender, except for acts or omissions
in bad faith.
(h) Rights as Lender. With respect to its commitment hereunder, the
----------------
Advances made by it and Note issued to it, the Administrative Lender shall have
the same rights as a Lender and may exercise the same as though it were not the
Administrative Lender, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Lender in its individual
capacity. The Administrative Lender or any Lender may accept deposits from, act
as trustee under indentures of, and generally engage in any kind of business
with, the Borrower and any of its Affiliates, and any Person who may do business
with or own securities of the Borrower or any of its Affiliates, all as if the
Administrative Lender were not the Administrative Lender hereunder and without
any duty to account therefor to the Lenders.
Section 10.2 Lender Credit Decision. Each Lender acknowledges that it
----------------------
has, independently and without reliance upon the Administrative Lender or any
other Lender and based upon the financial statements referred to in Sections
--------
4.1(j), 6.1 and 6.2 hereof, and such other documents and information as it has
------ --- ---
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Lender or any other Lender and based
upon such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
Section 10.3 Benefits of Article. None of the provisions of this Article
-------------------
shall inure to the benefit of any Person other than Lenders; consequently, no
Person shall be entitled to rely upon, or to raise as a defense, in any manner
whatsoever, the failure of the Administrative Lender or any Lender to comply
with such provisions.
- 69 -
ARTICLE 11.
Miscellaneous
-------------
Section 11.1 Notices.
-------
(a) All notices and other communications under this Agreement shall be in
writing (except in those cases where giving notice by telephone is expressly
permitted) and shall be deemed to have been given on the date personally
delivered or sent by telecopy (answerback received), or three days after deposit
in the mail, designated as certified mail, return receipt requested, postage-
prepaid, or one day after being entrusted to a reputable commercial overnight
delivery service, or one day after being delivered to the telegraph office or
sent out by telex addressed to the party to which such notice is directed at its
address determined as provided in this Section. All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:
(i) If to the Borrower, at:
CompUSA Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: General Counsel
with a copy to:
Xxxxxxx & Xxxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
(ii) If to the Administrative Lender, at:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxxx
(iii) If to a Lender, at its address shown below its name on the
signature pages hereof, or if applicable, set forth in its
Assignment Agreement.
(b) Any party hereto may change the address to which notices shall be
directed by giving 10 days' written notice of such change to the other parties.
Section 11.2 Expenses. The Borrower shall promptly pay:
--------
- 70 -
(a) all reasonable out-of-pocket expenses of the Administrative Lender in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents, the transactions contemplated hereunder
and thereunder, and the making of Advances hereunder, including without
limitation the reasonable fees and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses and reasonable attorneys' fees of
the Administrative Lender in connection with the administration of the
transactions contemplated in this Agreement and the other Loan Documents and the
preparation, negotiation, execution and delivery of any waiver, amendment or
consent by the Administrative Lender relating to this Agreement or the other
Loan Documents; and
(c) after the occurrence of an Event of Default, all costs, out-of-pocket
expenses and attorneys' fees of the Administrative Lender and each Lender
incurred for enforcement, collection, restructuring, refinancing and "work-out",
or otherwise incurred in obtaining performance under the Loan Documents, which
in each case shall include without limitation fees and expenses of consultants,
counsel for the Administrative Lender and any Lender, and administrative fees
for the Administrative Lender. Notwithstanding anything to the contrary
contained herein, prior to the occurrence of an Event of Default, the Borrower
shall have no obligation to pay legal fees or expenses of any Lender other than
the reasonable legal fees and expenses of the Administrative Lender.
Section 11.3 Waivers. The rights and remedies of the Lenders under this
-------
Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which they would otherwise have. No failure or delay by
the Administrative Lender or any Lender in exercising any right shall operate as
a waiver of such right. The Lenders expressly reserve the right to require
strict compliance with the terms of this Agreement in connection with any
funding of a request for an Advance. In the event that any Lender decides to
fund an Advance at a time when the Borrower is not in strict compliance with the
terms of this Agreement, such decision by such Lender shall not be deemed to
constitute an undertaking by the Lender to fund any further requests for
Advances or preclude the Lenders from exercising any rights available under the
Loan Documents or at law or equity. Any waiver or indulgence granted by the
Lenders shall not constitute a modification of this Agreement, except to the
extent expressly provided in such waiver or indulgence, or constitute a course
of dealing by the Lenders at variance with the terms of the Agreement such as to
require further notice by the Lenders of the Lenders' intent to require strict
adherence to the terms of the Agreement in the future. Any such actions shall
not in any way affect the ability of the Administrative Lender or the Lenders,
in their discretion, to exercise any rights available to them under this
Agreement or under any other agreement, whether or not the Administrative Lender
or any of the Lenders are a party thereto, relating to the Borrower.
- 71 -
Section 11.4 Determination by the Lenders Conclusive and Binding. Any
---------------------------------------------------
calculation or material determination required or expressly permitted to be made
by the Administrative Lender or any Lender under this Agreement shall be made in
its reasonable judgment and in good faith, and shall when made, absent manifest
error, be controlling.
Section 11.5 Set-Off. In addition to any rights now or hereafter granted
-------
under Applicable Law and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Lender and any subsequent holder of any
Note, and any assignee or participant in any Note is hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or any
other Person, any such notice being hereby expressly waived, to set-off,
appropriate and apply any deposits (general or special (except trust and escrow
accounts), time or demand, including without limitation Indebtedness evidenced
by certificates of deposit, in each case whether matured or unmatured) and any
other Indebtedness at any time held or owing by such Lender or holder to or for
the credit or the account of the Borrower, against and on account of the
Obligations and other liabilities of the Borrower to such Lender or holder,
irrespective of whether or not (a) the Lender or holder shall have made any
demand hereunder, or (b) the Lender or holder shall have declared the principal
of and interest on the Advances and other amounts due hereunder to be due and
payable as permitted by
Section 8.2 hereof. Any sums obtained by any Lender or by any assignee,
-----------
participant or subsequent holder of any Note shall be subject to pro rata
treatment of all Obligations and other liabilities hereunder.
Section 11.6 Assignment.
----------
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Documents without the prior
written consent of the Lenders.
(b) No Lender shall be entitled to assign its interest in this Agreement,
its Notes or its Advances, except as hereinafter set forth.
(c) A Lender may at any time sell participations in all or any part of its
Advances (collectively, "Participations") to any banks or other financial
institutions ("Participants"), provided that such Participation shall not confer
on any Person (other than the parties hereto) any right to vote on, approve or
sign amendments or waivers, or any other independent benefit or any legal or
equitable right, remedy or other claim under this Agreement or any other Loan
Documents, other than the right to vote on, approve, or sign amendments or
waivers or consents with respect to items that would result in (i) any increase
in the commitment of any Participant; or (ii)(A) the extension of the date of
maturity of, or (B) the extension of the due date for any payment of principal,
interest or fees respecting, or (C) the reduction of the amount of any
installment of principal or interest on or the change or reduction of any
mandatory reduction required hereunder, or (D) a reduction of the rate of
interest on, the Advances, the Letters of Credit, or the Reimbursement
Obligations; or (iii) the release of security for the Obligations, including
without limitation any guarantee; or (iv) the reduction of any fees payable
hereunder. Notwithstanding the foregoing, any Lender may sell a Participation
to any of its Affiliates which
- 72 -
is a bank or financial institution without the consent of the Borrower, provided
that such Participation shall not confer on any Person (other than the parties
hereto) any right to vote on, approve or sign amendments or waivers, or any
other independent benefit or any legal or equitable right, remedy or other claim
under this Agreement or any other Loan Documents. Notwithstanding the foregoing,
the Borrower agrees that the Participants shall be entitled to the benefits of
Article 9 and Section 11.5 hereof as though they were Lenders and the Lenders,
--------- ------------
subject to the requirements of the Confidentiality Agreement, may provide copies
of all financial information received from the Borrower to such Participants. To
the fullest extent it may effectively do so under Applicable Law, the Borrower
agrees that any Participant may exercise any and all rights of banker's lien,
set-off and counterclaim with respect to its Participation as fully as if such
Participant were the holder of Advances in the amount of its Participation.
(d) Each Lender may assign to one or more financial institutions organized
under the laws of the United States, or any state thereof, or under the laws of
any other country that is a member of the Organization for Economic Cooperation
and Development, or a political subdivision of any such country, which is
engaged in making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business (each, an "Assignee") its rights and obligations
under this Agreement and the other Loan Documents; provided, however, that (i)
-------- -------
each such assignment shall be subject to the prior written consent of the
Administrative Lender and Borrower, which consent shall not be unreasonably
withheld (provided, however, notwithstanding anything herein to the contrary, no
-------- -------
consent of the Borrower is required for any assignment during any time that an
Event of Default pursuant to Section 8.1(b) hereof has occurred and is
--------------
continuing), (ii) each such assignment shall be in a minimum amount of
$5,000,000, (iii) the applicable Lender, Administrative Lender and applicable
Assignee shall execute and deliver to the Administrative Lender an Assignment
and Acceptance Agreement (an "Assignment Agreement") in substantially the form
of Exhibit D hereto, together with the Notes subject to such assignment, (iv)
---------
the applicable Assignee shall have executed and delivered to the Borrower and
the Administrative Lender the Confidentiality Agreement, (v) after giving
effectiveness to such assignment, there are no more than four Lenders, and (vi)
and the Assignee executing the Assignment as the case may be, shall deliver to
the Administrative Lender a processing fee of $3,500. Upon such execution,
delivery and acceptance from and after the effective date specified in each
Assignment, which effective date shall be at least three Business Days after the
execution thereof, (A) the Assignee thereunder shall be party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment, have the rights and obligations of a Lender hereunder and
(B) the applicable Lender shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment, relinquish such
rights and be released from such obligations under this Agreement.
(e) Notwithstanding anything in clause (d) above to the contrary, any
Lender may assign and pledge all or any portion of its Advances and Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of F.R.S.
Board and any Operating Circular issued by such Federal Reserve Bank; provided,
however, that no such assignment under this clause (e) shall release the
assignor Lender from its obligations hereunder.
- 73 -
(f) Upon its receipt of an Assignment Agreement executed by a Lender and an
Assignee, and any Note or Notes subject to such assignment, the Borrower shall,
within five Business Days after its receipt of such Assignment Agreement, at no
expense to the Borrower, execute and deliver to the Administrative Lender in
exchange for the surrendered Notes new Notes to the order of such Assignee in an
amount equal to the portion of the Advances and Commitment assigned to it
pursuant to such Assignment Agreement and new Notes to the order of the
Administrative Lender in an amount equal to the portion of the Advances and
Commitment retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Notes, shall be dated the effective date of such Assignment Agreement and shall
otherwise be in substantially the form of Exhibit A hereto.
---------
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.6, disclose to
------------
the assignee or Participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower, provided such Person has executed a Confidentiality Agreement.
(h) Except as specifically set forth in this Section 11.6, nothing in this
------------
Agreement or any other Loan Documents, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Documents.
(i) Notwithstanding anything in this Section 11.6 to the contrary, no
------------
Assignee or Participant shall be entitled to receive any greater payment under
Section 2.15 or Section 9.3 hereof than such assigning or participating Lender
------------ -----------
would have been entitled to receive with respect to the interest assigned or
participated to such Assignee or Participant.
Section 11.7 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 11.8 Severability. Any provision of this Agreement which is for
------------
any reason prohibited or found or held invalid or unenforceable by any court or
governmental agency shall be ineffective to the extent of such prohibition or
invalidity or unenforceability without invalidating the remaining provisions
hereof in such jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 11.9 Interest and Charges. It is not the intention of any parties
--------------------
to this Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision in any
Loan Documents, no Lender shall ever be entitled to receive, collect or apply,
as interest on the Obligations, any amount in excess of the Maximum Amount. If
any Lender or participant ever receives, collects or applies, as interest,
- 74 -
any such excess, such amount which would be excessive interest shall be deemed a
partial repayment of principal and treated hereunder as such; and if principal
is paid in full, any remaining excess shall be paid to the Borrower. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Maximum Amount, the Borrower and the Lenders shall, to
the maximum extent permitted under Applicable Law, (a) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest, (b)
exclude voluntary prepayments and the effect thereof, and (c) amortize, prorate,
allocate and spread in equal parts, the total amount of interest throughout the
entire contemplated term of the Obligations so that the interest rate is uniform
throughout the entire term of the Obligations; provided, however, that if the
Obligations are paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period of
existence thereof exceeds the Maximum Amount, the Lenders shall refund to the
Borrower the amount of such excess or credit the amount of such excess against
the total principal amount of the Obligations owing, and, in such event, the
Lenders shall not be subject to any penalties provided by any laws for
contracting for, charging or receiving interest in excess of the Maximum Amount.
This Section shall control every other provision of all agreements pertaining to
the transactions contemplated by or contained in the Loan Documents.
Section 11.10 Headings. Headings used in this Agreement are for
--------
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 11.11 Amendment and Waiver. The provisions of this Agreement may
--------------------
not be amended, modified or waived except by the written agreement of the
Borrower and the Determining Lenders; provided, however, that no such amendment,
modification or waiver shall be made (a) without the consent of all Lenders, if
it would (i) increase the Specified Percentage or commitment of any Lender, or
(ii) extend the date of maturity of, extend the due date for any payment of
principal or interest on, reduce the amount of any installment of principal or
interest on, or reduce the rate of interest on, any Advance, the Reimbursement
Obligations or other amount owing under any Loan Documents, or (iii) release any
security for or guaranty of the Obligations (except pursuant to this Agreement),
or (iv) reduce the fees payable hereunder, or (v) revise this Section 11.11, or
-------------
(vi) waive the date for payment of any of the Obligations, or (vii) amend the
definition of Determining Lenders; or (b) without the consent of the
Administrative Lender, if it would alter the rights, duties or obligations of
the Administrative Lender. Neither this Agreement nor any term hereof may be
amended orally, nor may any provision hereof be waived orally but only by an
instrument in writing signed by the Administrative Lender and, in the case of an
amendment, by the Borrower.
Section 11.12 Exception to Covenants. Neither the Borrower nor any
----------------------
Subsidiary shall be deemed to be permitted to take any action or fail to take
any action which is permitted as an exception to any of the covenants contained
herein or which is within the permissible limits of any of the covenants
contained herein if such action or omission would result in the breach of any
other covenant contained herein.
- 75 -
Section 11.13 No Liability of Issuing Bank. The Borrower assumes all
----------------------------
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither the Issuing
Bank nor any Lender nor any of their respective officers or directors shall be
liable or responsible for: (a) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing
Bank against presentation of documents that do not comply with the terms of a
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit, except for any payment made upon the
Issuing Bank's gross negligence or willful misconduct; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower shall have a claim against the Issuing Bank,
------
and the Issuing Bank shall be liable to the Borrower, to the extent of any
direct, but not consequential, damages suffered by the Borrower that the
Borrower proves were caused by (i) the Issuing Bank's willful misconduct or
gross negligence in determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) the Issuing Bank's
willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary.
Section 11.14 Confidentiality Agreement. Each Lender shall,
-------------------------
simultaneously with becoming a party to this Agreement, sign the Confidentiality
Agreement.
SECTION 11.15 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
-------------
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
TEXAS; PROVIDED, HOWEVER, THAT PURSUANT TO ARTICLE 5069-15.10(B), TITLE 79,
REVISED CIVIL STATUTES OF TEXAS, 1925, AS AMENDED, IT IS AGREED THAT THE
PROVISIONS OF CHAPTER 15, TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS
AMENDED, SHALL NOT APPLY TO THE ADVANCES, THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS. THE LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS,
AND BORROWER AND EACH SURETY, GUARANTOR, ENDORSER AND ANY OTHER PARTY EVER
LIABLE FOR PAYMENT OF ANY MONEY PAYABLE WITH RESPECT TO THE LOAN DOCUMENTS
(OTHER THAN THE LENDERS), JOINTLY AND SEVERALLY WAIVE THE RIGHT TO BE SUED
ELSEWHERE. THE BORROWER AND EACH LENDER AGREE THAT THE STATE AND FEDERAL COURTS
OF TEXAS LOCATED IN DALLAS, TEXAS SHALL HAVE JURISDICTION OVER PROCEEDINGS IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
- 76 -
SECTION 11.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
--------------------
ADMINISTRATIVE LENDER AND THE LENDERS HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY
AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS
PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT
AND MAKING ANY ADVANCES HEREUNDER.
SECTION 11.17 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE
----------------
OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
================================================================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
================================================================================
- 77 -
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date first
set forth above.
BORROWER: CompUSA Inc.
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
---------------------------
Title: Vice President - Finance
--------------------------
- 78 -
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------
Title: Senior Vice President
-----------------------------
LENDERS: NATIONSBANK OF TEXAS, N.A.,
as a Lender
Specified Percentage:
13.0000000000%
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------
Title: Senior Vice President
-----------------------------
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxxx
Vice President
- 79 -
BANK ONE, TEXAS, N.A.
Specified Percentage:
10.0%
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------------
Title: Senior Vice President
----------------------------
0000 Xxxx Xxxxxx, 0XXX
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
First Vice President
- 80 -
THE BANK OF NEW YORK
Specified Percentage:
7.3333333333%
By: /s/ Xxxxx XxXxxxxx
-----------------------------------
Name: Xxxxx XxXxxxxx
-----------------------------
Title: Vice President
----------------------------
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxx
- 81 -
THE BANK OF NOVA SCOTIA
Specified Percentage:
7.0000000000%
By: /s/ F.C.H. Xxxxx
--------------------------------------
Name: F.C.H. Xxxxx
--------------------------------
Title:Senior Manager - Loan Operations
--------------------------------
The Bank of Nova Scotia
Atlanta Agency
000 Xxxxxxxxx Xxxxxx X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: F.C.H. Xxxxx
with a copy to:
The Bank of Nova Scotia
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxx
- 82 -
CREDIT SUISSE
Specified Percentage:
5.0%
By: /s/ Xxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxxx
--------------------------
Title:Associate
-------------------------
By: /s/ Xxxxxx X'Xxxxxxx Xxx
---------------------------------
Name: Xxxxxx X'Xxxxxxx Fox
----------------------------
Title:Member of Senior Management
---------------------------
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxxx
Associate
- 83 -
FLEET NATIONAL BANK
Specified Percentage:
7.3333333333%
By: /s/ Xxxxxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
-------------------------
Title:Assistant Vice President
------------------------
One Federal Street, MAOF 0320
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx Xxxxxxx
- 84 -
THE FUJI BANK, LIMITED - HOUSTON AGENCY
Specified Percentage:
7.3333333333%
By: /s/ Xxxxx Xxxxxx
------------------------
Name: Xxxxx Xxxxxx
-------------------
Title:Sr. Vice President
------------------
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx Fort
- 85 -
HIBERNIA NATIONAL BANK
Specified Percentage:
7.0000000000%
By: /s/ Xxxxxxxxx Xxxxxxxx
----------------------
Xxxxxxxxx Xxxxxxxx
Banking Officer
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx
- 00 -
XXXXXX XXXX, N.A.
Specified Percentage:
3.3333333333%
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
-------------------------
Title:Assistant Vice President
------------------------
One Mellon Bank Center, Room 4535
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
- 87 -
THE SAKURA BANK, LIMITED
Specified Percentage:
3.3333333333%
By: /s/ [ILLEGIBLE]
---------------------------
Name:
----------------------
Title:Vice President
---------------------
The Sakura Bank, Limited
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
with a copy to:
The Sakura Bank, Limited
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxx
- 88 -
THE SUMITOMO BANK, LIMITED
Specified Percentage:
5.0%
By: /s/ Xxxxxxxxx Xxxx
---------------------------
Name: Xxxxxxxxx Xxxx
----------------------
Title:General Manager
---------------------
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx
with a copy to:
The Sumitomo Bank, Limited
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxx
- 89 -
UMB BANK, N.A.
Specified Percentage:
3.0000000000%
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Name: Xxxxxxx X. Xxxx
----------------------
Title:Senior Vice President
---------------------
0000 Xxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxx
- 90 -
UNITED STATES NATIONAL BANK OF OREGON
Specified Percentage:
10.0%
By: /s/ Xxxxx X. Xxxxxx
------------------------
Name: Xxxxx X. Xxxxxx
-------------------
Title:Vice President
------------------
000 Xxxxxxxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxxxx Xxxxx
- 91 -
XXXXX FARGO BANK (TEXAS), N.A.
Specified Percentage:
10.0%
By: /s/ Xxxx Xx Xxxx
-----------------------
Name: Xxxx Xx Xxxx
------------------
Title:Vice President
-----------------
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xx Xxxx
Vice President
- 92 -
