EXECUTION COPY
$225,000,000
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
Dated as of April 13, 2000
Among
MICROAGE TECHNOLOGY SERVICES, L.L.C.
and
PINACOR, INC.,
each a Debtor and Debtor in Possession
AS BORROWERS,
MICROAGE, INC.
AS PARENT GUARANTOR,
THE INITIAL LENDERS, INITIAL ISSUING BANK AND
SWING LINE BANK NAMED HEREIN
AS INITIAL LENDERS, INITIAL ISSUING BANK AND SWING LINE BANK,
CITIBANK, N.A.
AS COLLATERAL AGENT,
CITIBANK, N.A.
AS ADMINISTRATIVE AGENT,
T A B L E O F C O N T E N T S
SECTION PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS........................ 2
1.01. Certain Defined Terms....................................... 2
1.02. Computation of Time Periods; Other Definitional Provisions.. 28
1.03. Accounting Terms............................................ 28
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS
OF CREDIT............................................... 28
2.01. The Advances and the Letters of Credit...................... 28
2.02. Making the Advances......................................... 30
2.03. Issuance of and Drawings and Reimbursement Under Letters
of Credit................................................ 32
2.04. Repayment of Advances....................................... 34
2.05. Termination or Reduction of the Commitments................. 35
2.06. Prepayments................................................. 36
2.07. Interest.................................................... 37
2.08. Fees........................................................ 38
2.09. Conversion of Advances...................................... 38
2.10. Increased Costs, Etc........................................ 39
2.11. Payments and Computations................................... 41
2.12. Taxes....................................................... 42
2.13. Sharing of Payments, Etc.................................... 44
2.14. Use of Proceeds............................................. 44
2.15. Defaulting Lenders.......................................... 45
2.16. Evidence of Debt............................................ 48
ARTICLE III CONDITIONS OF LENDING AND ISSUANCES OF LETTERS
OF CREDIT............................................... 48
3.01. Conditions Precedent to Initial Extension of Credit......... 48
3.02. Conditions Precedent to Each Borrowing, Issuance and
Increase of Available Amount............................. 55
3.03. Determinations Under Section 3.01........................... 56
ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................... 56
4.01. Representations and Warranties of the Borrowers and the
Parent Guarantor......................................... 56
ARTICLE V COVENANTS OF THE BORROWERS AND THE PARENT GUARANTOR..... 63
5.01. Affirmative Covenants....................................... 63
5.02. Negative Covenants.......................................... 68
5.03. Reporting Requirements...................................... 75
5.04. Financial Covenants......................................... 79
ARTICLE VI EVENTS OF DEFAULT....................................... 80
6.01. Events of Default........................................... 80
6.02. Actions in Respect of the Letters of Credit upon Default.... 85
ARTICLE VII PARENT GUARANTY......................................... 86
7.01. Guaranty.................................................... 86
7.02. Guaranty Absolute........................................... 86
7.03. Waiver...................................................... 87
7.04. Payments Free and Clear of Taxes, Etc....................... 88
7.05. Continuing Guaranty; Assignments............................ 89
7.06. Subrogation................................................. 90
ARTICLE VII THE AGENTS.............................................. 91
8.01. Authorization and Action.................................... 91
8.02. Agents' Reliance, Etc....................................... 92
8.03. Citibank and Affiliates..................................... 92
8.04. Lender Party Credit Decision................................ 92
8.05. Indemnification............................................. 93
8.06. Successor Agents............................................ 94
8.07. Other Agents................................................ 94
ARTICLE IX MISCELLANEOUS........................................... 95
9.01. Amendments, Etc............................................. 95
9.02. Notices, Etc................................................ 96
9.03. No Waiver; Remedies......................................... 96
9.04. Costs and Expenses.......................................... 96
9.05. Right of Set-off............................................ 98
9.06. Binding Effect.............................................. 98
9.07. Assignments and Participations.............................. 99
9.08. Execution in Counterparts................................... 101
9.09. No Liability of the Issuing Bank............................ 102
9.10. Release of Collateral....................................... 102
9.11. Jurisdiction, Etc........................................... 102
9.12. Governing Law............................................... 103
9.13. Waiver of Jury Trial........................................ 103
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Borrowers' Account
Schedule 3.01(a)(vii) - Jurisdiction of Activity as Foreign Corporation
Schedule 3.01(a)(x) - Eleris Documents
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices
and Filings
Schedule 4.01(f) - Disclosed Litigation
Schedule 4.01(q) - Open Years
Schedule 4.01(s) - Existing Debt
Schedule 4.01(t) - Surviving Debt
Schedule 4.01(u) - Owned Real Property
Schedule 4.01(v) - Leased Real Property
Schedule 4.01(w) - Investments
Schedule 4.01(x) - Intellectual Property
Schedule 5.02(a) - Liens
EXHIBITS
Exhibit A - Form of Promissory Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Subsidiary Guaranty
Exhibit F-1 - Form of Interim Order
Exhibit F-2 - Form of Final Order
Exhibit G - Form of Opinion of Counsel to the Loan Parties
Exhibit H - Form of Opinion of Special Bankruptcy Counsel to the
Loan Parties
Exhibit I - Form of Borrowing Base Certificate
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
Dated as of April 13, 2000
MICROAGE TECHNOLOGY SERVICES, L.L.C., a Delaware limited
liability company ("MTS"), PINACOR, INC., a Delaware corporation ("PINACOR" and
together with MTS, the "BORROWERS"), MICROAGE, INC., a Delaware corporation (the
"PARENT GUARANTOR"), each a debtor and debtor-in-possession under Chapter 11 of
the Bankruptcy Code (11 U.S.C. xx.xx. 101 et seq.; the "BANKRUPTCY CODE"), the
banks, financial institutions and other institutional lenders listed on the
signature pages hereof as the Initial Lenders (the "INITIAL LENDERS"), the bank
listed on the signature pages hereof as the Initial Issuing Bank (the "INITIAL
ISSUING BANK") and the Swing Line Bank (as hereinafter defined), CITIBANK, N.A.
("CITIBANK"), as collateral agent (together with any successor collateral agent
appointed pursuant to Article VIII, the "COLLATERAL AGENT"), and CITIBANK, as
administrative agent (together with any successor administrative agent appointed
pursuant to Article VIII, the "ADMINISTRATIVE AGENT" and, together with the
Collateral Agent, (the "AGENTS") for the Lender Parties (as hereinafter
defined).
PRELIMINARY STATEMENTS
(1) On April 13, 2000 (the "FILING DATE"), the Borrowers, the
Parent Guarantor and each of their respective Subsidiaries (as hereinafter
defined) (other than the Non-Filing Subsidiaries (as hereinafter defined)) filed
petitions under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Arizona (the "BANKRUPTCY COURT").
(2) The Borrowers, the Parent Guarantor and Subsidiaries
(other than the Non-Filing Subsidiaries (as hereinafter defined) have continued
to operate their respective businesses pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
(3) The Pre-Petition Agent (as hereinafter defined) and the
Pre-Petition Lenders (as hereinafter defined) entered into a Credit Agreement
dated as of October 28, 1999, as amended, with the Borrowers secured by the
Pre-Petition Collateral (as hereinafter defined).
(4) The Borrowers and Subsidiaries (other than the Non-Filing
Subsidiaries (as hereinafter defined)) have an immediate need for funds to
continue to operate their businesses.
(5) The Borrowers have requested that the Initial Lenders lend
to the Borrowers up to $225,000,000 pursuant to Sections 105(a), 362, 364(c)(1),
(2), (3) and 364(d) of the Bankruptcy Code in order to refinance the
Pre-Petition Obligations (as hereinafter defined), provide working capital for
the Borrowers and their respective Subsidiaries (other than the Non-
Filing Subsidiaries except as expressly permitted by Section 5.02(y) hereof),
and for other general corporate purposes.
(6) The Parent Guarantor and the Subsidiary Guarantors (as
hereinafter defined) have agreed to guarantee the due and punctual payment and
performance by the Borrowers of the Obligations (as hereinafter defined) to the
Administrative Agent, the Collateral Agent and the Lenders pursuant to the
Subsidiary Guaranty (as hereinafter defined).
(7) The Parent Guarantor, the Borrowers and the Subsidiary
Guarantors have agreed to secure the Obligations with, INTER ALIA, first
priority liens on and security interests in (subject to Permitted Liens (as
hereinafter defined) all property and interests, real and personal, tangible and
intangible, of the Parent Guarantor, the Borrowers and the Subsidiary
Guarantors, whether now owned or hereinafter acquired, all on the terms and
conditions set forth in the Loan Documents (as hereinafter defined), in
accordance with Sections 105(a), 362, 364(c)(1), (2), (3) and 364(d) of the
Bankruptcy Code.
(8) The Lenders have indicated their willingness to lend such
amounts pursuant to Sections 105(a), 362, 364(c)(1), (2), (3) and 364(d) of the
Bankruptcy Code on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"ADMINISTRATIVE AGENT" has the meaning specified in the
recital of parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent with
Citicorp Industrial Credit at its office at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Account No. 00000000, ABA 000000000, Attention: Xxxxx
Xxxxxxxxxxx, or such other account as the Administrative Agent shall
specify in writing to the Lender Parties.
"ADVANCE" means a Working Capital Advance, a Swing Line
Advance or a Letter of Credit Advance.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 5% or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or
otherwise.
2
"AGENTS" has the meaning specified in the recital of parties
to this Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a
Base Rate Advance and such Lender Party's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance.
"APPLICABLE LETTER OF CREDIT FEE" means 2.75% per annum.
"APPLICABLE MARGIN" means 2.00% per annum for Base Rate
Advances and 3.00% per annum for Eurodollar Rate Advances.
"APPLICABLE PERCENTAGE" means .500% per annum.
"ARRANGER" means Xxxxxxx Xxxxx Barney Inc.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted
by the Administrative Agent, in accordance with Section 9.07 and in
substantially the form of Exhibit C hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to
drawing).
"BANKRUPTCY CODE" has the meaning specified in the Preliminary
Statements.
"BANKRUPTCY COURT" has the meaning specified in the
Preliminary Statements.
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced
publicly by Citibank in New York, New York, from time to time, as
Citibank's base rate; and
(b) 1/2 of 1% per annum above the Federal
Funds Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"BLOCKED ACCOUNT" has the meaning specified in the Security
Agreement.
3
"BORROWERS" has the meaning specified in the recital of
parties to this Agreement.
"BORROWERS' ACCOUNT" means the account of the Borrowers
maintained by the Borrowers with Citibank at its office at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, with the account number so designated
on Schedule II, or such other account as the Borrowers shall specify in
writing to the Administrative Agent.
"BORROWERS' PROFESSIONALS" means all Persons retained or
engaged by any Loan Party as professional persons within the meaning of
Section 327 of the Bankruptcy Code.
"BORROWING" means a Working Capital Borrowing or a Swing Line
Borrowing.
"BORROWING BASE CERTIFICATE" means a certificate in
substantially the form of Exhibit I hereto, duly certified by the chief
financial officer of the Parent Guarantor.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any Person for any period,
the sum of, without duplication, (a) all expenditures made, directly or
indirectly, by such Person or any of its Subsidiaries during such
period for equipment, fixed assets, real property or improvements, or
for replacements or substitutions therefor or additions thereto, that
have been or should be, in accordance with GAAP, reflected as additions
to property, plant or equipment on a Consolidated balance sheet of such
Person or have a useful life of more than one year plus (b) the
aggregate principal amount of all Debt (including Obligations under
Capitalized Leases) assumed or incurred in connection with any such
expenditures. For purposes of this definition, the purchase price of
equipment that is purchased simultaneously with the trade-in of
existing equipment or with insurance proceeds shall be included in
Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment
for the equipment being traded in at such time or the amount of such
proceeds, as the case may be.
"CAPITALIZED LEASES" means all leases that have been or should
be, in accordance with GAAP, recorded as capitalized leases.
"CARVE-OUT" means an amount not exceeding in the aggregate
$1,000,000 which amount may be used by the Borrowers after the
occurrence and during the continuance of a Default or an Event of
Default, notwithstanding the Administrative Agent's security interests
for the benefit of the Secured Parties in the Collateral and the
Administrative Agent's rights hereunder, to pay fees or expenses
incurred by the Borrowers constituting (i) allowances of compensation
for services rendered or reimbursement or expenses awarded by the
Bankruptcy Court under Sections 330 and 331 of the Bankruptcy Code or
otherwise, to Borrowers' Professionals, (ii) allowances of compensation
for services rendered or reimbursement of expenses awarded by the
Bankruptcy Court under Section 105(a), 330 or 331 of the Bankruptcy
Code, to accountants, attorneys and other professionals retained in the
Cases by any unsecured creditors' committee appointed in accordance
with Section 1102 of the Bankruptcy Code or any examiner appointed in
accordance with Section 1104 of the Bankruptcy Code other than an
examiner of the type referred to in Section 6.01(t) hereof, (iii) fees
required to be paid to the Office of the United States Trustee under
Section 1930(a), Title 28, United States Code, and (iv) the actual,
necessary expenses, other than compensation, and reimbursement pursuant
to Section 503(b)(4) of the Bankruptcy Code, incurred by a member of a
committee appointed under Section 1102 of the Bankruptcy Code, if such
expenses are incurred in the performance of the duties of such
committee and are allowed by the Bankruptcy Court; provided, however,
that (a) the amount of such fees and expenses shall not exceed
$1,000,000 (in addition to compensation awarded prior to the occurrence
of a Default or Event of Default (whether or not paid)) and (b) such
dollar limitation on fees and disbursements shall not include any
retainer fees paid to the Borrowers' Professionals prior to the Filing
Date (the "RETAINERS") and shall not be reduced by the amount of any
compensation and reimbursement of expenses paid prior to the occurrence
of the Default or Event of Default in respect of which the Carve-Out is
invoked or any fees, expenses, indemnities or other amounts paid to the
Administrative Agent, the Lenders and their attorneys and agents under
this Agreement or otherwise.
4
"CASES" means the cases of the Borrowers and the Subsidiary
Guarantors (other than the Non-Filing Subsidiaries) pursuant to Chapter
11 of the Bankruptcy Code pending in the Bankruptcy Court.
"CASH CONCENTRATION ACCOUNT" has the meaning specified in the
Security Agreement.
"CASH EQUIVALENTS" means any of the following, to the extent
owned by the Parent Guarantor or any of its Subsidiaries free and clear
of all Liens other than Liens created under the Collateral Documents
and having a maturity of not greater than 180 days from the date of
acquisition thereof: (a) readily marketable direct obligations of the
Government of the United States or any agency or instrumentality
thereof or obligations unconditionally guaranteed by the full faith and
credit of the Government of the United States, (b) insured certificates
of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System, issues (or the
parent of which issues) commercial paper rated as described in clause
(c) below, is organized under the laws of the United States or any
State thereof and has combined capital and surplus of at least $1
billion or (c) commercial paper in an aggregate amount of no more than
$1,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United States
and rated at least "Prime-1" (or the then equivalent grade) by Xxxxx'x
Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
5
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CHANGE OF CONTROL" means the occurrence of any of the
following: (a) any Person (other than Xxxxxxx XxXxxxxx) or two or more
Persons acting in concert shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Stock of the Parent Guarantor (or other
securities convertible into such Voting Stock) representing 20% or more
of the combined voting power of all Voting Stock of the Parent
Guarantor; or (b) during any period of up to 24 consecutive months,
commencing before or after the date of this Agreement, individuals who
at the beginning of such 24-month period were directors of the Parent
Guarantor shall cease for any reason to constitute a majority of the
board of directors of the Parent Guarantor; or (c) any Person or two or
more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that,
upon consummation, will result in its or their acquisition of the power
to exercise, directly or indirectly, a controlling influence over the
management or policies of the Parent Guarantor or (d) Xxxxxxx XxXxxxxx
shall sell more than 50% of his ownership of the combined voting power
of the Voting Stock of the Parent Guarantor.
"COLLATERAL" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of the Collateral Agent for the benefit
of the Secured Parties.
"COLLATERAL AGENT" has the meaning specified in the recital of
parties to this Agreement.
"COLLATERAL DOCUMENTS" means the Security Agreement and any
other agreement that creates or purports to create a Lien in favor of
the Collateral Agent for the benefit of the Secured Parties.
"COMMITMENT" means a Working Capital Commitment or a Letter of
Credit Commitment.
"CONFIDENTIAL INFORMATION" means information that any Loan
Party furnishes to any Agent or any Lender Party in a writing
designated as confidential, but does not include any such information
that is or becomes generally available to the public or that is or
becomes available to such Agent or such Lender Party from a source
other than the Loan Parties.
6
"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONSOLIDATING" refers to the presentation of the Consolidated
financial statements of the Parent Guarantor and the Consolidated
financial statements of each Borrower.
"CONTINGENT OBLIGATION" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations
("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in
any manner, whether directly or indirectly, including, without
limitation, (a) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to
make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement or (c) any
Obligation of such Person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder of
such primary obligation against loss in respect thereof. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable
pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is
required to perform thereunder), as determined by such Person in good
faith.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.09 or 2.10.
"DEBT" of any Person means, without duplication for purposes
of calculating financial ratios, (a) all indebtedness of such Person
for borrowed money, (b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade payables not
overdue by more than 60 days incurred in the ordinary course of such
Person's business), (c) all Obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all
Obligations of such Person created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Obligations
of such Person as lessee under Capitalized Leases, (f) all Obligations
of such Person under acceptance, letter of credit or similar
facilities, (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any capital
stock of or other ownership or profit interest in such Person or any
other Person or any warrants, rights or options to acquire such capital
stock, valued, in the case of Redeemable Preferred Stock, at the
greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (h) [intentionally omitted], (i) all
Contingent Obligations of such Person and (j) all indebtedness and
other payment Obligations referred to in clauses (a) through (i) above
of another Person secured by (or for which the holder of such Debt has
an existing right, contingent or otherwise, to be secured by) any Lien
on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness or other payment
Obligations.
"DEBT FOR BORROWED MONEY" of any Person means all Debt of the
types described in clauses (a) through (e) of the definition of "Debt"
less amounts on deposit in the Cash Concentration Account.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DEFAULT TERMINATION NOTICE" has the meaning specified in
Section 2.01(c).
7
"DEFAULTED ADVANCE" means, with respect to any Lender Party at
any time, the portion of any Advance required to be made by such Lender
Party to the Borrowers pursuant to Section 2.01 or 2.02 at or prior to
such time which has not been made by such Lender Party or by the
Administrative Agent for the account of such Lender Party pursuant to
Section 2.02(e) as of such time. In the event that a portion of a
Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the
remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section
2.01 on the same date as the Defaulted Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any Lender Party at
any time, any amount required to be paid by such Lender Party to any
Agent or any other Lender Party hereunder or under any other Loan
Document at or prior to such time which has not been so paid as of such
time, including, without limitation, any amount required to be paid by
such Lender Party to (a) the Swing Line Bank pursuant to Section
2.02(b) to purchase a portion of a Swing Line Advance made by the Swing
Line Bank, (b) the Issuing Bank pursuant to Section 2.03(c) to purchase
a portion of a Letter of Credit Advance made by the Issuing Bank, (c)
the Administrative Agent pursuant to Section 2.02(e) to reimburse the
Administrative Agent for the amount of any Advance made by the
Administrative Agent for the account of such Lender Party, (d) any
other Lender Party pursuant to Section 2.13 to purchase any
participation in Advances owing to such other Lender Party and (e) any
Agent or the Issuing Bank pursuant to Section 8.05 to reimburse such
Agent or the Issuing Bank for such Lender Party's ratable share of any
amount required to be paid by the Lender Parties to such Agent or the
Issuing Bank as provided therein. In the event that a portion of a
Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the
remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be paid hereunder or under any
other Loan Document on the same date as the Defaulted Amount so deemed
paid in part.
8
"DEFAULTING LENDER" means, at any time, any Lender Party that,
at such time, owes a Defaulted Advance or a Defaulted Amount.
"DISCLOSED LITIGATION" has the meaning specified in Section
3.01(g).
"DOMESTIC LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or the in the
Assignment and Acceptance pursuant to which it became a Lender Party,
as the case may be, or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrowers and the
Administrative Agent.
"DOMESTIC SUBSIDIARY" means any Subsidiary other than a
Foreign Subsidiary.
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis, of (a) net income (or net loss), (b) interest
expense (including implied interest expenses flooring subsidies, in
each case determined on a basis consistent with past practice), (c)
income tax expense, (d) depreciation expense, (e) amortization expense,
(f) extraordinary, non-recurring, transactional or unusual losses
deducted in calculating net income less extraordinary, non-recurring,
transactional or unusual gains added in calculating net income and (g)
any non-cash expenses, non-cash losses or other non-cash charges
resulting from the writedown in the valuation of any assets in each
case of the Parent Guarantor and its Subsidiaries, determined in
accordance with GAAP for such period.
"ELERIS DOCUMENTS" has the meaning specified in Section
3.01(a)(x).
"ELIGIBLE ASSIGNEE" means (a) with respect to any Facility
(other than the Letter of Credit Facility), (i) a Lender; (ii) an
Affiliate of a Lender; (iii) a commercial bank organized under the laws
of the United States, or any State thereof, and having total assets in
excess of $2,000,000,000; (iv) a savings and loan association or
savings bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $2,000,000,000; (v)
a commercial bank organized under the laws of any other country that is
a member of the OECD or has concluded special lending arrangements with
the International Monetary Fund associated with its General
Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
$2,000,000,000, so long as such bank is acting through a branch or
agency located in the country in which it is organized or another
country that is described in this clause (v); (vi) the central bank of
any country that is a member of the OECD; (vii) a finance company or
other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary
course of business and having a combined capital and surplus of at
least $250,000,000 and (viii) any other Person approved by the
Administrative Agent and, unless a Default has occurred and is
continuing at the time any assignment is effected pursuant to Section
9.07, the Parent Guarantor, such approval not to be unreasonably
withheld or delayed, and (b) with respect to the Letter of Credit
Facility, a Person that is an Eligible Assignee under subclause (iii)
or (v) of clause (a) of this definition and is approved by the
Administrative Agent and, unless a Default has occurred and is
continuing at the time any assignment is effected pursuant to Section
9.07, the Parent Guarantor, such approval not to be unreasonably
withheld or delayed; PROVIDED, HOWEVER, that neither any Loan Party nor
any Affiliate of a Loan Party shall qualify as an Eligible Assignee
under this definition.
9
"ELIGIBLE CASH" means only such cash or Cash Equivalents of
the Borrowers as is on deposit in the Cash Concentration Account
"ELIGIBLE COLLATERAL" means, collectively, Eligible Inventory,
Eligible Receivables and Eligible Cash.
"ELIGIBLE INVENTORY" means only such Inventory of the Loan
Parties as the Administrative Agent, in its sole discretion, shall from
time to time elect to consider Eligible Inventory for purposes of this
Agreement. The value of such Inventory shall be determined by the
Administrative Agent in its sole discretion exercised commercially
reasonably in accordance with customary business practices and taking
into consideration, among other factors, the lowest of its cost, its
book value determined in accordance with GAAP and its liquidation
value. The following classes of Inventory shall not be Eligible
Inventory:
(a) Inventory that is obsolete, unusable or otherwise
unavailable for sale;
(b) Inventory with respect to which the
representations and warranties set forth in the Collateral
Documents applicable to Inventory are not true and correct;
(c) Inventory consisting of promotional, marketing,
packaging or shipping materials and supplies;
(d) Inventory that fails to meet all standards
imposed by any governmental agency, or department or division
thereof, having regulatory authority over such Inventory or
its use or sale;
10
(e) Inventory that is subject to any licensing,
patent, royalty, trademark, trade name or copyright agreement
with any third party from whom any Loan Party has received
notice of a dispute in respect of any such agreement;
(f) Inventory located outside the United States;
(g) Inventory that is not in the possession of or
under the sole control of the Loan Parties; and
(h) Inventory in respect of which the
Security Agreement, after giving effect to the related filings
of financing statements that have then been made, if any, does
not or has ceased to create a valid and perfected first
priority lien or security interest in favor of the Collateral
Agent for the benefit of the Secured Parties securing the
Secured Obligations.
"ELIGIBLE RECEIVABLES" means only such Receivables of the Loan
Parties (other than the Non-Filing Subsidiaries) as the Administrative
Agent, in its sole discretion, shall from time to time elect to
consider Eligible Receivables for purposes of this Agreement. The value
of such Receivables shall be determined by the Administrative Agent in
its sole discretion exercised commercially reasonably in accordance
with customary business practices and taking into consideration, among
other factors, their book value determined in accordance with GAAP. Not
withstanding the foregoing, none of the following classes of
Receivables shall be Eligible Receivables:
(a) Receivables that do not arise out of sales of
goods or rendering of services in the ordinary course of the
business of the Loan Parties;
(b) Receivables on terms other than those normal or
customary in the business of the Loan Parties;
(c) Receivables owing from any Person that is an
Affiliate of any Loan Party or any of its Subsidiaries;
(d) Receivables more than 90 days past the original
invoice date or more than 60 days past the date due;
(e) Receivables owing from any Person from which an
aggregate amount of more than 50% of the Receivables owing is
more than 60 days past due;
(f) Receivables owing from any Person that (i) has
disputed liability for any Receivable owing from such Person
or (ii) has otherwise asserted any claim, demand or liability
against any Loan Party or any of its Subsidiaries, whether by
action, suit, counterclaim or otherwise;
11
(g) Receivables owing from any Person that shall take
or be the subject of any action or proceeding of a type
described in Section 6.01(i);
(h) Receivables (i) owing from any Person that is
also a supplier to or creditor of any Loan Party or (ii)
representing any manufacturer's or supplier's credits,
discounts, incentive plans or similar arrangements entitling
any Loan Party to discounts on future purchase therefrom;
(i) Receivables arising out of sales to account
debtors outside the United States unless such Receivables are
fully backed by an irrevocable letter of credit on terms, and
issued by a financial institution, acceptable to the
Administrative Agent and such irrevocable letter of credit is
in the possession of the Collateral Agent or the
Administrative Agent;
(j) Receivables arising out of sales on a
xxxx-and-hold, guaranteed sale, sale-or-return, sale on
approval or consignment basis or subject to any right of
return, set-off or charge-back;
(k) Receivables owing from an account debtor that is
an agency, department or instrumentality of the United States
or any State thereof unless the applicable Loan Party shall
have satisfied the requirements of the Assignment of Claims
Act of 1940, as amended, and any similar State legislation and
the Administrative Agent is satisfied as to the absence of
set-offs, counterclaims and other defenses on the part of such
account debtor;
(l) Receivables the full and timely payment of which
the Administrative Agent in its sole discretion believes to be
doubtful; and
(m) Receivables in respect of which the Security
Agreement, after giving effect to the related filings of
financing statements that have then been made, if any, does
not or has ceased to create a valid and perfected first
priority lien or security interest in favor of the Collateral
Agent for the benefit of the Secured Parties securing the
Secured Obligations.
"EMPLOYMENT AGREEMENTS" has the meaning specified in Section
3.01(a)(xiv).
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
12
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"EQUIPMENT" means all Equipment referred to in Section 1(a) of
the Security Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of any Loan Party, or
under common control with any Loan Party, within the meaning of Section
414 of the Internal Revenue Code.
"ERISA EVENT" means (a)(i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event
has been waived by the PBGC or (ii) the requirements of Section 4043(b)
of ERISA apply with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations at a facility of any Loan Party or any ERISA Affiliate in
the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any Loan Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions
for imposition of a lien under Section 302(f) of ERISA shall have been
met with respect to any Plan; (g) the adoption of an amendment to a
Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (h) the institution by the PBGC of proceedings
to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of
a trustee to administer, such Plan.
13
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or the in the
Assignment and Acceptance pursuant to which it became a Lender Party
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender Party as such Lender Party may from
time to time specify to the Borrowers and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate per annum at which deposits in U.S. dollars are
offered by the principal office of Citibank in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to Citibank's Eurodollar Rate Advance comprising
part of such Borrowing to be outstanding during such Interest Period
and for a period equal to such Interest Period by (b) a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest
as provided in Section 2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXCESS AVAILABILITY" means the difference between (A) the sum
of the Loan Values of the Eligible Collateral MINUS $16,000,000 and (B)
the aggregate principal amount of the Working Capital Advances PLUS
Swing Line Advances PLUS Letter of Credit Advances to be outstanding
PLUS the aggregate Available Amount of all Letters of Credit to be
outstanding after giving effect to such Advance, issuance, renewal or
increase, respectively.
"EXISTING DEBT" has the meaning specified in Section 4.01(s)
hereof.
14
"FACILITY" means the Working Capital Facility, the Swing Line
Facility or the Letter of Credit Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"FEE LETTER" means the fee letter dated April 12, 2000 between
the Parent Guarantor and the Administrative Agent, as amended.
"FILING DATE" has the meaning specified in the Preliminary
Statements.
"FINAL ORDER" has the meaning specified in Section 3.02(b).
"FIRST DAY ORDERS" means those orders presented to the
Bankruptcy Court in the Cases for consideration on the first day of the
Cases, regardless of whether such orders are entered on the first day
of the Cases or shortly thereafter.
"FISCAL YEAR" means a fiscal year of the Parent Guarantor and
its Consolidated Subsidiaries ending on the Sunday nearest to October
31 in any calendar year.
"FLOOR PLANNING ARRANGEMENTS" means the (i) Agreement for
Inventory Financing dated as of April 13, 2000 by and between IBM
Credit Corporation, MicroAge Computer Centers, Inc., MTS Holding
Company, MicroAge Technology Services, L.L.C., Pinacor and MicroAge,
Inc., and (ii) inventory financing arrangements between Finova Capital
Corporation and Pinacor, MicroAge Computer Center, Inc., and MicroAge,
Inc. of inventory and equipment of authorized suppliers as specified in
the terms of such arrangements; as each of the foregoing agreements may
from time to time be amended, supplemented or otherwise modified as
permitted in, and in accordance with, the terms of this Agreement.
"FOREIGN SUBSIDIARY" means a Subsidiary organized under the
laws of a jurisdiction other than the United States or any State
thereof or the District of Columbia.
"GAAP" has the meaning specified in Section 1.03.
"GUARANTIES" means the Parent Guaranty and the Subsidiary
Guaranty.
15
"GUARANTORS" means the Parent Guarantor and the Subsidiary
Guarantors.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"IMMATERIAL SUBSIDIARY" means any Subsidiary of the Parent
Guarantor the total assets of which do not exceed $25,000.
"INDEMNIFIED PARTY" has the meaning specified in Section
9.04(b).
"INFORMATION MEMORANDUM" means any information memorandum used
by the Arranger in connection with the syndication of the Commitments.
"INITIAL EXTENSION OF CREDIT" means the earlier to occur of
the initial Borrowing and the initial issuance of a Letter of Credit
hereunder.
"INITIAL ISSUING BANK" has the meaning specified in the
recital of parties to this Agreement.
"INITIAL LENDERS" has the meaning specified in the recital of
parties to this Agreement.
"INSUFFICIENCY" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"INTERCREDITOR AGREEMENT" has the meaning specified in Section
3.01(a).
"INTEREST COVERAGE RATIO" means, at any date of determination,
the ratio of (a) Consolidated EBITDA to (b) interest payable on, and
amortization of debt discount in respect of, all Debt for Borrowed
Money (including expenses incurred under the Receivables Sales
Agreements and flooring subsidies), in each case, of or by the Parent
Guarantor and its Subsidiaries during the applicable period most
recently ended for which financial statements are required to be
delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as
the case may be.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the Borrowers pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrowers pursuant to the
provisions below. The duration of each such Interest Period shall be
(except as provided for in Section 2.02(c)) one, two, three or six
months, as the Borrowers may, upon notice received by the
Administrative Agent not later than 1:00 P.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period,
select; PROVIDED, HOWEVER, that:
16
(a) the Borrowers may not select any Interest Period
that ends after the Termination Date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, PROVIDED, HOWEVER, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"INTERIM ORDER" has the meaning specified in Section
3.01(a)(i).
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"INVENTORY" means all Inventory referred to in Section 1(b) of
the Security Agreement.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock or other
ownership or profit interest, warrants, rights, options, obligations or
other securities or the assets comprising a division or a business unit
or a substantial part or all of the business of such Person, any
capital contribution to such Person or any other direct or indirect
investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation and any arrangement
pursuant to which the investor incurs Debt of the types referred to in
clause (i) or (j) of the definition of "DEBT" in respect of such
Person.
17
"ISSUING BANK" means the Initial Issuing Bank and any Eligible
Assignee to which a Letter of Credit Commitment hereunder has been
assigned pursuant to Section 9.07 so long as such Eligible Assignee
expressly agrees to perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be
performed by it as an Issuing Bank and notifies the Administrative
Agent of its Applicable Lending Office and the amount of its Letter of
Credit Commitment (which information shall be recorded by the
Administrative Agent in the Register), for so long as such Initial
Issuing Bank or Eligible Assignee, as the case may be, shall have a
Letter of Credit Commitment.
"L/C CASH COLLATERAL ACCOUNT" means the collateral account
with Citibank, N.A., at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, in the name of the Collateral Agent and under the sole
control and dominion of the Collateral Agent.
"L/C RELATED DOCUMENTS" has the meaning specified in Section
2.04(c)(ii).
"LENDER PARTY" means any Lender, the Issuing Bank or the Swing
Line Bank.
"LENDERS" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 9.07 for so long as such
Initial Lender or Person, as the case may be, shall be a party to this
Agreement.
"LETTER OF CREDIT ADVANCE" means an advance made by the
Issuing Bank or any Lender pursuant to Section 2.03(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in
Section 2.03(a).
"LETTER OF CREDIT COMMITMENT" means, with respect to the
Issuing Bank at any time, the amount set forth opposite the Issuing
Bank's name on Schedule I hereto under the caption "Letter of Credit
Commitment" or, if the Issuing Bank has entered into one or more
Assignment and Acceptances, set forth for the Issuing Bank in the
Register maintained by the Administrative Agent pursuant to Section
9.07(d) as the Issuing Bank's "Letter of Credit Commitment", as such
amount may be reduced at or prior to such time pursuant to Section
2.05.
"LETTER OF CREDIT FACILITY" means, at any time, an amount
equal to the lesser of (a) the amount of the Issuing Bank's Letter of
Credit Commitment at such time and (b) $[50,000,000], as such amount
may be reduced at or prior to such time pursuant to Section 2.05.
"LETTERS OF CREDIT" means (i) the letters of credit defined in
Section 2.01(c), and (ii) each letter of credit issued and outstanding
as of the Filing Date under the Pre-Petition Credit Agreement.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
18
"LOAN DOCUMENTS" means (a) for purposes of this Agreement and
the Notes and any amendment, supplement or modification hereof or
thereof, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv)
the Collateral Documents, (v) the Fee Letter, (vi) each Letter of
Credit Agreement, and (vii) the Intercreditor Agreement, and (b) for
purposes of the Guaranties and the Collateral Documents and for all
other purposes other than for purposes of this Agreement and the Notes,
(i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the
Collateral Documents, (v) the Fee Letter, (vi) each Letter of Credit
Agreement, and (vii) the Intercreditor Agreement, in each case as
amended.
"LOAN PARTIES" means the Borrowers and the Guarantors.
"LOAN VALUE" means, with respect to any Eligible Collateral,
an amount equal to (a) with respect to Eligible Receivables, up to 85%
of the value of Eligible Receivables; (b) with respect to Eligible
Inventory, up to 75% of the value of Eligible Inventory less than 90
days old PLUS up to 50% of the value of Eligible Inventory over 90 days
old PLUS up to 60% of the value of Eligible Inventory less than 90 days
old and located at branch facilities PLUS up to 35% of the value of
Eligible Inventory over 90 days old and located at branch facilities
PLUS up to 40% of the value of Eligible Inventory that is returned and
less than 90 days old PLUS up to 40% of the value of Eligible Inventory
less than 90 days old and located at clearance centers LESS a
liquidation reserve of $15,000,000 (but in no case shall the Loan Value
with respect to Eligible Inventory, as calculated above and after
giving effect to the reduction of the foregoing liquidation reserve,
exceed $30,000,000); and (c) with respect to Eligible Cash, up to 99%
of the value of Eligible Cash, or, in each case, such lower percentage
of the value of any item of Eligible Collateral determined by the
Administrative Agent in its sole discretion exercised commercially
reasonably in accordance with customary business practice, PROVIDED
that the Administrative Agent shall give five Business Days notice of
any change in the foregoing percentages.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of any of the Parent Guarantor,
the Parent Guarantor and its Subsidiaries taken as a whole, MTS, MTS
and its Subsidiaries taken as a whole, Pinacor or Pinacor and its
Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of any of the Parent Guarantor,
the Parent Guarantor and its Subsidiaries taken as a whole, MTS, MTS
and its Subsidiaries taken as a whole, Pinacor or Pinacor and its
Subsidiaries taken as a whole, (b) the rights and remedies of any Agent
or any Lender Party under any Transaction Document or (c) the ability
of any Loan Party to perform its Obligations under any Transaction
Document to which it is or is to be a party.
19
"MORTGAGES" has the meaning specified in Section 3.01(a)(xvi).
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"NET CASH PROCEEDS" means, with respect to any sale, lease,
transfer or other disposition of any asset or the incurrence or
issuance of any Debt or the sale or issuance of capital stock or other
ownership or profit interest (including, without limitation, any
capital contribution) or any securities convertible into or
exchangeable for capital stock or other ownership or profit interest or
any warrants, rights, options or other securities to acquire capital
stock or other ownership or profit interest by any Person, the
aggregate amount of cash received from time to time (whether as initial
consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a)
reasonable and customary closing costs, brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees and other
similar fees and commissions, (b) the amount of taxes payable in
connection with or as a result of such transaction and (c) the amount
of any Debt secured by a Lien on such asset that, by the terms of the
agreement or instrument governing such Debt, is required to be repaid
upon such disposition, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of
such cash, actually paid to a Person that is not an Affiliate of such
Person or any Loan Party or any Affiliate of any Loan Party and are
properly attributable to such transaction or to the asset that is the
subject thereof; PROVIDED, HOWEVER, that in the case of taxes that are
deductible under clause (b) above but for the fact that, at the time of
receipt of such cash, such taxes have not been actually paid or are not
then payable, such Loan Party or such Subsidiary may deduct an amount
(the "RESERVED AMOUNT") equal to the amount reserved in accordance with
GAAP for such Loan Party's or such Subsidiary's reasonable estimate of
such taxes, other than taxes for which such Loan Party or such
Subsidiary is indemnified, PROVIDED FURTHER, HOWEVER, that, at the time
such taxes are paid, an amount equal to the amount, if any, by which
the Reserved Amount for such taxes exceeds the amount of such taxes
actually paid shall constitute "Net Cash Proceeds" of the type for
which such taxes were reserved for all purposes hereunder.
20
"NON-FILING SUBSIDIARIES" means 153000 Canada Ltd., Connect
Works, Inc., Contract PC, Inc., Eleris, Inc., InterPC de Colombia,
InterPC de Venezuela, IntraCom Marketing, Inc., MaxSource, L.L.C.,
MCSS, Inc., MicroAge Administration, Inc., MicroAge Deutschland Gmbh,
MicroAge Europe Limited, MicroAge Government, Inc., MicroAge
Infosystems Services, Inc., MicroAge Infosystems Services Europe
Limited, MicroAge Paymaster, Inc., MicroAge Technologies, Inc.,
MicroAge Teleservices, L.L.C., MicroAge (U.K.) Limited, MicroAge
Ventures, Inc., PC Clearance, Inc., Phoenix Connections, Inc. and
Pri-Tech Solutions, Inc.
"NOTE" means a promissory note of the Borrowers payable to the
order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness to such Lender resulting from the
Working Capital Advances, Letter of Credit Advances and Swing Line
Advances made by such Lender, as amended.
"NOTICE OF BORROWING" has the meaning specified in Section
2.02(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section
2.03(a).
"NOTICE OF RENEWAL" has the meaning specified in Section
2.01(c).
"NOTICE OF SWING LINE BORROWING" has the meaning specified in
Section 2.02(b).
"NOTICE OF TERMINATION" has the meaning specified in Section
2.01(c).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by the cases or any other proceeding referred to in Section
6.01(i). Without limiting the generality of the foregoing, the
Obligations of any Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions,
charges, expenses, fees, attorneys' fees and disbursements, indemnities
and other amounts payable by such Loan Party under any Loan Document
and (b) the obligation of such Loan Party to reimburse any amount in
respect of any of the foregoing that any Lender Party, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
21
"OPEN YEAR" has the meaning specified in Section 4.01(q)(ii).
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PARENT GUARANTOR" has the meaning specified in the recital of
parties to this Agreement.
"PARENT GUARANTY" means the guaranty of the Parent Guarantor
set forth in Article VII of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid
under Section 5.01(b); (b) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens and other
similar Liens arising in the ordinary course of business securing
obligations that (i) are not overdue for a period of more than 30 days
and (ii) individually or together with all other Permitted Liens
outstanding on any date of determination do not materially adversely
affect the use of the property to which they relate; (c) pledges or
deposits to secure obligations under workers' compensation laws or
similar legislation or to secure public or statutory obligations; and
(d) easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property
for its present purposes.
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer
Plan.
"PLEDGED DEBT" has the meaning specified in the Security
Agreement.
"PREFERRED STOCK" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a
preference or priority over any other capital stock issued by such
corporation upon any distribution of such corporation's assets, whether
by dividend or upon liquidation.
"PRE-PETITION AGENT" means Citibank, N.A. in its capacity as
administrative agent and collateral agent for the Pre-Petition Lenders
under the Pre-Petition Credit Agreement.
22
"PRE-PETITION COLLATERAL" means the "Collateral" as defined in
the Pre-Petition Credit Agreement.
"PRE-PETITION COLLATERAL DOCUMENTS"means any agreement that
created or purported to create a Lien in favor of the Pre-Petition
Agent for the benefit of the Pre-Petition Lenders in connection with
the Pre-Petition Credit Agreement.
"PRE-PETITION CREDIT AGREEMENT" has the meaning specified in
the Preliminary Statements.
"PRE-PETITION FEE LETTER" means the fee letter dated October
28, 1999 between the Parent Guarantor and the Pre-Petition Agent.
"PRE-PETITION GUARANTEES" means the guarantees executed by the
Parent Guarantor and the Subsidiary Guarantors guaranteeing the
obligations of the Loan Parties under the Pre-Petition Credit
Agreement.
"PRE-PETITION INVENTORY FINANCING AGREEMENTS" means (i) the
Agreement for Inventory Financing dated October 29, 1999 between IBM
Credit Corporation, MicroAge Computer Centers, Inc., MTS Holding
Company, MicroAge Technology Services, L.L.C. and Pinacor, (ii) the
Security Agreement - General Line dated as of December 15, 1999 among
Pinacor, MicroAge Technology Services, L.L.C. and Apple Computer, Inc.,
(iii) the Dealer Loan and Security Agreement dated as of May 17, 1999
among Finova Capital Corporation, MicroAge Computer Centers, Inc.,
Pinacor and MicroAge, Inc., and (iv) the HP Reseller Business Terms and
Amendment dated June 15, 1999 from Hewlett Packard to MicroAge, Inc.;
as each of the foregoing agreements and arrangements has been amended,
supplemented or otherwise modified.
"PRE-PETITION LENDERS" means the banks, financial institutions
and other institutional lenders under the Pre-Petition Credit
Agreement.
"PRE-PETITION LETTER OF CREDIT AGREEMENT" means any
application or agreement in connection with a letter of credit issued
under the Pre-Petition Credit Agreement.
"PRE-PETITION LOAN DOCUMENTS" means (i) the Pre-Petition
Credit Agreement, (ii) the Pre-Petition Notes, (iii) the Pre-Petition
Guarantees, (iv) the Pre-Petition Collateral Documents, (v) the
Pre-Petition Fee Letter, (vi) each Pre-Petition Letter of Credit
Agreement and (vii) each Pre-Petition Inventory Financing Agreement,
and (viii) each Pre-Petition Secured Hedge Agreement.
"PRE-PETITION NOTES" means the promissory notes of the
Borrowers payable to the order of the Pre-Petition Lenders evidencing
the aggregate indebtedness to the Pre-Petition Lenders.
"PRE-PETITION OBLIGATIONS" means all amounts owing to the
Pre-Petition Agent or any Pre-Petition Lender pursuant to the terms of
the Pre-Petition Credit Agreement, any other Pre-Petition Loan Document
or any agreement, instrument or document executed and delivered in
connection with any thereof. Without limiting the generality of the
foregoing, the aggregate amount from time to time available to be drawn
under letters of credit issued pursuant to the Pre-Petition Credit
Agreement (assuming compliance with all conditions precedent) shall be
deemed, for purposes of this definition, to constitute an amount then
owing to the Pre-Petition Lenders pursuant to the terms of the
Pre-Petition Credit Agreement.
23
"PRE-PETITION SECURE HEDGE AGREEMENTS" means interest rate
swap, cap or collar agreements, interest rate future or option
contracts, currency swap agreements, currency future or option
contracts and other hedging agreements permitted or required under the
terms of the Pre-Petition Credit Agreement between any Loan Party and
Pre-Petition Lender or Affiliate of a Pre-Petition Lender as party to
such agreements.
"PRO RATA SHARE" of any amount means, with respect to any
Lender at any time, the product of such amount TIMES a fraction the
numerator of which is the amount of such Lender's Working Capital
Commitment at such time (or, if the Commitments shall have been
terminated pursuant to Section 2.05 or 6.01, such Lender's Working
Capital Commitment as in effect immediately prior to such termination)
and the denominator of which is the Working Capital Facility at such
time (or, if the Commitments shall have been terminated pursuant to
Section 2.05 or 6.01, the Working Capital Facility as in effect
immediately prior to such termination).
"RECEIVABLES" means all Receivables referred to in Section
1(c) of the Security Agreement.
"REDEEMABLE" means, with respect to any capital stock or other
ownership or profit interest, Debt or other right or Obligation, any
such right or Obligation that (a) the issuer has undertaken to redeem
at a fixed or determinable date or dates, whether by operation of a
sinking fund or otherwise, or upon the occurrence of a condition not
solely within the control of the issuer or (b) is redeemable at the
option of the holder.
"REGISTER" has the meaning specified in Section 9.07(d).
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means any intercompany notes issued
pursuant to Section 5.02(b)(ii), each Pre-Petition Inventory Financing
Agreement, the Floor Planning Arrangements and the Eleris Documents.
"REORGANIZATION PLAN" means a plan of reorganization in any of
the Cases.
"REQUIRED LENDERS" means, at any time, Lenders owed or holding
at least a majority in interest of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and (b) the
aggregate Available Amount of all Letters of Credit outstanding at such
time, or, if no such principal amount and no Letters of Credit are
outstanding at such time, Lenders holding at least a majority in
interest of the aggregate of Working Capital Commitments PROVIDED,
HOWEVER, that if any Lender shall be a Defaulting Lender at such time,
there shall be excluded from the determination of Required Lenders at
such time (A) the aggregate principal amount of the Advances owing to
such Lender (in its capacity as a Lender) and outstanding at such time,
(B) such Lender's Pro Rata Share of the aggregate Available Amount of
all Letters of Credit outstanding at such time and (C) the Unused
Working Capital Commitment of such Lender at such time. For purposes of
this definition, the aggregate principal amount of Swing Line Advances
owing to the Swing Line Bank and of Letter of Credit Advances owing to
the Issuing Bank and the Available Amount of each Letter of Credit
shall be considered to be owed to the Lenders ratably in accordance
with their respective Working Capital Commitments.
24
"RESPONSIBLE OFFICER" means any officer of any Loan Party or
any of its Subsidiaries.
"SECURED OBLIGATIONS" has the meaning specified in the
Security Agreement.
"SECURED PARTIES" means the Agents and the Lender Parties.
"SECURITY AGREEMENT" has the meaning specified in Section
3.01(a)(ii).
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and no Person other
than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4069 of ERISA in the event such plan has
been or were to be terminated.
"STANDBY LETTER OF CREDIT" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Trade Letter of
Credit.
"SUBSIDIARY" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and 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 limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
25
"SUBSIDIARY GUARANTORS" means all Subsidiaries of the Parent
Guarantor and each other Subsidiary of any of them that shall be
required to execute and deliver a guaranty pursuant to Section 5.01(j)
or Section 5.01(k).
"SUBSIDIARY GUARANTY" means a guaranty in substantially the
form of Exhibit E, together with each other guaranty delivered pursuant
to Section 5.01(j), in each case as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with
its terms.
"SUPER-PRIORITY CLAIM" means a claim against either Borrower
or any other Loan Party in any of the Cases which is an administrative
expense claim having priority over any or all administrative expenses
of the kind specified in Section 503(b) or 507(b) of the Bankruptcy
Code.
"SURVIVING DEBT" has the meaning specified in Section 3.01(e).
"SWING LINE ADVANCE" means an advance made by (a) the Swing
Line Bank pursuant to Section 2.01(b) or (b) any Lender pursuant to
Section 2.02(b).
"SWING LINE BANK" means Citibank.
"SWING LINE BORROWING" means a borrowing consisting of a Swing
Line Advance made by the Swing Line Bank pursuant to Section 2.01(b) or
the Lenders pursuant to Section 2.02(b).
"SWING LINE FACILITY" has the meaning specified in Section
2.01(b).
"TAX CERTIFICATE" has the meaning specified in Section 5.03(k)
"TAXES" has the meaning specified in Section 2.12(a).
"TERMINATION DATE" means the earlier of October 13, 2001 and
the date of termination in whole of the Working Capital Commitments and
the Letter of Credit Commitment pursuant to Section 2.05 or 6.01.
"TRADE LETTER OF CREDIT" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a
supplier of Inventory to the Borrowers or any of their respective
Subsidiaries to effect payment for such Inventory, the conditions to
drawing under which include the presentation to the Issuing Bank of
negotiable bills of lading, invoices and related documents sufficient,
in the judgment of the Issuing Bank, to create a valid and perfected
lien on or security interest in such Inventory, bills of lading,
invoices and related documents in favor of the Issuing Bank.
"TRANSACTION DOCUMENTS" means, collectively, the Loan
Documents and the Related Documents.
26
"TYPE" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"UNUSED WORKING CAPITAL COMMITMENT" means, with respect to any
Lender at any time, (a) such Lender's Working Capital Commitment at
such time MINUS (b) the sum of (i) the aggregate principal amount of
all Working Capital Advances, Swing Line Advances and Letter of Credit
Advances made by such Lender (in its capacity as a Lender) and
outstanding at such time PLUS (ii) such Lender's Pro Rata Share of (A)
the aggregate Available Amount of all Letters of Credit outstanding at
such time, (B) the aggregate principal amount of all Letter of Credit
Advances made by the Issuing Bank pursuant to Section 2.03(c) and
outstanding at such time other than any such Letter of Credit Advance
which, at or prior to such time, has been assigned in part to such
Lender pursuant to Section 2.03(c) and (C) the aggregate principal
amount of all Swing Line Advances made by the Swing Line Bank pursuant
to Section 2.01(b) and outstanding at such time other than any such
Swing Line Advance which, at or prior to such time, has been assigned
in part to such Lender pursuant to Section 2.02(b).
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section
3(1) of ERISA, that is maintained for employees of any Loan Party or in
respect of which any Loan Party could have liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"WORKING CAPITAL ADVANCE" has the meaning specified in Section
2.01(a).
"WORKING CAPITAL BORROWING" means a borrowing consisting of
simultaneous Working Capital Advances of the same Type made by the
Lenders.
"WORKING CAPITAL COMMITMENT" means, with respect to any Lender
at any time, (a) the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Working Capital Commitment", (b)
if such Lender has entered into one or more Assignment and Acceptances,
the amount set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 9.07(d) as such Lender's
"Working Capital Commitment", as such amount may be reduced at or prior
to such time pursuant to Section 2.05.
"WORKING CAPITAL FACILITY" means, at any time, the aggregate
amount of the Lenders' Working Capital Commitments at such time.
27
SECTION 1.02. COMPUTATION OF TIME PERIODS; OTHER DEFINITIONAL
PROVISIONS. In this Agreement and the other Loan Documents in the computation of
periods of time from a specified date to a later specified date, the word "FROM"
means "from and including" and the words "TO" and "UNTIL" each mean "to but
excluding". References in the Loan Documents to any agreement or contract "AS
AMENDED" shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(g) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. THE ADVANCES AND THE LETTERS OF CREDIT. (a) THE
WORKING CAPITAL ADVANCES. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each a "WORKING CAPITAL
ADVANCE") to the Borrowers jointly from time to time on any Business Day during
the period from the date of entry of the Interim Order until the Termination
Date in an amount for each such Advance not to exceed such Lender's Unused
Working Capital Commitment at such time. Each Working Capital Borrowing shall be
in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof and shall consist of Working Capital Advances made simultaneously
by the Lenders ratably according to their Working Capital Commitments. Within
the limits of each Lender's Unused Working Capital Commitment in effect from
time to time, the Borrowers may borrow under this Section 2.01(a), prepay
pursuant to Section 2.06(a) and reborrow under this Section 2.01(a).
(b) THE SWING LINE ADVANCES. The Borrowers may jointly request
the Swing Line Bank to make, and the Swing Line Bank may, if in its sole
discretion it elects to do so, make, on the terms and conditions hereinafter set
forth, Swing Line Advances to the Borrowers jointly from time to time on any
Business Day during the period from the date of entry of the Interim Order until
the Termination Date (i) in an aggregate amount not to exceed at any time
outstanding $25,000,000 (the "SWING LINE FACILITY") and (ii) in an amount for
each such Swing Line Borrowing not to exceed the aggregate of the Unused Working
Capital Commitments of the Lenders at such time. No Swing Line Advance shall be
used for the purpose of funding the payment of principal of any other Swing Line
Advance. Each Swing Line Borrowing shall be in an amount of $1,000,000 or an
integral multiple of $250,000 in excess thereof and shall be made as a Base Rate
Advance. Within the limits of the Swing Line Facility and within the limits
referred to in clause (ii) above, so long as the Swing Line Bank, in its sole
discretion, elects to make Swing Line Advances, the Borrowers may borrow under
this Section 2.01(b), repay pursuant to Section 2.04(b) or prepay pursuant to
Section 2.06(a) and reborrow under this Section 2.01(b).
28
(c) LETTERS OF CREDIT. The Issuing Bank, on the terms and
conditions hereinafter set forth, (i) agrees to issue, for amounts up to the
first $10,000,000 of the Letter of Credit Facility, and (ii) may, if in its sole
discretion elects to do so, issue, for any remaining amounts thereafter of the
Letter of Credit Facility, letters of credit (the "LETTERS OF CREDIT") for the
joint account of the Borrowers from time to time on any Business Day during the
period from the date of entry of the Interim Order until 60 days before the
Termination Date in an aggregate Available Amount (i) for all Letters of Credit
at any time not to exceed at any time the lesser of (x) the Letter of Credit
Facility at such time and (y) the Issuing Bank's Letter of Credit Commitment at
such time and (ii) for each such Letter of Credit not to exceed the Unused
Working Capital Commitments of the Lenders at such time. No Letter of Credit
shall have an expiration date (including all rights of the Borrowers or the
beneficiary to require renewal) later than the earlier of 60 days before the
Termination Date and (A) in the case of a Standby Letter of Credit, six months
after the date of issuance thereof, but may by its terms be renewable annually
upon notice (a "NOTICE OF RENEWAL") given to the Issuing Bank and the
Administrative Agent on or prior to any date for notice of renewal set forth in
such Letter of Credit but in any event at least three Business Days prior to the
date of the proposed renewal of such Standby Letter of Credit and upon
fulfillment of the applicable conditions set forth in Article III unless the
Issuing Bank has notified the Borrowers (with a copy to the Administrative
Agent) on or prior to the date for notice of termination set forth in such
Letter of Credit but in any event at least 30 Business Days prior to the date of
automatic renewal of its election not to renew such Standby Letter of Credit (a
"NOTICE OF TERMINATION") and (B) in the case of a Trade Letter of Credit, 60
days after the date of issuance thereof; PROVIDED that the terms of each Standby
Letter of Credit that is automatically renewable annually shall (x) require the
Issuing Bank that issued such Standby Letter of Credit to give the beneficiary
named in such Standby Letter of Credit notice of any Notice of Termination, (y)
permit such beneficiary, upon receipt of such notice, to draw under such Standby
Letter of Credit prior to the date such Standby Letter of Credit otherwise would
have been automatically renewed and (z) not permit the expiration date (after
giving effect to any renewal) of such Standby Letter of Credit in any event to
be extended to a date later than 60 days before the Termination Date. If either
a Notice of Renewal is not given by the Borrowers or a Notice of Termination is
given by the Issuing Bank pursuant to the immediately preceding sentence, such
Standby Letter of Credit shall expire on the date on which it otherwise would
have been automatically renewed; PROVIDED, HOWEVER, that even in the absence of
receipt of a Notice of Renewal the Issuing Bank may in its discretion, unless
instructed to the contrary by the Administrative Agent or the Borrowers, deem
that a Notice of Renewal had been timely delivered and in such case, a Notice of
Renewal shall be deemed to have been so delivered for all purposes under this
Agreement. Each Standby Letter of Credit shall contain a provision authorizing
the Issuing Bank to deliver to the beneficiary of such Letter of Credit, upon
the occurrence and during the continuance of an Event of Default, a notice (a
"DEFAULT TERMINATION NOTICE") terminating such Letter of Credit and giving such
beneficiary 15 days to draw such Letter of Credit. Within the limits of the
Letter of Credit Facility, and subject to the limits referred to above, the
Borrowers may request the issuance of Letters of Credit under this Section
2.01(c), repay any Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.03(c) and request the issuance of additional Letters of
Credit under this Section 2.01(c).
29
SECTION 2.02. MAKING THE ADVANCES. (a) Except as otherwise
provided in Section 2.02(b) or 2.03, each Borrowing shall be made on notice,
given not later than 1:00 P.M. (New York City time) on the third Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or not later than 12:00 noon (New York
City time) on the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the Borrowers jointly to the Administrative
Agent, which shall give to each Lender prompt notice thereof by telex or
telecopier. Each such notice of a Borrowing (a "NOTICE OF BORROWING") shall be
by telephone, confirmed immediately in writing, or telex or telecopier, in
substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of such Borrowing, (ii) Facility under which such Borrowing is to be made,
(iii) Type of Advances comprising such Borrowing, (iv) aggregate amount of such
Borrowing and (v) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Lender shall,
before 2:00 P.M. (New York City time) on the date of such Borrowing, make
available for the account of its Applicable Lending Office to the Administrative
Agent at the Administrative Agent's Account, in same day funds, such Lender's
ratable portion of such Borrowing in accordance with the respective Commitments
under the applicable Facility of such Lender and the other Lenders. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrowers by crediting the Borrowers' Account;
PROVIDED, HOWEVER, that, in the case of any Working Capital Borrowing, the
Administrative Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Swing Line Advances and Letter of Credit
Advances made by the Swing Line Bank or the Issuing Bank, as the case may be,
and by any other Lender and outstanding on the date of such Working Capital
Borrowing, plus interest accrued and unpaid thereon to and as of such date,
available to the Swing Line Bank or the Issuing Bank, as the case may be, and
such other Lenders for repayment of such Swing Line Advances and Letter of
Credit Advances.
(b) Each Swing Line Borrowing shall be made on notice, given
not later than 1:00 P.M. (New York City time) on the date of the proposed Swing
Line Borrowing, by the Borrowers jointly to the Swing Line Bank and the
Administrative Agent. Each such notice of a Swing Line Borrowing (a "NOTICE OF
SWING LINE BORROWING") shall be by telephone, confirmed immediately in writing,
or telex or telecopier, specifying therein the requested (i) date of such
Borrowing, (ii) amount of such Borrowing and (iii) maturity of such Borrowing
(which maturity shall be no later than the seventh day after the requested date
of such Borrowing). If, in its sole discretion, it elects to make the requested
Swing Line Advance, the Swing Line Bank will make the amount thereof available
to the Administrative Agent at the Administrative Agent's Account, in same day
funds. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrowers by
crediting the Borrowers' Account. Upon written demand by the Swing Line Bank,
with a copy of such demand to the Administrative Agent, each other Lender shall
purchase from the Swing Line Bank, and the Swing Line Bank shall sell and assign
to each such other Lender, such other Lender's Pro Rata Share of such
outstanding Swing Line Advance as of the date of such demand, by making
available for the account of its Applicable Lending Office to the Administrative
Agent for the account of the Swing Line Bank, by deposit to the Administrative
Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Swing Line Advance to be purchased by such
Lender. Each Borrower hereby agrees to each such sale and assignment. Each
Lender agrees to purchase its Pro Rata Share of an outstanding Swing Line
Advance on (i) the Business Day on which demand therefor is made by the Swing
Line Bank, PROVIDED that notice of such demand is given not later than 1:00 P.M.
(New York City time) on such Business Day or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. Upon
any such assignment by the Swing Line Bank to any other Lender of a portion of a
Swing Line Advance, the Swing Line Bank represents and warrants to such other
Lender that the Swing Line Bank is the legal and beneficial owner of such
interest being assigned by it, but makes no other representation or warranty and
assumes no responsibility with respect to such Swing Line Advance, the Loan
Documents or any Loan Party. If and to the extent that any Lender shall not have
so made the amount of such Swing Line Advance available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand
such amount together with interest thereon, for each day from the date of demand
by the Swing Line Bank until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such amount for the account of the Swing Line Bank on any Business Day,
such amount so paid in respect of principal shall constitute a Swing Line
Advance made by such Lender on such Business Day for purposes of this Agreement,
and the outstanding principal amount of the Swing Line Advance made by the Swing
Line Bank shall be reduced by such amount on such Business Day.
30
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) except as provided below, the Borrowers may not select
Eurodollar Rate Advances for the initial Borrowing hereunder and for the period
from the date hereof to September 15, 2000 (or such earlier date as shall be
specified in its sole discretion by the Administrative Agent in a written notice
to the Borrowers and the Lenders) or for any Borrowing if the aggregate amount
of such Borrowing is less than $10,000,000 or if the obligation of the Lenders
to make Eurodollar Rate Advances shall then be suspended pursuant to Section
2.09 or 2.10 and (ii) Eurodollar Rate Advances may not be outstanding as part of
more than five separate Borrowings; PROVIDED, HOWEVER, the Borrowers may select
Eurodollar Rate Advances for the period from the Initial Extension of Credit
through June 16, 2000 if the duration of the Interest Period for such Eurodollar
Rate Advance is one or two weeks and for the period from June 16, 2000 through
September 15, 2000 if the duration of the Interest Period for such Eurodollar
Rate Advance is one week, two weeks or one month.
(d) Each Notice of Borrowing and Notice of Swing Line
Borrowing shall be irrevocable and binding on the Borrowers. In the case of any
Borrowing that the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrowers shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
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(e) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing under a Facility under which
such Lender has a Commitment that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrowers severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrowers until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrowers, the interest rate applicable at such time under Section
2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Advance as part of such Borrowing for all purposes.
(f) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER
LETTERS OF CREDIT. (a) REQUEST FOR ISSUANCE. Each Letter of Credit shall be
issued upon notice, given not later than 1:00 P.M. (New York City time) on the
tenth Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrowers jointly to the Issuing Bank, which shall give to the
Administrative Agent and each Lender prompt notice thereof by telex or
telecopier. Each such notice of issuance of a Letter of Credit (a "NOTICE OF
ISSUANCE") shall be by telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (A) date of such issuance (which
shall be a Business Day), (B) Available 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 and (E) form of such Letter of Credit, and
shall be accompanied by such application and agreement for letter of credit as
the Issuing Bank may specify to the Borrowers for use in connection with such
requested Letter of Credit (a "LETTER OF CREDIT AGREEMENT"). If (x) the
requested form of such Letter of Credit is acceptable to the Issuing Bank in its
sole discretion and (y) it has not received notice of objection to such issuance
from the Required Lenders, the Issuing Bank will, upon fulfillment of the
applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrowers at its office referred to in Section 9.02 or as
otherwise agreed with the Borrowers in connection with such issuance. In the
event and to the extent that the provisions of any Letter of Credit Agreement
shall conflict with this Agreement, the provisions of this Agreement shall
govern.
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(b) LETTER OF CREDIT REPORTS. The Issuing Bank shall furnish
(A) to the Administrative Agent on the first Business Day of each week a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the previous week, drawings during such week under all Letters of Credit
and the aggregate Available Amount of all Letters of Credit outstanding during
such week, (B) to each Lender on the first Business Day of each month a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the preceding month and drawings during such month under all Letters of
Credit and (C) to the Administrative Agent and each Lender on the first Business
Day of each calendar quarter a written report setting forth the average daily
aggregate Available Amount during the preceding calendar quarter of all Letters
of Credit.
(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 a Letter of Credit Advance,
which shall be a Base Rate Advance, in the amount of such draft. Upon written
demand by the Issuing Bank, with a copy of such demand to the Administrative
Agent, each Lender shall purchase from the Issuing Bank, and the Issuing Bank
shall sell and assign to each such Lender, such Lender's Pro Rata Share of such
outstanding Letter of Credit Advance as of the date of such purchase, by making
available for the account of its Applicable Lending Office to the Administrative
Agent for the account of the Issuing Bank, by deposit to the Administrative
Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Letter of Credit Advance to be purchased by
such Lender. Promptly after receipt thereof, the Administrative Agent shall
transfer such funds to the Issuing Bank. Each Borrower hereby agrees to each
such sale and assignment. Each Lender agrees to purchase its Pro Rata Share of
an outstanding Letter of Credit Advance on (i) the Business Day on which demand
therefor is made by the Issuing Bank, PROVIDED that notice of such demand is
given not later than 1:00 P.M. (New York City time) on such Business Day, or
(ii) the first Business Day next succeeding such demand if notice of such demand
is given after such time. Upon any such assignment by the Issuing Bank to any
Lender of a portion of a Letter of Credit Advance, the Issuing Bank represents
and warrants to such other Lender that the Issuing Bank is the legal and
beneficial owner of such interest being assigned by it, free and clear of any
liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any Loan Party. If and to the extent that any Lender shall not have so made
the amount of such Letter of Credit Advance available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand
such amount together with interest thereon, for each day from the date of demand
by the Issuing Bank until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate for its account or the account of the Issuing
Bank, as applicable. If such Lender shall pay to the Administrative Agent such
amount for the account of the Issuing Bank on any Business Day, such amount so
paid in respect of principal shall constitute a Letter of Credit Advance made by
such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Letter of Credit Advance made by the Issuing
Bank shall be reduced by such amount on such Business Day.
33
(d) FAILURE TO MAKE LETTER OF CREDIT ADVANCES. The failure of
any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. REPAYMENT OF ADVANCES. (a) WORKING CAPITAL
ADVANCES. The Borrowers shall repay to the Administrative Agent for the ratable
account of the Lenders on the Termination Date the aggregate principal amount of
the Working Capital Advances then outstanding.
(b) SWING LINE ADVANCES. The Borrowers shall repay to the
Administrative Agent for the account of the Swing Line Bank and each other
Lender that has made a Swing Line Advance the outstanding principal amount of
each Swing Line Advance by each of them on the earlier of the maturity date
specified in the applicable Notice of Swing Line Borrowing (which maturity shall
be no later than the seventh day after the requested date of such Borrowing) and
the Termination Date.
(c) LETTER OF CREDIT ADVANCES. (i) The Borrowers shall repay
to the Administrative Agent for the account of the Issuing Bank and each other
Lender that has made a Letter of Credit Advance on the earlier of demand and the
Termination Date the outstanding principal amount of each Letter of Credit
Advance made by each of them.
(ii) The Obligations of the Borrowers under this Agreement,
any Letter of Credit Agreement and any other agreement or instrument relating to
any Letter of Credit 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 (it being understood
that any such payment by the Borrowers is without prejudice to, and does not
constitute a waiver of, any rights the Borrowers might have or might acquire as
a result of the payment by the Issuing Bank of any draft or the reimbursement by
the Borrowers thereof):
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit, the
Interim Order or the Final Order or any other agreement or instrument
relating thereto (all of the foregoing being, collectively, the "L/C
RELATED DOCUMENTS");
(B) 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 Borrowers in
respect of any L/C Related Document or any other amendment or waiver of
or any consent to departure from all or any of the L/C Related
Documents;
34
(C) the existence of any claim, set-off, defense or other
right that the Borrowers 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 or any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) 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;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from the Guaranties or any other guarantee, for
all or any of the Obligations of the Borrowers in respect of the L/C
Related Documents; or
(G) 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 Borrowers, any Guarantor or any other
guarantor.
SECTION 2.05. TERMINATION OR REDUCTION OF THE COMMITMENTS. (a)
OPTIONAL. The Borrowers may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Letter of Credit Facility and the Unused Working Capital Commitments;
PROVIDED, HOWEVER, that each partial reduction of a Facility (i) shall be in an
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and (ii) shall be made ratably among the Lenders in accordance with
their Commitments with respect to such Facility.
(b) MANDATORY. (i) The Letter of Credit Facility shall be
permanently reduced from time to time on the date of each reduction in the
Working Capital Facility by the amount, if any, by which the amount of the
Letter of Credit Facility exceeds the Working Capital Facility after giving
effect to such reduction of the Working Capital Facility.
(ii) The Swing Line Facility shall be permanently reduced from
time to time on the date of each reduction in the Working Capital Facility by
the amount, if any, by which the amount of the Swing Line Facility exceeds the
Working Capital Facility after giving effect to such reduction of the Working
Capital Facility.
(iii) The Working Capital Facility shall be reduced to an
amount equal to the lesser of (i) $225,000,000 and (ii) the maximum amount
permitted to be made available to the Borrowers under the Interim Order until
entry of the Final Order whereupon the Working Capital Facility shall be
increased to the full amount thereof approved therein (such reduction and
increase to be made ratably among the Lenders in accordance with their
Commitments with respect to such Facility).
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SECTION 2.06. PREPAYMENTS. (a) OPTIONAL. The Borrowers may,
upon at least one Business Day's notice in the case of Base Rate Advances and
three Business Days' notice in the case of Eurodollar Rate Advances, in each
case to the Administrative Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrowers
shall, prepay the outstanding aggregate principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in part, together with
accrued interest to the date of such prepayment on the aggregate principal
amount prepaid; PROVIDED, HOWEVER, that (x) each partial prepayment shall be in
an aggregate principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and (y) if any prepayment of a Eurodollar Rate
Advance is made on a date other than the last day of an Interest Period for such
Advance, the Borrowers shall also pay any amounts owing pursuant to Section
9.04(c).
(b) MANDATORY. (i) The Borrowers shall, within one (1)
Business Day after the date of receipt of the Net Cash Proceeds by any Loan
Party or any of its Subsidiaries from (A) the sale, lease, transfer or other
disposition of any assets of any Loan Party or any of its Subsidiaries (other
than any sale, lease, transfer or other disposition of assets permitted under
clause (i) of Section 5.02(e)), (B) the incurrence or issuance by any Loan Party
or any of its Subsidiaries of any Debt (other than Debt incurred or issued
pursuant to Section 5.02(b)) and (C) the sale or issuance by any Loan Party or
any of its Subsidiaries of any capital stock or other ownership or profit
interest (including, without limitation, any capital contribution), any
securities convertible into or exchangeable for capital stock or other ownership
or profit interest or any warrants, rights or options to acquire capital stock
or other ownership or profit interest, prepay an aggregate principal amount of
the Advances comprising part of the same Borrowings equal to the amount of such
Net Cash Proceeds. Each such prepayment shall be applied as set forth in clause
(iv) below.
(ii) The Borrowers shall, on each Business Day, prepay an
aggregate principal amount of the Working Capital Advances comprising part of
the same Borrowings, the Letter of Credit Advances and the Swing Line Advances
and deposit an amount in the L/C Cash Collateral Account equal to the amount by
which (A) the sum of the aggregate principal amount of (x) the Working Capital
Advances, (y) the Letter of Credit Advances and (z) the Swing Line Advances then
outstanding plus the aggregate Available Amount of all Letters of Credit then
outstanding exceeds (B) the lesser of (x) the Working Capital Facility and (y)
the Loan Value of Eligible Collateral on such Business Day MINUS $16,000,000.
(iii) The Borrowers shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
36
(iv) Prepayments of the Working Capital Facility made pursuant
to clause (i) and (ii) above shall be FIRST applied to prepay Letter of Credit
Advances then outstanding until such Advances are paid in full, SECOND applied
to prepay Swing Line Advances then outstanding until such Advances are paid in
full and THIRD applied to prepay Working Capital Advances then outstanding
comprising part of the same Borrowings until such Advances are paid in full.
(vi) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
SECTION 2.07. INTEREST. (a) SCHEDULED INTEREST. The Borrowers
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) BASE RATE ADVANCES. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(A) the Base Rate in effect from time to time PLUS (B) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
last day of each March, June, September and December during such
periods and on the date such Base Rate Advance shall be Converted or
paid in full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A)
the Eurodollar Rate for such Interest Period for such Advance PLUS (B)
the Applicable Margin in effect from time to time, payable in arrears
on the last day of such Interest Period and, if such Interest Period
has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of
such Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.
(b) DEFAULT INTEREST. Upon the occurrence and during the
continuance of an Event of Default, the Borrowers shall pay interest on (i) the
unpaid principal amount of each Advance owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above
and (ii) to the fullest extent permitted by law, the amount of any interest, fee
or other amount payable under the Loan Documents that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid, in the case of interest, on the Type of Advance on which
such interest has accrued pursuant to clause (a)(i) or (a)(ii) above and, in all
other cases, on Base Rate Advances pursuant to clause (a)(i) above.
37
(c) NOTICE OF INTEREST RATE. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant
to Section 2.09 or a notice of selection of an Interest Period pursuant to the
terms of the definition of "Interest Period", the Administrative Agent shall
give notice to the Borrowers and each Lender of the applicable Interest Period
and the applicable interest rate determined by the Administrative Agent for
purposes of clause (a)(i) or (a)(ii) above.
SECTION 2.08. FEES. (a) COMMITMENT FEE. The Borrowers jointly
and severally agree to pay to the Administrative Agent for the account of the
Lenders a commitment fee, from the date hereof in the case of each Initial
Lender and from the effective date specified in the Assignment and Acceptance
pursuant to which it became a Lender in the case of each other Lender until the
Termination Date, payable in arrears on the date of the initial Borrowing
hereunder, thereafter quarterly on the last day of each March, June, September
and December, commencing June 30, 2000, and on the Termination Date, at the rate
equal to the Applicable Percentage from time to time on the average daily Unused
Working Capital Commitment of such Lender PLUS its Pro Rata Share of the average
daily outstanding Swing Line Advances during such quarter other than any such
Swing Line Advances which have been assigned in part to such Lender pursuant to
Section 2.03(c); PROVIDED, HOWEVER, that no commitment fee shall accrue on any
of the Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.
(b) LETTER OF CREDIT FEES, ETC. (i) The Borrowers jointly and
severally agree to pay to the Administrative Agent for the account of each
Lender a commission, payable in arrears quarterly on the last day of each March,
June, September and December, commencing June 30, 2000, and on the Termination
Date, on such Lender's Pro Rata Share of the average daily aggregate Available
Amount during such quarter of Letters of Credit outstanding from time to time at
the rate equal to the Applicable Letter of Credit Fee from time to time;
provided, however, upon the occurrence and during the continuance of any
Default, the Administrative Agent may, and upon the request of the Required
Lenders shall, require that such commission shall increase by a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid
on such commission pursuant to this clause (i), payable on demand.
(ii) The Borrowers shall pay to the Issuing Bank, for its own
account a fronting fee, payable in arrears quarterly on the last day of each
March, June, September and December, commencing June 30, 2000, and on the
Termination Date, on the average daily aggregate Available Amount during such
quarter of Letters of Credit outstanding from time to time at the rate of 0.375%
per annum.
(c) AGENTS' FEES. The Borrowers jointly and severally agree
pay to each Agent for its own account such fees as may from time to time be
agreed in writing between the Parent Guarantor and such Agent.
SECTION 2.09. CONVERSION OF ADVANCES. (a) OPTIONAL. The
Borrowers may on any Business Day, upon notice given to the Administrative Agent
not later than 1:00 P.M. (New York City time) on the third Business Day prior to
the date of the proposed Conversion and subject to the provisions of Sections
2.07 and 2.10, Convert all or any portion of the Advances of one Type comprising
the same Borrowing into Advances of the other Type; PROVIDED, HOWEVER, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(c), no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(c) and each Conversion of Advances comprising part
of the same Borrowing under any Facility shall be made ratably among the Lenders
in accordance with their Commitments under such Facility. Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrowers.
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(b) MANDATORY. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $10,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrowers shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrowers and the Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
(iii) Prior to the entry of the Final Order or upon the
occurrence and during the continuance of any Event of Default, (x) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (y) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
SECTION 2.10. INCREASED COSTS, ETC. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining or participating in Letters of Credit or of
agreeing to make or of making or maintaining Letter of Credit Advances
(excluding, for purposes of this Section 2.10, any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern)
and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its Applicable Lending
Office or any political subdivision thereof), then the Borrowers jointly and
severally agree from time to time, upon demand by such Lender Party (with a copy
of such demand to the Administrative Agent), to pay to the Administrative Agent
for the account of such Lender Party additional amounts sufficient to compensate
such Lender Party for such increased cost. A certificate as to the amount of
such increased cost, submitted to the Borrowers by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.
39
(b) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party or
any corporation controlling such Lender Party as a result of or based upon the
existence of such Lender Party's commitment to lend or to issue or participate
in Letters of Credit hereunder and other commitments of such type or the
issuance or maintenance of or participation in the Letters of Credit (or similar
contingent obligations), then, upon demand by such Lender Party (with a copy of
such demand to the Administrative Agent), the Borrowers jointly and severally
agree to pay to the Administrative Agent for the account of such Lender Party,
from time to time as specified by such Lender Party, additional amounts
sufficient to compensate such Lender Party in the light of such circumstances,
to the extent that such Lender Party reasonably determines such increase in
capital to be allocable to the existence of such Lender Party's commitment to
lend or to issue or participate in Letters of Credit hereunder or to the
issuance or maintenance of or participation in any Letters of Credit. A
certificate as to such amounts submitted to the Borrowers by such Lender Party
shall be conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so notify the
Borrowers and the Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrowers that such Lenders have
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrowers
through the Administrative Agent, (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor or,
if required by applicable law, immediately, Convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrowers that such Lender has determined that the circumstances
causing such suspension no longer exist.
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SECTION 2.11. PAYMENTS AND COMPUTATIONS. (a) The Borrowers
shall make each payment hereunder and under the Notes, irrespective of any right
of counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 1:00 P.M. (New York City time) on the day when due in U.S. dollars to
the Administrative Agent at the Administrative Agent's Account in same day
funds, with payments being received by the Administrative Agent after such time
being deemed to have been received on the next succeeding Business Day. The
Administrative Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by the Borrowers is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender Party, to such Lender Parties for the account of
their respective Applicable Lending Offices ratably in accordance with the
amounts of such respective Obligations then payable to such Lender Parties and
(ii) if such payment by the Borrowers is in respect of any Obligation then
payable hereunder to one Lender Party, to such Lender Party for the account of
its Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 9.07(d), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) All computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; PROVIDED, HOWEVER, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Administrative Agent shall have received notice
from the Borrowers prior to the date on which any payment is due to any Lender
Party hereunder that the Borrowers will not make such payment in full, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each such Lender
Party on such due date an amount equal to the amount then due such Lender Party.
If and to the extent the Borrowers shall not have so made such payment in full
to the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
41
SECTION 2.12. TAXES. (a) Any and all payments by the Borrowers
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, EXCLUDING, in the case of each Lender Party and each Agent,
taxes that are imposed on its overall net income by the United States and taxes
that are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the state or foreign jurisdiction under the laws of which such
Lender Party or such Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Lender Party, taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction of such Lender Party's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being hereinafter referred to as "TAXES").
If the Borrowers shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender Party or any Agent,
(i) the sum payable by the Borrowers shall be increased as may be necessary so
that after the Borrowers and the Administrative Agent have made all required
deductions (including deductions applicable to additional sums payable under
this Section 2.12) such Lender Party or such Agent, as the case may be, receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrowers shall make all such deductions and (iii) the Borrowers
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made by the Borrowers hereunder or under the Notes or
from the execution, delivery or registration of, performance under, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as "OTHER
TAXES").
(c) The Borrowers jointly and severally agree to indemnify
each Lender Party and each Agent for and hold them harmless against the full
amount of Taxes and Other Taxes, and for the full amount of taxes of any kind
imposed by any jurisdiction on amounts payable under this Section 2.12, imposed
on or paid by such Lender Party or such Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 30
days from the date such Lender Party or such Agent (as the case may be) makes
written demand therefor.
42
(d) Within 30 days after the date of any payment of Taxes, the
Borrowers shall furnish to the Administrative Agent, at its address referred to
in Section 9.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes by or on behalf
of the Borrowers through an account or branch outside the United States or by or
on behalf of the Borrowers by a payor that is not a United States person, if the
Borrowers determine that no Taxes are payable in respect thereof, the Borrowers
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of
subsections (d) and (e) of this Section 2.12, the terms "UNITED STATES" and
"UNITED STATES PERSON" shall have the meanings specified in Section 7701 of the
Internal Revenue Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender or
Initial Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender Party in the case of each other
Lender Party, and from time to time thereafter as requested in writing by the
Borrowers (but only so long thereafter as such Lender Party remains lawfully
able to do so), provide each of the Administrative Agent and the Borrowers with
two original Internal Revenue Service forms 1001 or 4224, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender Party is exempt from or entitled to a reduced rate of United
States withholding tax on payments pursuant to this Agreement or the Notes. If
the forms provided by a Lender Party at the time such Lender Party first becomes
a party to this Agreement indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender Party provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; PROVIDED, HOWEVER, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender Party becomes a party to this Agreement,
the Lender Party assignor was entitled to payments under subsection (a) of this
Section 2.12 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender Party reasonably considers to be confidential, the Lender
Party shall give notice thereof to the Borrowers and shall not be obligated to
include in such form or document such confidential information.
(f) For any period with respect to which a Lender Party has
failed to provide the Borrowers with the appropriate form described in
subsection (e) above (OTHER THAN if such failure is due to a change in law
occurring after the date on which a form originally was required to be provided
or if such form otherwise is not required under subsection (e) above), such
Lender Party shall not be entitled to indemnification under subsection (a) or
(c) of this Section 2.12 with respect to Taxes imposed by the United States by
reason of such failure; PROVIDED, HOWEVER, that should a Lender Party become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrowers shall take such steps as such Lender Party shall reasonably
request to assist such Lender Party to recover such Taxes.
43
SECTION 2.13. SHARING OF PAYMENTS, ETC. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise, other than as a result of an
assignment pursuant to Section 9.07) (a) on account of Obligations due and
payable to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such interests or participating interests in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; PROVIDED, HOWEVER, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered. Each Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender Party were the direct creditor of the Borrowers in the amount of
such participation.
SECTION 2.14. USE OF PROCEEDS. The proceeds of the Advances
and issuances of Letters of Credit shall be available (and each Borrowers agrees
that it shall use such proceeds and Letters of Credit) solely to (i) repay the
Pre-Petition Obligations, (ii) provide working capital for the Borrower and its
Subsidiaries (other than Non-Filing Subsidiaries except as expressly permitted
by Section 5.02(y)), (iii) to make other expenditures as may be authorized and
approved by an order to the Bankruptcy Court as reasonable, necessary costs and
expenses of preserving or disposing of the properties and interests in property
of the Borrower and its Subsidiaries (other than Non-Filing Subsidiaries)
including, without limitation, the fees and expenses of Borrowers' Professionals
but not in excess of the Carve-Out; PROVIDED, FURTHER that no amounts shall be
paid pursuant to this Section 2.14(iii) for fees and disbursements incurred by
the Borrowers in connection with any proceeding (other than an investigation)
commenced, including, without limitation, any motion or other pleading filed to
contest (a) the attachment, perfection or priority of the Liens created by the
Pre-Petition Loan Documents, (b) the validity, binding effect or enforceability
of the Pre-Petition Loan Documents or the Loan Documents other than the
reasonable fees and expenses of the Borrowers' Professionals related to the
enforcement of the Borrowers' rights under this Agreement or the Loan Documents,
or (c) any other rights or interest of the Pre-Petition Agent or the
Pre-Petition Lenders or of the Agent of the Lender Parties under the Loan
Documents.
44
SECTION 2.15. DEFAULTING LENDERS. (a) In the event that, at
any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrowers and (iii) the
Borrowers shall be required to make any payment hereunder or under any other
Loan Document to or for the account of such Defaulting Lender, then the
Borrowers may, so long as no Default shall occur or be continuing at such time
and to the fullest extent permitted by applicable law, set off and otherwise
apply the Obligation of the Borrowers to make such payment to or for the account
of such Defaulting Lender against the obligation of such Defaulting Lender to
make such Defaulted Advance. In the event that, on any date, the Borrowers shall
so set off and otherwise apply its obligation to make any such payment against
the obligation of such Defaulting Lender to make any such Defaulted Advance on
or prior to such date, the amount so set off and otherwise applied by the
Borrowers shall constitute for all purposes of this Agreement and the other Loan
Documents an Advance by such Defaulting Lender made on the date of such setoff
under the Facility pursuant to which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01. Such Advance shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the other Advances
comprising such Borrowing shall be Eurodollar Rate Advances on the date such
Advance is deemed to be made pursuant to this subsection (a). The Borrowers
shall notify the Administrative Agent at any time the Borrowers exercises its
right of set-off pursuant to this subsection (a) and shall set forth in such
notice (A) the name of the Defaulting Lender and the Defaulted Advance required
to be made by such Defaulting Lender and (B) the amount set off and otherwise
applied in respect of such Defaulted Advance pursuant to this subsection (a).
Any portion of such payment otherwise required to be made by the Borrowers to or
for the account of such Defaulting Lender which is paid by the Borrowers, after
giving effect to the amount set off and otherwise applied by the Borrowers
pursuant to this subsection (a), shall be applied by the Administrative Agent as
specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Amount to any Agent or any of the other Lender Parties and (iii) the Borrowers
shall make any payment hereunder or under any other Loan Document to the
Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Agents or
such other Lender Parties and to the fullest extent permitted by applicable law,
apply at such time the amount so paid by the Borrowers to or for the account of
such Defaulting Lender to the payment of each such Defaulted Amount to the
extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Administrative Agent
shall constitute for all purposes of this Agreement and the other Loan Documents
payment, to such extent, of such Defaulted Amount on such date. Any such amount
so applied by the Administrative Agent shall be retained by the Administrative
Agent or distributed by the Administrative Agent to such other Agents or such
other Lender Parties, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent, such other
Agents and such other Lender Parties and, if the amount of such payment made by
the Borrowers shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Administrative Agent, such other Agents and such other
Lender Parties, in the following order of priority:
45
(i) FIRST, to the Agents for any Defaulted Amounts then owing
to them, in their capacities as such, ratably in accordance with such
respective Defaulted Amounts then owing to the Agents;
(ii) SECOND, to the Issuing Bank and the Swing Line Bank for
any Defaulted Amounts then owing to them, in their capacities as such,
ratably in accordance with such respective Defaulted Amounts then owing
to the Issuing Bank and the Swing Line Bank; and
(iii) THIRD, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing to such other Lender
Parties.
Any portion of such amount paid by the Borrowers for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrowers, any Agent or
any other Lender Party shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrowers or such Agent or such other Lender Party
shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds held
by the Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an account with Citibank, in the name
and under the control of the Administrative Agent, but subject to the provisions
of this subsection (c). The terms applicable to such account, including the rate
of interest payable with respect to the credit balance of such account from time
to time, shall be Citibank's standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from time to time
shall be held by the Administrative Agent in escrow under, and applied by the
Administrative Agent from time to time in accordance with the provisions of,
this subsection (c). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to time
to the extent necessary to make any Advances required to be made by such
Defaulting Lender and to pay any amount payable by such Defaulting Lender
hereunder and under the other Loan Documents to the Administrative Agent or any
other Lender Party, as and when such Advances or amounts are required to be made
or paid and, if the amount so held in escrow shall at any time be insufficient
to make and pay all such Advances and amounts required to be made or paid at
such time, in the following order of priority:
46
(i) FIRST, to the Agents for any amounts then due and payable
by such Defaulting Lender to them hereunder, in their capacities as
such, ratably in accordance with such amounts then due and payable to
the Agents;
(ii) SECOND, to the Issuing Bank and the Swing Line Bank for
any amounts then due and payable to them hereunder, in their capacities
as such, by such Defaulting Lender, ratably in accordance with such
amounts then due and payable to the Issuing Bank and the Swing Line
Bank;
(iii) THIRD, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iv) FOURTH, to the Borrowers for any Advance then required to
be made by such Defaulting Lender to the Borrowers pursuant to a
Commitment of such Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to other rights and remedies that the
Borrowers may have against such Defaulting Lender with respect to any Defaulted
Advance and that any Agent or any Lender Party may have against such Defaulting
Lender with respect to any Defaulted Amount.
47
SECTION 2.16. EVIDENCE OF DEBT. (a) Each Lender Party shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrowers to such Lender Party resulting from each
Advance owing to such Lender Party from time to time, including the amounts of
principal and interest payable and paid to such Lender Party from time to time
hereunder. Each Borrower agrees that upon notice by any Lender Party to the
Borrowers (with a copy of such notice to the Administrative Agent) to the effect
that a promissory note or other evidence of indebtedness is required or
appropriate in order for such Lender Party to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by, such
Lender Party, the Borrowers shall promptly execute and deliver to such Lender
Party, with a copy to the Administrative Agent, a Note in substantially the form
of Exhibit A hereto, payable to the order of such Lender Party in a principal
amount equal to the Working Capital Commitment of such Lender Party. All
references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued hereunder.
(b) The Register maintained by the Administrative Agent
pursuant to Section 9.07(d) shall include a control account, and a subsidiary
account for each Lender Party, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, the Type of
Advances comprising such Borrowing and, if appropriate, the Interest Period
applicable thereto, (ii) the terms of each Assignment and Acceptance delivered
to and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrowers to each Lender Party
hereunder, and (iv) the amount of any sum received by the Administrative Agent
from the Borrowers hereunder and each Lender Party's share thereof.
(c) Entries made in good faith by the Administrative Agent in
the Register pursuant to subsection (b) above, and by each Lender Party in its
account or accounts pursuant to subsection (a) above, shall be PRIMA FACIE
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrowers to, in the case of the Register, each Lender
Party and, in the case of such account or accounts, such Lender Party, under
this Agreement, absent manifest error; PROVIDED, HOWEVER, that the failure of
the Administrative Agent or such Lender Party to make an entry, or any finding
that an entry is incorrect, in the Register or such account or accounts shall
not limit or otherwise affect the obligations of the Borrowers under this
Agreement.
ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF
CREDIT. The obligation of each Lender to make an Advance or of the Issuing Bank
to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:
48
(a) The Administrative Agent shall have received on or before
the day of the Initial Extension of Credit the following, each dated
such day (unless otherwise specified), in form and substance
satisfactory to the Administrative Agent (unless otherwise specified)
and (except for the Notes) in sufficient copies for each Lender Party:
(i) A certified copy of an order of the Bankruptcy
Court in substantially the form of Exhibit F-1 (the "INTERIM
ORDER") and the Interim Order shall be in full force and
effect and shall not have been vacated, reversed, modified or
amended and there shall be no stay of the performance of any
obligation of either Borrower or any of the Loan Parties. The
parties hereto acknowledge that the foregoing shall not
preclude the entry of any order of the Bankruptcy Court
approving or authorizing an amendment or modification of this
Agreement or any other Loan Document or the Interim Order
permitted by Section 9.01 which amendment of modification
shall be acceptable to the Lenders whose consent is required
to approve such amendment or modification under Section 9.01.
(ii) The Notes payable to the order of the
Lenders to the extent requested in accordance with Section
2.16.
(iii) A security agreement in substantially
the form of Exhibit D hereto (together with each other
security agreement and security agreement supplement delivered
pursuant to Section 5.01(j), in each case as amended, the
"SECURITY AGREEMENT"), duly executed by each Loan Party,
together with:
(A) certificates representing
the Pledged Shares referred to therein accompanied by
undated stock powers executed in blank and instruments
evidencing the Pledged Debt indorsed in blank,
(B) acknowledgment copies of
proper financing statements, duly filed on or before the
day of the Initial Extension of Credit under the Uniform
Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority liens
and security interests created under the Security
Agreement, covering the Collateral described in the
Security Agreement,
(C) completed requests for
information, dated on or before the date of the Initial
Extension of Credit, listing the financing statements
referred to in clause (B) above and all other effective
financing statements filed in the jurisdictions referred
to in clause (B) above that name any Loan Party as
debtor, together with copies of such other financing
statements,
49
(D) evidence of the completion
of all other recordings and filings of or with respect
to the Security Agreement that the Administrative Agent
may deem necessary or desirable in order to perfect and
protect the Liens created thereby,
(E) evidence of the insurance
required by the terms of the Security Agreement,
(F) copies of the Assigned
Agreements referred to in the Security Agreement,
together with a consent to such assignment, in
substantially the form of Exhibit B to the Security
Agreement, duly executed by each party to such Assigned
Agreements other than the Loan Parties,
(G) the Pledged Account Letters
referred to in the Security Agreement, duly executed by
each Pledged Account Bank referred to in the Security
Agreement, and
(H) evidence that all other
action that the Administrative Agent may deem necessary
or desirable in order to perfect and protect the first
priority liens and security interests created under the
Security Agreement has been taken (including, without
limitation, receipt of duly executed payoff letters,
UCC-3 termination statements and landlords' and bailees'
waiver and consent agreements).
(iv) A guaranty in substantially the form of
Exhibit E hereto (together with each other guaranty and
guaranty supplement delivered pursuant to Section 5.01(j), in
each case as amended, the "SUBSIDIARY GUARANTY"), duly
executed by each Subsidiary Guarantor.
(v) Certified copies of the resolutions of
the Board of Directors of each Loan Party approving the
transactions contemplated by the Transaction Documents and
each Transaction Document to which it is or is to be a party,
and of all documents evidencing other necessary corporate or
other action and governmental and other third party approvals
and consents, if any, with respect to the transactions
contemplated by the Transaction Documents and each Transaction
Document to which it is or is to be a party.
(vi) A copy of a certificate of the
Secretary of State of the jurisdiction of organization of each
Loan Party (other than any Loan Party that is an Immaterial
Subsidiary or Foreign Subsidiary), dated reasonably near the
date of the Initial Extension of Credit, certifying (A) as to
a true and correct copy of the charter of such Loan Party and
each amendment thereto on file in his office and (B) that (1)
such amendments are the only amendments to such Loan Party's
charter on file in his office, (2) such Loan Party has paid
all franchise taxes to the date of such certificate and (C)
such Loan Party is duly organized and in good standing or
presently subsisting under the laws of the State of the
jurisdiction of its organization.
50
(vii) A copy of a certificate of the
Secretary of State of each of the States listed on Schedule
3.01(a)(vii), dated reasonably near the date of the Initial
Extension of Credit, with respect to each Loan Party as listed
on Schedule 3.01(a)(vii) (other than any Loan Party that is an
Immaterial Subsidiary or Foreign Subsidiary), stating that
such Loan Party is duly qualified and in good standing as a
foreign corporation and has filed all annual reports required
to be filed to the date of such certificate.
(viii) A certificate of each Loan Party,
signed on behalf of such Loan Party by its President or a Vice
President and its Secretary or any Assistant Secretary, dated
the date of the Initial Extension of Credit (the statements
made in which certificate shall be true on and as of the date
of the Initial Extension of Credit), certifying as to (A) the
absence of any amendments to the charter of such Loan Party
since the date of the Secretary of State's certificate
referred to in Section 3.01(a)(vi), (B) a true and correct
copy of the bylaws of such Loan Party as in effect on the date
on which the resolutions referred to in Section 3.01(a)(v)
were adopted and on the date of the Initial Extension of
Credit, (C) the due incorporation and good standing or valid
existence of such Loan Party under the laws of the
jurisdiction of its organization, and the absence of any
proceeding for the dissolution or liquidation of such Loan
Party (D) the truth of the representations and warranties
contained in the Loan Documents as though made on and as of
the date of the Initial Extension of Credit and (E) the
absence of any event occurring and continuing, or resulting
from the Initial Extension of Credit, that constitutes a
Default.
(ix) A certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying the names
and true signatures of the officers of such Loan Party
authorized to sign each Transaction Document to which it is or
is to be a party and the other documents to be delivered
hereunder and thereunder.
(x) Certified copies of each of the Related
Documents (including the documents set forth on Schedule
3.01(a)(x) (the "Eleris Documents"), duly executed by the
parties thereto and in form and substance satisfactory to the
Lender Parties, together with all agreements, instruments and
other documents delivered in connection therewith as the
Administrative Agent shall request.
(xi) Such financial, business and other
information regarding each Loan Party and its Subsidiaries as
the Lender Parties shall have requested, including, without
limitation, information as to possible contingent liabilities,
tax matters, environmental matters, obligations under Plans,
Multiemployer Plans and Welfare Plans, collective bargaining
agreements and other arrangements with employees, audited
annual financial statements dated November 1, 1999, interim
financial statements dated the end of the most recent fiscal
quarter for which financial statements are available (or, in
the event the Lender Parties' due diligence review reveals
material changes since such financial statements, as of a
later date within 45 days of the day of the Initial Extension
of Credit), pro forma financial statements as to the Parent
Guarantor and forecasts prepared by management of the Parent
Guarantor, in form and substance satisfactory to the Lender
Parties, of balance sheets, income statements and cash flow
statements on a monthly basis following the day of the Initial
Extension of Credit through the end of Fiscal Year 2000 and on
an annual basis for each year thereafter until the Termination
Date.
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(xii) A letter, in form and substance
satisfactory to the Administrative Agent, from the Parent
Guarantor to PricewaterhouseCoopers LLC, its independent
certified public accountants, advising such accountants that
the Agents and the Lender Parties have been authorized to
exercise all rights of the Parent Guarantor to require such
accountants to disclose any and all financial statements and
any other information of any kind that they may have with
respect to the Parent Guarantor and its Subsidiaries and
directing such accountants to comply with any reasonable
request of any Agent or any Lender Party for such information.
(xiii) Evidence of insurance naming the
Collateral Agent as additional insured and loss payee with
such responsible and reputable insurance companies or
associations, and in such amounts and covering such risks, as
is satisfactory to the Lender Parties, including, without
limitation, business interruption insurance.
(xiv) Certified copies of each employment
agreement and other compensation arrangement with each
executive officer of any Loan Party or any of its Subsidiaries
(the "EMPLOYMENT AGREEMENTS").
(xv) A Notice of Borrowing or Notice of
Issuance, as applicable, and a Borrowing Base Certificate
relating to the Initial Extension of Credit which shall
reflect an Excess Availability in an amount not less than
$________.
(xvi) Deeds of trust, trust deeds and
mortgages in substantially the form of Exhibit E hereto and
covering the properties listed on Schedule 4.01(u) (other than
the real property located at 0000 Xxxx Xxxxxxxx, Xxxxx,
Xxxxxxx) (together with each other mortgage delivered pursuant
to Section 5.01(j), in each case as amended, amended and
restated, supplemented or otherwise modified from time to time
in accordance with their terms, the "MORTGAGES"), duly
executed by the appropriate Loan Party, together with evidence
that all action that the Administrative Agent may deem
necessary or desirable in order to create valid first and
subsisting Liens on the property described in the Mortgages
has been taken.
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(xvii) An Intercreditor Agreement, in form
and substance satisfactory to Lender Parties (as amended, to
the extent permitted under the Loan Documents, or replaced in
accordance with Section 5.02(b)(iii)(G) (the "INTERCREDITOR
AGREEMENT"), among the Collateral Agent and IBM Credit
Corporation, duly executed by IBM Credit Corporation).
(xviii) A favorable opinion of Xxxxx &
Xxxxxx, counsel for the Loan Parties, in substantially the
form of Exhibit G hereto and as to such other matters as any
Lender Party through the Administrative Agent may reasonably
request.
(xix) A favorable opinion of Xxxxxx, Xxxx &
Xxxxxxxx LLP, special bankruptcy counsel to the Loan Parties,
in substantially the form of Exhibit H hereto and as to such
other matters as any Lender Party through the Administrative
Agent may reasonably request.
(b) All proceedings taken in connection with the execution of
this Agreement, the making of the Advances, the issuance of any Letter
of Credit, and the execution and delivery of all other Loan Documents
and all documents and papers relating thereto shall be satisfactory to
the Administrative Agent and its counsel. The Administrative Agent and
its counsel shall have received copies of such documents and papers as
the Administrative Agent or its counsel may reasonably request in
connection therewith, in all form and substance satisfactory to the
Administrative Agent and its counsel.
(c) The First Day Orders shall be reasonably satisfactory in
form and substance to the Administrative Agent, including, without
limitation, an order providing for the continuation of the pre-Filing
Date cash management system of the Borrowers and the Guarantors with
Citibank, N.A., as modified in accordance with the terms of this
Agreement.
(d) The Lender Parties shall be satisfied with the legal
structure and capitalization of each Loan Party and each of its
Subsidiaries the capital stock of which Subsidiaries is being pledged
pursuant to the Loan Documents, including the terms and conditions of
the charter, bylaws and each class of capital stock or other equity
interest of each Loan Party and each such Subsidiary and of each
agreement or instrument relating to such structure or capitalization.
(e) The Lender Parties shall be satisfied that all Existing
Debt, other than the Debt (including Debt under the Pre-Petition
Inventory Financing Agreements) identified on Schedule 4.01(t) hereto
(the "SURVIVING DEBT"), has been prepaid, redeemed or defeased in full
or otherwise satisfied and extinguished and that all such Surviving
Debt shall be on terms and conditions reasonably satisfactory to the
Lender Parties.
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(f) Before giving effect to the transactions contemplated by
the Transaction Documents and except as disclosed in the Parent
Guarantor's annual report on Form 10-K for the Fiscal Year ended
October 31, 1999 or otherwise disclosed to the Lender Parties in
writing prior to the date hereof, there shall have occurred no Material
Adverse Change since November 1, 1999 (other than the commencement of
the Cases).
(g) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a
Material Adverse Effect other than the matters described on Schedule
4.01(f) hereto (the "DISCLOSED LITIGATION") and the commencement of the
Cases or (ii) purports to affect the legality, validity or
enforceability of any Transaction Document or the consummation of the
transactions contemplated by the Transaction Documents, and there shall
have been no adverse change in the status, or financial effect on any
Loan Party or any of its Subsidiaries, of the Disclosed Litigation from
that described on Schedule 4.01(f) hereto.
(h) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated by the
Transaction Documents shall have been obtained (without the imposition
of any conditions that are not acceptable to the Lender Parties) and
shall remain in effect; and no law or regulation shall be applicable in
the judgment of the Lender Parties, in each case that restrains,
prevents or imposes materially adverse conditions upon the transactions
contemplated by the Transaction Documents or the rights of the Loan
Parties or their Subsidiaries freely to transfer or otherwise dispose
of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them other than the entry by the Bankruptcy Court of
the Interim Order or the Final Order, as applicable.
(i) The Lender Parties shall have completed a due diligence
investigation of the Parent Guarantor and its Subsidiaries in scope,
and with results, satisfactory to the Lender Parties, and nothing shall
have come to the attention of the Lender Parties during the course of
such due diligence investigation to lead them to believe that the
Information Memorandum was or has become misleading, incorrect or
incomplete in any material respect; without limiting the generality of
the foregoing, the Lender Parties shall have been given such access to
the management, records, books of account, contracts and properties of
the Parent Guarantor and its Subsidiaries as they shall have requested.
(j) The Borrowers shall have paid all accrued fees of the
Agents and the Lender Parties and all reasonable accrued expenses of
the Agents (including the reasonable accrued fees and expenses of
counsel to the Administrative Agent and local counsel to the Lender
Parties).
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(k) The Lender Parties shall be satisfied with the Parent
Guarantor's and each Borrower's management.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING, ISSUANCE
AND INCREASE OF AVAILABLE AMOUNT. The obligation of each Lender to make an
Advance (other than a Letter of Credit Advance made by the Issuing Bank or a
Lender pursuant to Section 2.03(c) and a Swing Line Advance made by a Lender
pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the
initial Borrowing) and the obligation of the Issuing Bank to issue a Letter of
Credit (including the initial issuance), renew a Letter of Credit, the right of
the Borrowers to request a Swing Line Borrowing shall be subject to the further
conditions precedent that on the date of such Borrowing, issuance, renewal or
increase (a) the following statements shall be true (and each of the giving of
the applicable Notice of Borrowing, Notice of Swing Line Borrowing, Notice of
Issuance, Notice of Renewal, or request for increase in Available Amount and the
acceptance by the Borrowers of the proceeds of such Borrowing or of such Letter
of Credit or the renewal of such Letter of Credit shall constitute a
representation and warranty by the Borrowers that both on the date of such
notice and on the date of such Borrowing, issuance, renewal or increase such
statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of such date, before and after giving
effect to such Borrowing, issuance, renewal or increase and to the
application of the proceeds therefrom, as though made on and as of such
date other than any such representations or warranties that, by their
terms, refer to a specific date other than the date of such Borrowing,
issuance, renewal or increase, in which case as of such specific date;
(ii) no Default has occurred and is continuing, or would
result from such Borrowing, issuance, renewal or increase or from the
application of the proceeds therefrom; and
(iii) for each Working Capital Advance or Swing Line Advance
made by the Swing Line Bank or issuance or renewal of any Letter of
Credit, (A) the sum of the Loan Values of the Eligible Collateral MINUS
$16,000,000 exceeds (B) the aggregate principal amount of the Working
Capital Advances PLUS Swing Line Advances PLUS Letter of Credit
Advances to be outstanding PLUS the aggregate Available Amount of all
Letters of Credit to be outstanding after giving effect to such
Advance, issuance, renewal or increase, respectively;
(b) the Interim Order shall be in full force and effect and
shall not have been vacated, reversed, modified or amended and there shall be no
stay of the performance of any obligation of either Borrower or any of the Loan
Parties, provided that if at the time of any Borrowing or the issuance of any
Letter of Credit the aggregate amount of either of which, when added to the sum
of the principal amount of all Advances then outstanding plus the aggregate
Available Amount under all Letters of Credit (assuming compliance with all
conditions to drawing), would exceed such amount authorized by the Bankruptcy
Court in the Interim Order (collectively, the "ADDITIONAL CREDIT"), the
Administrative Agent and each of the Lender Parties shall have received a
certified copy of an order of the Bankruptcy Court in substantially the form of
Exhibit F-2 (the "FINAL ORDER") and at the time of the extension of the
Additional Credit the Final Order shall be in full force and effect, and shall
not have been vacated, reversed, modified, amended and there shall be no stay of
the performance of any obligation of either Borrower or any of the Loan Parties
(the parties hereto acknowledge that the foregoing shall not preclude the entry
of any order of the Bankruptcy Court approving or authorizing an amendment or
modification of this Agreement or any other Loan Document or the Interim Order
permitted by Section 9.01 which amendment or modification shall be acceptable to
the Lenders whose consent is required to approve such amendment or modification
under Section 9.01); and
55
(c) the Administrative Agent shall have received such other
approvals, opinions or documents as any Lender Party through the Administrative
Agent may reasonably request.
SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
AND THE PARENT GUARANTOR. Each Borrower and the Parent Guarantor represents and
warrants as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) is duly qualified as a foreign
corporation, foreign limited liability company or foreign limited
partnership, as the case may be, and in good standing in each other
jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed except
where the failure to qualify or be licensed would not be reasonably
likely to have a Material Adverse Effect and (iii) has all requisite
power and authority (including, without limitation, all governmental
licenses, permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
56
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
date hereof (as to each such Subsidiary) the jurisdiction of its
organization, the number of shares of each class of capital stock
authorized, and the number outstanding, on the date hereof and the
percentage of the outstanding shares of each such class owned (directly
or indirectly) by such Loan Party and the number of shares covered by
all outstanding options, warrants, rights of conversion or purchase and
similar rights at the date hereof. All of the outstanding capital stock
of all of each Loan Party's Subsidiaries has been validly issued, is
fully paid and non-assessable and is owned by such Loan Party or one or
more of its Subsidiaries free and clear of all Liens, except those
created under the Collateral Documents and Liens permitted under
Section 5.01(a).
(c) The execution, delivery and performance by each Loan Party
of each Transaction Document to which it is or is to be a party, and
the consummation of the transactions contemplated by the Transaction
Documents, are within such Loan Party's powers, have been duly
authorized by all necessary corporate or other action and are
authorized by the Interim Order or the Final Order, as applicable, and
do not (i) contravene such Loan Party's charter or bylaws, (ii) violate
any law, rule, regulation (including, without limitation, Regulation X
of the Board of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination or award, (iii) conflict
with or result in the breach of, or constitute a default or require any
payment to be made under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting any Loan Party, any of its Subsidiaries or any of their
properties entered into after the Filing Date, or (iv) except for the
Liens created under the Loan Documents, the Interim Order, and the
Final Order, result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of any Loan Party or
any of its Subsidiaries. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which could be reasonably
likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of any
Transaction Document to which it is or is to be a party, or for the
consummation of the transactions contemplated by the Transaction
Documents, (ii) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or
maintenance of the Liens created under the Collateral Documents
(including the first priority nature thereof) or (iv) the exercise by
any Agent or any Lender Party of its rights under the Loan Documents or
the remedies in respect of the Collateral pursuant to the Collateral
Documents, except for (x) the entry by the Bankruptcy Court of the
Interim Order or the Final Order, as applicable, and (y) the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d) hereto, all of which have been duly obtained, taken,
given or made and are in full force and effect.
57
(e) This Agreement has been, and each other Transaction
Document when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and each
other Transaction Document when delivered hereunder will be, the legal,
valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms and
the Interim Order or the Final Order as applicable.
(f) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) would be reasonably
likely to have a Material Adverse Effect (other than the Disclosed
Litigation) or (ii) purports to affect the legality, validity or
enforceability of any Transaction Document or the consummation of the
transactions contemplated by the Transaction Documents other than the
Interim Order and the Final Order, and there has been no adverse change
in the status, or financial effect on any Loan Party or any of its
Subsidiaries, of the Disclosed Litigation from that described on
Schedule 4.01(f) hereto.
(g) The Consolidated balance sheets of the Parent Guarantor
and its Subsidiaries as at November 1, 1999, and the related
Consolidated statements of income and Consolidated statement of cash
flows of the Parent Guarantor and its Subsidiaries for the fiscal year
then ended, accompanied by an unqualified opinion of
PricewaterhouseCoopers LLC, independent public accountants, and the
Consolidated and Consolidating balance sheets of the Parent Guarantor
and its Subsidiaries as at January 31, 2000, and the related
Consolidated and Consolidating statements of income and Consolidated
statement of cash flows of the Parent Guarantor and its Subsidiaries
for the three months then ended, duly certified by the chief financial
officer of the Parent Guarantor, copies of which have been furnished to
each Lender Party, fairly present, subject, in the case of said balance
sheet as at January 31, 2000, and said statements of income and cash
flows for the nine months then ended, to year-end audit adjustments,
the Consolidated and Consolidating financial condition of the Parent
Guarantor and its Subsidiaries as at such dates and the Consolidated
and Consolidating results of operations of the Parent Guarantor and its
Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent
basis, and, except as disclosed in the Parent Guarantor's quarterly
report on Form 10-Q for the quarter ended January 31, 2000 or otherwise
disclosed to the Lender Parties in writing prior to the date hereof,
since November 1, 1999, there has been no Material Adverse Change
(other than the commencement of the Cases).
(h) The Consolidated and Consolidating pro forma balance
sheets of the Parent Guarantor and its Subsidiaries as at February 29,
2000, and the related Consolidated and Consolidating pro forma
statements of income and cash flows of the Parent Guarantor and its
Subsidiaries for the eleven months then ended, certified by the chief
financial officer of the Parent Guarantor, copies of which have been
furnished to each Lender Party, fairly present the Consolidated and
Consolidating pro forma financial condition of the Parent Guarantor and
its Subsidiaries as at such date and the Consolidated and Consolidating
pro forma results of operations of the Parent Guarantor and its
Subsidiaries for the period ended on such date, in each case giving
effect to the transactions contemplated by the Transaction Documents,
all in accordance with GAAP.
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(i) The Consolidated and Consolidating forecasted balance
sheets, statements of income and statements of cash flows of the Parent
Guarantor and its Subsidiaries delivered to the Lender Parties pursuant
to Section 3.01(a)(xi) or 5.03 were prepared in good faith on the basis
of the assumptions stated therein, which assumptions were fair in light
of the conditions existing at the time of delivery of such forecasts,
and represented, at the time of delivery, the Parent Guarantor best
estimate of its future financial performance.
(j) Neither the Information Memorandum nor any other
information, exhibit or report furnished by or on behalf of any Loan
Party to any Agent or any Lender Party (whether or not in writing) in
connection with the negotiation and syndication of the Loan Documents
or pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading.
(k) No Loan Party is engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance or drawings under any Letter of Credit 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.
(l) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither any
Loan Party nor any of its Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" or a "holding company",
as such terms are defined int he Public Utility Holding Company Act of
1935, as amended. Neither the making of any Advances, nor the issuance
of any Letters of Credit, nor the application of the proceeds or
repayment thereof by the Borrowers, nor the consummation of the other
transactions contemplated by the Transaction Documents, will violate
any provision of any such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
59
(m) Neither any Loan Party nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate
restriction that would be reasonably likely to have a Material Adverse
Effect.
(n) Each of the Interim Order and the Final Order, as
applicable, creates in favor of the Collateral Agent for the benefit of
the Secured Parties, a legal, valid and enforceable security interest
in the Collateral and each of the Interim Order and the Final Order, as
applicable, constitutes the creation of a fully perfected first
priority lien on, and security interest in, all right, title and
interest of the grantors thereunder in such Collateral in each case
prior and superior in right to any Person, except as otherwise provided
in the Interim Order and the Final Order, as applicable. The Loan
Parties are the legal and beneficial owners of the Collateral free and
clear of any Lien, except for the liens and security interests created
or permitted under the Loan Documents, the Interim Order and the Final
Order.
(o) (i) No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan.
(ii) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(iii) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated, within the
meaning of Title IV of ERISA.
(iv) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the Internal Revenue Service and furnished to the
Lender Parties, is complete and accurate and fairly presents the
funding status of such Plan, and since the date of such Schedule B
there has been no material adverse change in such funding status.
(p) (i) The operations and properties of each Loan Party and
each of its Subsidiaries comply in all material respects with all
applicable Environmental Laws and Environmental Permits, all past
non-compliance with such Environmental Laws and Environmental Permits
has been resolved without ongoing obligations or costs, and no
circumstances exist that would be reasonably likely to (A) form the
basis of an Environmental Action against any Loan Party or any of its
Subsidiaries or any of their properties that could have a Material
Adverse Effect or (B) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(ii) To the best of the Borrowers' knowledge, none of the
properties currently or formerly owned or operated by any Loan Party or
any of its Subsidiaries is listed or proposed for listing on the NPL or
on the CERCLIS or any analogous foreign, state or local list or is
adjacent to any such property; there are no and never have been any
underground or aboveground storage tanks or any surface impoundments,
septic tanks, pits, sumps or lagoons in which Hazardous Materials are
being or have been treated, stored or disposed on any property
currently owned or operated by any Loan Party or any of its
Subsidiaries or, to the best of its knowledge, on any property formerly
owned or operated by any Loan Party or any of its Subsidiaries; there
is no asbestos or asbestos-containing material on any property
currently owned or operated by any Loan Party or any of its
Subsidiaries; and to the best of the Borrowers' knowledge, Hazardous
Materials have not been released, discharged or disposed of on any
property currently or formerly owned or operated by any Loan Party or
any of its Subsidiaries in violation of Environmental Laws.
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(iii) Neither any Loan Party nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together
with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials in
violation of Environmental Laws at any site, location or operation,
either voluntarily or pursuant to the order of any governmental or
regulatory authority or the requirements of any Environmental Law; and
all Hazardous Materials generated, used, treated, handled or stored at,
or transported to or from, any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries have been
disposed of in a manner not reasonably expected to result in material
liability to any Loan Party or any of its Subsidiaries.
(q) (i) Each Loan Party and each of its Subsidiaries and
Affiliates has filed, has caused to be filed or has been included in
all tax returns (Federal, state, local and foreign) required to be
filed and has paid all taxes shown thereon to be due, together with
applicable interest and penalties, except to the extent prohibited by
the Bankruptcy Code in connection with the Cases.
(ii) Set forth on Schedule 4.01(q) hereto is a complete and
accurate list, as of the date hereof, of each taxable year of each Loan
Party and each of its Subsidiaries and Affiliates for which Federal
income tax returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or collection has not
occurred by reason of extension or otherwise (an "OPEN YEAR").
(iii) The aggregate unpaid amount, as of the date hereof, of
adjustments to the Federal income tax liability of each Loan Party and
each of its Subsidiaries and Affiliates proposed by the Internal
Revenue Service with respect to Open Years does not exceed $7,500,000.
No issues have been raised by the Internal Revenue Service in respect
of Open Years that, in the aggregate, would be reasonably likely to
have a Material Adverse Effect.
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(iv) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each Loan
Party and its Subsidiaries and Affiliates proposed by all state, local
and foreign taxing authorities (other than amounts arising from
adjustments to Federal income tax returns) does not exceed $7,500,000.
No issues have been raised by such taxing authorities that, in the
aggregate, would be reasonably likely to have a Material Adverse
Effect.
(r) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that would be reasonably
likely to have a Material Adverse Effect.
(s) Set forth on Schedule 4.01(s) hereto is a complete and
accurate list of all Existing Debt separately identified by category
(e.g. trade payables, payroll, Debt for Borrowed Money and other)
incurred prior to the Filing Date. There are no material liabilities or
obligations for Debt other than (i) the liabilities and obligations
listed on Schedule 4.01(t) or (ii) the Obligations.
(t) Set forth on Schedule 4.01(t) hereto is a complete and
accurate list of all Surviving Debt, showing as of the date hereof the
principal amount outstanding or, in the case of a revolving credit
facility, the aggregate amount of the commitments thereunder, the
maturity date thereof and the amortization schedule therefor.
(u) Set forth on Schedule 4.01(u) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of
its Subsidiaries, showing as of the date hereof the street address,
county or other relevant jurisdiction, state, record owner and book and
estimated fair value thereof. Each Loan Party or such Subsidiary has
good, marketable and insurable fee simple title to such real property,
free and clear of all Liens, other than Liens created or permitted by
the Loan Documents.
(v) Set forth on Schedule 4.01(v) hereto is a complete and
accurate list of all leases of real property under which any Loan Party
or any of its Subsidiaries is the lessee, showing as of the date hereof
the street address, county or other relevant jurisdiction, state,
lessor, lessee, expiration date and annual rental cost thereof. Each
such lease is the legal, valid and binding obligation of the lessor
thereof, enforceable in accordance with its terms.
(w) Set forth on Schedule 4.01(w) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries on the date hereof, showing as of the date hereof the
amount, obligor or issuer and maturity, if any, thereof.
(x) Set forth on Schedule 4.01(x) hereto is a complete and
accurate list of all patents, trademarks, trade names, service marks
and copyrights, and all applications therefor and licenses thereof, of
each Loan Party or any of its Subsidiaries, showing as of the date
hereof the jurisdiction in which registered, the registration number,
the date of registration and the expiration date.
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(y) Each Non-Filing Subsidiary is an Immaterial Subsidiary
(other than MicroAge Teleservices, L.L.C. and Eleris, Inc.).
(z) The Parent Guarantor has, independently and without
reliance upon the Administrative Agent or any Lender Party and based on
such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into the Parent Guaranty and
each other Loan Document to which it is or is to be a party, and the
Parent Guarantor has established adequate means of obtaining from each
Loan Party on a continuing basis information pertaining to, and is now
and on a continuing basis will be completely familiar with, the
business, condition (financial or otherwise), operations, performance,
properties and prospects of such Loan Party.
ARTICLE V
COVENANTS OF THE BORROWERS AND THE PARENT GUARANTOR
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, each Borrower and the Parent Guarantor will:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and the Racketeer Influenced
and Corrupt Organizations Chapter of the Organized Crime Control Act of
1970; PROVIDED, HOWEVER, each Loan Party shall comply in all respects
with (i) the Bankruptcy Code, (ii) the Federal Rules of Bankruptcy
Procedure and (iii) the local rules and orders of the Bankruptcy Court.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent to the extent permitted or required under the Bankruptcy
Code and by the Bankruptcy Court, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property and
(ii) all lawful claims that, if unpaid, might by law become a Lien upon
its property; PROVIDED, HOWEVER, that neither the Parent Guarantor nor
any of its Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in good faith
and by proper proceedings and as to which appropriate reserves are
being maintained, unless and until any Lien resulting therefrom
attaches to its property and becomes enforceable against its other
creditors.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each
of its Subsidiaries and all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and
renew and cause each of its Subsidiaries to obtain and renew all
Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove, mitigate and
clean up all Hazardous Materials from any of its properties, in
accordance with the requirements of all Environmental Laws; PROVIDED,
HOWEVER, that neither the Parent Guarantor nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or
other action to the extent that its obligation to do so is being
contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
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(d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Parent Guarantor or such Subsidiary operates.
(e) PRESERVATION OF LEGAL EXISTENCE, ETC. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises;
PROVIDED, HOWEVER, that the Parent Guarantor and its Subsidiaries may
consummate any merger or consolidation permitted under Section 5.02(d)
and PROVIDED FURTHER that neither the Parent Guarantor nor any of its
Subsidiaries shall be required to preserve any right, permit, license,
approval, privilege or franchise if the Board of Directors of the
Parent Guarantor or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Parent Guarantor or such Subsidiary, as the case may
be, and that the loss thereof is not disadvantageous in any material
respect to the Parent Guarantor, such Subsidiary or the Lender Parties.
(f) VISITATION RIGHTS. At any reasonable time and from time to
time and after providing at least two Business Days prior notice if no
Default shall have occurred and be continuing, permit any of the Agents
or any of the Lender Parties or any agents or representatives thereof,
to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Parent Guarantor and
any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Parent Guarantor and any of its Subsidiaries with any
of their officers or directors and with their independent certified
public accountants.
(g) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Parent Guarantor and each such Subsidiary in accordance
with generally accepted accounting principles in effect from time to
time.
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(h) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(i) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates on terms that are fair
and reasonable and no less favorable to the Parent Guarantor or such
Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate; PROVIDED, HOWEVER, that all
transactions with Non-Filing subsidiaries are prohibited other than the
transactions expressly contemplated by the Eleris Documents and as
expressly permitted in Section 5.02(y).
(j) COVENANT TO GUARANTEE OBLIGATIONS AND GIVE SECURITY. Upon
(x) the request of the Collateral Agent following the occurrence and
during the continuance of a Default, (y) the formation or acquisition
of any new direct or indirect Subsidiaries by any Loan Party or (z) the
acquisition of any property by any Loan Party, and such property, in
the judgment of the Collateral Agent, shall not already be subject to a
perfected first priority security interest in favor of the Collateral
Agent for the benefit of the Secured Parties, then the Borrowers shall,
in each case at the Borrowers' expense:
(i) in connection with the formation or acquisition
of a Subsidiary, within 10 days after such formation or
acquisition, cause each such Subsidiary, and cause each direct
and indirect parent of such Subsidiary (if it has not already
done so), to duly execute and deliver to the Collateral Agent
a guaranty or guaranty supplement, in form and substance
satisfactory to the Collateral Agent, guaranteeing the other
Loan Parties' obligations under the Loan Documents,
(ii) within 10 days after such request, formation or
acquisition, furnish to the Collateral Agent a description of
the real and personal properties of the Loan Parties and their
respective Subsidiaries in detail satisfactory to the Agent,
(iii) within 15 days after such request, formation or
acquisition, duly execute and deliver, and cause each such
Subsidiary and each direct and indirect parent of such
Subsidiary (if it has not already done so) to duly execute and
deliver, to the Collateral Agent mortgages, pledges,
assignments, security agreement supplements and other security
agreements, as specified by and in form and substance
satisfactory to the Collateral Agent, securing payment of all
the Obligations of the applicable Loan Party, such Subsidiary
or such parent, as the case may be, under the Loan Documents
and constituting Liens on all such properties,
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(iv) within 30 days after such request, formation or
acquisition, take, and cause such Subsidiary or such parent to
take, whatever action (including, without limitation, the
recording of mortgages, the filing of Uniform Commercial Code
financing statements and the giving of notices) may be
necessary or advisable in the opinion of the Collateral Agent
to vest in the Collateral Agent (or in any representative of
the Collateral Agent designated by it) valid and subsisting
Liens on the properties purported to be subject to the
mortgages, pledges, assignments, security agreement
supplements and security agreements delivered pursuant to this
Section 5.01(j), enforceable against all third parties in
accordance with their terms,
(v) within 60 days after such request, formation or
acquisition, deliver to the Collateral Agent, upon the request
of the Collateral Agent in its sole discretion, a signed copy
of a favorable opinion, addressed to the Collateral Agent and
the other Secured Parties, of counsel for the Loan Parties
acceptable to the Collateral Agent as to the matters contained
in clauses (i), (iii) and (iv) above, as to such guaranties,
guaranty supplements, pledges, assignments, security agreement
supplements and security agreements being legal, valid and
binding obligations of each Loan Party thereto enforceable in
accordance with their terms and as to such other matters as
the Collateral Agent may reasonably request,
(vi) as promptly as practicable after such request,
formation or acquisition, deliver, upon the request of the
Collateral Agent in its sole discretion, to the Collateral
Agent with respect to each parcel of real property owned or
held by the entity that is the subject of such request,
formation or acquisition title reports, surveys and
engineering, soils and other reports, and environmental
assessment reports, each in scope, form and substance
satisfactory to the Collateral Agent, PROVIDED, HOWEVER, that
to the extent that any Loan Party or any of its Subsidiaries
shall have otherwise received any of the foregoing items with
respect to such real property, such items shall, promptly
after the receipt thereof, be delivered to the Collateral
Agent,
(vii) upon the occurrence and during the continuance
of a Default, promptly cause to be deposited any and all cash
dividends paid or payable to it or any of its Subsidiaries
from any of its Subsidiaries from time to time into the Cash
Collateral Account, and with respect to all other dividends
paid or payable to it or any of its Subsidiaries from time to
time, promptly execute and deliver, or cause such Subsidiary
to promptly execute and deliver, as the case may be, any and
all further instruments and take or cause such Subsidiary to
take, as the case may be, all such other action as the
Collateral Agent may deem necessary or desirable in order to
obtain and maintain from and after the time such dividend is
paid or payable a perfected, first priority lien on and
security interest in such dividends, and
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(viii) at any time and from time to time, promptly
execute and deliver any and all further instruments and
documents and take all such other action as the Collateral
Agent may deem necessary or desirable in obtaining the full
benefits of, or in perfecting and preserving the Liens of,
such guaranties, mortgages, pledges, assignments, security
agreement supplements and security agreements.
(k) FURTHER ASSURANCES. (i) Promptly upon request by any
Agent, or any Lender Party through the Administrative Agent, correct,
and cause each of its Subsidiaries promptly to correct, any material
defect or error that may be discovered in any Loan Document or in the
execution, acknowledgment, filing or recordation thereof, and
(ii) Promptly upon request by any Agent, or any Lender Party
through the Administrative Agent, do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, assignments,
financing statements and continuations thereof, termination statements,
notices of assignment, transfers, certificates, assurances and other
instruments as any Agent, or any Lender Party through the
Administrative Agent, may reasonably require from time to time in order
to (A) carry out more effectively the purposes of the Loan Documents,
the Interim Order and the Final Order, as applicable (B) to the fullest
extent permitted by applicable law, subject any Loan Party's or any of
its Subsidiaries' properties, assets, rights or interests to the Liens
now or hereafter intended to be covered by any of the Collateral
Documents, (C) perfect and maintain the validity, effectiveness and
priority of any of the Collateral Documents and any of the Liens
intended to be created thereunder and (D) assure, convey, grant,
assign, transfer, preserve, protect and confirm more effectively unto
the Secured Parties the rights granted or now or hereafter intended to
be granted to the Secured Parties under any Loan Document or under any
other instrument executed in connection with any Loan Document to which
any Loan Party or any of its Subsidiaries is or is to be a party, and
cause each of its Subsidiaries to do so.
(l) PERFORMANCE OF RELATED DOCUMENTS. Perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the terms
and provisions of each Related Document to be performed or observed by
it, maintain each such Related Document in full force and effect,
enforce such Related Document in accordance with its terms, take all
such action to such end as may be from time to time requested by the
Administrative Agent and, upon request of the Administrative Agent,
make to each other party to each such Related Document such demands and
requests for information and reports or for action as any Loan Party or
any of its Subsidiaries is entitled to make under such Related Document
except as expressly otherwise permitted under the Bankruptcy Code.
(m) COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all obligations in respect of all leases of real
property to which the Parent Guarantor or any of its Subsidiaries is a
party, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to
be forfeited or canceled except as expressly permitted under Section
365 of the Bankruptcy Code and consented to by the Administrative Agent
in writing prior to such action being taken (such consent not to be
unreasonably withheld), notify the Administrative Agent of any default
by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and
cause each of its Subsidiaries to do so.
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(n) CASH CONCENTRATION ACCOUNT; L/C CASH COLLATERAL ACCOUNT.
(i) Maintain, and cause each of its Subsidiaries to maintain, a main
cash concentration account with Citibank and lockbox accounts into
which all proceeds of Collateral are paid with one or more banks
acceptable to the Collateral Agent that have accepted the assignment of
such accounts to the Collateral Agent for the benefit of the Secured
Parties pursuant to the Security Agreement.
(ii) Establish and maintain a L/C Cash Collateral
Account upon the Collateral Agent's request.
(o) PRIORITY. Acknowledge pursuant to Section 364(c)(1) of the
Bankruptcy Code, the obligations of the Loan Parties hereunder and
under the other Loan Documents constitute allowed administrative
expense claims in the Cases having priority over all administrative
expenses of the kind specified in Sections 503(b) or 507(b) of the
Bankruptcy Code subject only to the Carve-Out.
(p) VALIDITY OF LOAN DOCUMENTS. Use its best efforts to object
to any application made on behalf of any Loan Party or by any Person to
the validity of any Loan Document or the applicability or
enforceability of any Loan Document or which seeks to void, avoid,
limit, or otherwise adversely affect the security interest created by
or in any Loan Document or any payment made pursuant thereto.
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, neither any Borrower nor the Parent Guarantor will, at
any time:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit
any of its Subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing statement that
names the Parent Guarantor or any of its Subsidiaries as debtor, or
sign or suffer to exist, or permit any of its Subsidiaries to sign or
suffer to exist, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any
of its Subsidiaries to assign, any accounts or other right to receive
income (or apply to the Bankruptcy Court for authority to do so),
except:
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(i) Liens created under the Loan Documents and
contemplated by the Interim Order and the Final Order;
(ii) Permitted Liens;
(iii) Liens existing on the Filing Date and
described on Schedule 5.02(a) hereto;
(iv) Liens arising in connection with Capitalized
Leases permitted under Section 5.02(b)(iii)(B); PROVIDED that
no such Lien shall extend to or cover any Collateral or assets
other than the assets subject to such Capitalized Leases;
(v) Liens granted after the Filing Date in
connection with the Pre-Petition Inventory Financing
Agreements and as expressly permitted under the Interim Order
and the Filing Order;
(vi) Liens securing Debt permitted under Section
5.02(b)(iii)(I);
(vii) Liens arising in connection with the Floor
Planning Arrangements and as expressly permitted under the
Interim Order and the Final Order, and
(viii) Liens securing Debt permitted under Section
5.02(b)(iii)(F).
(b) DEBT. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt, except:
(i) [Intentionally Omitted.]
(ii) in the case of any Subsidiary of any Borrower,
Debt owed to such Borrower or to a wholly owned Subsidiary of
such Borrower, PROVIDED that, in each case, such Debt (x)
shall constitute Pledged Debt, (y) shall be on terms
acceptable to the Administrative Agent and (z) shall be
evidenced by promissory notes in form and substance
satisfactory to the Administrative Agent and such promissory
notes shall be pledged as security for the Obligations under
the Loan Documents of the holder thereof and delivered to the
Collateral Agent pursuant to the terms of the Security
Agreement; and
(iii) in the case of the Loan Parties;
(A) Debt under the Loan Documents;
(B) Capitalized Leases not to exceed in the
aggregate $25,000,000 at any time outstanding;
(C) the Surviving Debt;
(D) indorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business;
(E) Debt under the Pre-Petition Inventory Financing
Agreements;
(F) Debt under inventory flooring arrangements
(other than the Pre-Petition Inventory Financing Agreements
and the Floor Planning Arrangements PROVIDED THAT with respect
to Floor Planning Arrangements, the terms of such arrangement
including, without limitation, intercreditor arrangements are
acceptable to the Administrative Agent) provided by a
manufacturer of computer equipment, secured by inventory and
equipment bearing the trademark or tradename of such
manufacturer, provided that, (x) the aggregate principal
amount of such Debt shall not exceed $10,000,000, and (y) the
terms of such arrangement including, without limitation,
intercreditor arrangements, are acceptable to the
Administrative Agent;
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(G) Debt extending the maturity of, or refunding or
refinancing, in whole or in part, Debt described in clauses
(C), (E) and (H) (other than the Pre-Petition Inventory
Financing Agreements and Floor Planning Arrangements to which
IBM Credit Corporation is a party) above, PROVIDED that (1)
the terms of any such extending, refunding or refinancing
Debt, and of any agreement entered into and of any instrument
issued in connection therewith, are otherwise permitted by the
Loan Documents, (2) the terms relating to principal amount,
amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any
such extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in
connection therewith, are no less favorable in any material
respect to the Loan Parties or the Lender Parties than the
terms of any agreement or instrument governing the Debt being
extended, refunded or refinanced and the interest rate
applicable to such extending refunding or refinancing Debt
does not exceed the then applicable market interest rate, (3)
in the case of any Surviving Debt, the principal amount of
such Surviving Debt shall not be increased above the principal
amount thereof outstanding immediately prior to such
extension, refunding or refinancing and (4) in the case of any
Pre-Petition Inventory Financing Agreement, the creditors
thereof shall have entered into intercreditor agreements with
the Collateral Agent and the applicable Borrower that are no
less favorable in any material respect to the Loan Parties or
the Lender Parties than the terms of the intercreditor
agreement entered into with the creditor of such Pre-Petition
Inventory Financing Agreement prior to the Filing Date being
extended, refunded or refinanced;
(H) Debt under the Floor Planning Arrangements;
(I) Debt secured by a mortgage on the real property
located at 1330 West Southern, Tempe, Arizona.
(c) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business
as carried on at the date hereof.
(d) MERGERS, ETC. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries
to do so (or apply to the Bankruptcy Court for authority to do so
except in connection with the Reorganization Plan), except that any
Subsidiary (other than a Non-Filing Subsidiary unless with the prior
written consent of the Administrative Agent) of any Borrower may merge
into or consolidate with any other Subsidiary (other than a Non-Filing
Subsidiary unless with the prior written consent of the Administrative
Agent) of such Borrower, PROVIDED that, in the case of any such merger
or consolidation, the Person formed by such merger or consolidation
shall be a wholly owned Subsidiary of such Borrower; PROVIDED, HOWEVER,
that in each case, immediately after giving effect thereto, no event
shall occur and be continuing that constitutes a Default and, in the
case of any such merger to which any Borrower is a party, such Borrower
is the surviving corporation.
(e) SALES, ETC., OF ASSETS. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any assets, or grant any option or other right
to purchase, lease or otherwise acquire any assets (or apply to the
Bankruptcy Court for authority to do so, except in connection with the
Reorganization Plan) other than:
(i) Inventory to be sold in the ordinary course of
its business (except to any Non-Filing Subsidiary); and
(ii) sales or other dispositions of the membership
interests or substantially all of the assets of MicroAge
Teleservices, L.L.C. so long as (A) the purchase price paid to
the Borrowers or such Subsidiary shall be no less than the
fair market value at the time of such sale and (B) the
purchase price shall be paid to the Borrower or such
Subsidiary in cash;
PROVIDED that in the case of clause (ii) above, the Borrowers shall,
within one (1) Business Day after the date of receipt of the Net Cash
Proceeds from such sale, prepay the Advances pursuant to, and in
accordance with, Section 2.06(b)(ii).
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(f) INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person,
except,
(i) Investments by the Parent Guarantor and its
Subsidiaries in their Subsidiaries outstanding on the date
hereof;
(ii) loans and advances to employees in the ordinary
course of the business of the Parent Guarantor and its
Subsidiaries (other than Non-Filing Subsidiaries) as presently
conducted in an aggregate principal amount not to exceed
$500,000 at any time outstanding;
(iii) Investments by the Parent Guarantor and its
Subsidiaries in Cash Equivalents in an aggregate principal
amount not to exceed $5,000,000 at any time outstanding;
(iv) Investments existing on the date hereof and
described on Schedule 4.01(w) hereto;
(v) [intentionally omitted]
(vi) Investments consisting of intercompany Debt
permitted under Section 5.02(b)(ii); and
(g) RESTRICTED PAYMENTS. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of
its capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to its
stockholders as such, make any distribution of assets, capital stock,
warrants, rights, options, obligations or securities to its
stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit
any of its Subsidiaries to do any of the foregoing or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any capital stock of the Parent Guarantor or any warrants,
rights or options to acquire such capital stock or to issue or sell any
capital stock or any warrants, rights or options to acquire such
capital stock (or apply to the Bankruptcy Court for authority to do so,
except in connection with the Reorganization Plan), except that, so
long as no Default shall have occurred and be continuing at the time of
any action described in clause (i) or (ii) below or would result
therefrom:
(i) any Subsidiary of any Borrower may (A) declare
and pay cash dividends to such Borrower and (B) declare and
pay cash dividends to any other Loan Party (other than
Non-Filing Subsidiary) of which it is a Subsidiary,
(ii) the Borrowers may pay cash dividends or
otherwise transfer funds to the Parent Guarantor or MicroAge
Computer Centers, Inc. for operating expenses incurred in the
normal course of business by the Parent Guarantor or MicroAge
Computer Centers, Inc. or paid by the Parent Guarantor or
MicroAge Computer Centers, Inc. on behalf of the Borrowers.
Such expenses include all payroll and benefits costs for all
Subsidiaries of the Parent Guarantor, telephone, travel, rent
and other occupancy costs, professional expenses, including
consulting, audit, accounting and legal expenses, corporate
insurance expenses, data processing costs and other operating
expenses.
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(iii) the Parent Guarantor and the Borrowers may
issue stock options to the directors and employees of such
Loan Party and the Subsidiary of MTS capitalized with the
business to business Internet assets and business of MTS (the
"BTOB SUBSIDIARY") may issue stock options to the officers and
employees of the BtoB Subsidiary in an aggregate amount not to
exceed 20% of the capital stock of the BtoB Subsidiary.
(h) AMENDMENTS OF CONSTITUTIVE DOCUMENTS. Amend, or permit any
of its Subsidiaries to amend, its certificate of incorporation or
bylaws or other constitutive documents in any material respect.
(i) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies
or reporting practices, except as required by generally accepted
accounting principles or (ii) Fiscal Year.
(j) PREPAYMENTS, ETC., OF DEBT. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in
any manner, or make any payment in violation of any subordination terms
of, any Debt, except (i) the prepayment of the Advances in accordance
with the terms of this Agreement and (ii) regularly scheduled or
required repayments or redemptions of Surviving Debt, or amend, modify
or change in any manner any term or condition of any Surviving Debt, or
permit any of its Subsidiaries to do any of the foregoing other than to
prepay any Debt payable to any Borrower.
(k) AMENDMENT, ETC., OF RELATED DOCUMENTS. Cancel or terminate
any Related Document or consent to or accept any cancellation or
termination thereof, amend, modify or change in any manner any term or
condition of any Related Document or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term
or condition of any Related Document, agree in any manner to any other
amendment, modification or change of any term or condition of any
Related Document (other than pursuant to Section 365 of the Bankruptcy
Code) or take any other action in connection with any Related Document
that would impair the value of the interest or rights of any Loan Party
thereunder or that would impair the rights or interests of any Agent or
any Lender Party, or otherwise amend any provision or term of any
Pre-Petition Inventory Financing Agreement or Floor Planning
Arrangement to which IBM Credit Corporation is a party; or permit any
of its Subsidiaries to do any of the foregoing; PROVIDED, that any
amendment to any Pre-Petition Inventory Financing Agreement or Floor
Planning Arrangement to which IBM Credit Corporation is a party, may be
made with the consent of the Administrative Agent.
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(m) NEGATIVE PLEDGE. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets except (i) in favor of the Secured
Parties or (ii) in connection with (A) any Surviving Debt and (B) any
Capitalized Lease permitted by Section 5.02(b)(iii)(B) solely to the
extent that such Capitalized Lease prohibits a Lien on the property
subject thereto.
(n) PARTNERSHIPS, ETC. Become a general partner in any general
or limited partnership or joint venture, or permit any of its
Subsidiaries to do so, other than any Subsidiary the sole assets of
which consist of its interest in such partnership or joint venture.
(o) SPECULATIVE TRANSACTIONS. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options
or futures contracts or any similar speculative transactions.
(p) CAPITAL EXPENDITURES. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the
aggregate of all such Capital Expenditures made by the Parent Guarantor
and its Subsidiaries in any period set forth below to exceed the amount
set forth below for such period:
=====================================================================
Period Amount
---------------------------------------------------------------------
Fiscal Quarter ended July 31, 2000 $ 2,100,000
---------------------------------------------------------------------
Two Fiscal Quarters ended October 31, 2000 $ 4,200,000
---------------------------------------------------------------------
Three Quarters ended January 31, 2001 $ 9,200,000
---------------------------------------------------------------------
Four Fiscal Quarters ended April 30, 2001 $14,200,000
---------------------------------------------------------------------
Fiscal Quarter ended July 31, 2001 $17,100,000
---------------------------------------------------------------------
Two Fiscal Quarters ended October 31, 2001 $20,000,000
=====================================================================
(q) FORMATION OF SUBSIDIARIES. Organize or invest, or permit
any Subsidiary to organize or invest, in any new Subsidiary.
(r) LIMITATION ON PAYMENT RESTRICTIONS. Enter into or suffer
to exist, or permit any Subsidiary to enter into or suffer to exist,
any agreement limiting the ability of any of its Subsidiaries to
declare or pay dividends or other distributions in respect of its
capital stock or make loans or advances to, or otherwise transfer
assets to or invest in, the Parent Guarantor or any Subsidiary of the
Parent Guarantor (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or
otherwise), except the Loan Documents.
(s) INTERIM ORDER AND FINAL ORDER. Make or permit to be made
any changes, amendment or modifications, or any application or motion
for any change, amendment or modification to the Interim Order or the
Final Order. The parties acknowledge that the foregoing shall not
preclude the entry of any order of the Bankruptcy Court approving or
authorizing an amendment or modification of this Agreement or the other
Loan Documents or the Interim Order or the Final Order permitted by
Section 9.01 which order shall be acceptable to the Lenders whose
consent is required to approve such amendment or modification under
Section 9.01.
73
(t) APPLICATION TO THE BANKRUPTCY COURT. Apply to the
Bankruptcy Court for the authority to take any action that is
prohibited by the terms of this Agreement and the other Loan Documents
or refrain from taking any action that is required to be taken by the
terms of this Agreement and the other Loan Documents.
(u) CHAPTER 11 CLAIMS. Incur, create assume, suffer to exist
or permit or make any application or motion for any other
Super-Priority Claim or Lien which is PARI PASSU with or senior to the
claims of the Administrative Agent and the Lenders granted pursuant to
this Agreement, the Interim Order or the Final Order, other than as
expressly contemplated and permitted by the Interim Order or the Final
Order.
(v) RECLAMATION CLAIMS; BANKRUPTCY CODE SECTION 546(G)*
AGREEMENTS. (a) Make any payments or transfer any property on account
of claims asserted by vendors of any Loan Party for reclamation in
accordance with Section 2-702 of the Uniform Commercial Code and
Section 546(c) of the Bankruptcy Code, and (b) enter into any
agreements or file any motion seeking a Bankruptcy Court order for the
return of inventory to any vendor pursuant to Section 546(g)* of the
Bankruptcy Code, other than as expressly contemplated and permitted by
the Interim Order or the Final Order.
(w) LINES OF BUSINESS. Engage to any substantial extent in any
line or lines of business activity other than businesses of the same
general type as those in which the Borrower and its Subsidiaries are
engaged on the date of this Agreement or which are related thereto.
(x) EMPLOYMENT AGREEMENTS. Amend, modify or change in any
manner any term or condition, or make any application or motion to do
so, of any Employment Agreement or give any consent, waiver or approval
thereunder to increase the compensation payable thereunder other than
increases that are in the ordinary course and consistent with past
business practices.
(y) NON-FILING SUBSIDIARIES. Will not and will not permit any
of its Subsidiaries to directly or indirectly (i) purchase, lease,
transfer, sell or exchange any of its property or assets of any kind or
the rendering of services to any Non-Filing Subsidiary, (ii) pay any
amounts owing to any Non-Filing Subsidiary and all such payments owing
are hereby subordinate to the payment in full of all Obligations
hereunder, (iii) make or permit to exist any loans or advances to
Non-Filing Subsidiaries, or (iv) apply to the Bankruptcy Court for
authority to do any of the foregoing; PROVIDED, HOWEVER, the Borrowers
shall be permitted to (i) continue to conduct business with MicroAge
Teleservices, L.L.C. ("TELESERVICES") in the ordinary course and
consistent with past business practices for a period of 30 days from
the date of the Initial Extension of Credit (the "PERMITTED PERIOD")
and (ii) make advances to
74
Teleservices for operating expenses in the normal course of business
not to exceed the sum of (x) the amounts deposited into a Blocked
Account for credit to TeleServices plus (y) an amount not to exceed
$500,000 per month and $2,000,000 in the aggregate; PROVIDED FURTHER
that at the end of the Permitted Period such amount shall be reduced by
the amount set forth in clause (x) above; PROVIDED, HOWEVER, that if at
the end of any month, the amount for such month specified in clause (y)
above exceeds the amount of advances made to Teleservices during such
month (the "EXCESS AMOUNT"), the Borrowers shall be permitted to make
additional advances in the next month in an amount equal to such Excess
Amount. Such expenses include all payroll and benefits costs,
telephone, travel, rent or other occupancy costs, professional
expenses, including consulting, audit, accounting and legal expenses,
corporate insurance expenses, data processing costs and other ordinary
course operating expenses.
SECTION 5.03. REPORTING REQUIREMENTS. So long as any Advance
or any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Parent Guarantor will furnish to the Agents and
the Lender Parties:
(a) DEFAULT NOTICE. As soon as possible and in any event
within two days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material Adverse
Effect continuing on the date of such statement, a statement of the
chief financial officer of the Parent Guarantor setting forth details
of such Default and the action that the Parent Guarantor has taken and
proposes to take with respect thereto.
(b) ANNUAL FINANCIALS. As soon as available (x) in any event
within 45 days after the end of each Fiscal Year, preliminary
Consolidated and Consolidating statements of income and cash flows of
the Parent Guarantor and its Subsidiaries for such Fiscal Year, in
reasonable detail and duly certified (subject to year-end audit
adjustments) by the chief financial officer of the Parent Guarantor as
having been prepared in accordance with GAAP, together with (i) a
certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement
as to the nature thereof and the action that the Parent Guarantor has
taken and proposes to take with respect thereto and (ii) a schedule in
form satisfactory to the Administrative Agent of the computations used
by the Parent Guarantor in determining compliance with the covenants
contained in Section 5.04, PROVIDED that in the event of any change in
GAAP used in the preparation of such financial statements, the Parent
Guarantor shall also provide, if necessary for the determination of
compliance with Section 5.04, a statement of reconciliation conforming
such financial statements to GAAP and (y) and in any event within 90
days after the end of each Fiscal Year, a copy of the annual audit
report for such year for the Parent Guarantor and its Subsidiaries,
including therein Consolidated balance sheets of the Parent Guarantor
and its Subsidiaries as of the end of such Fiscal Year and Consolidated
statements of income and a Consolidated statement of cash flows of the
Parent Guarantor and its Subsidiaries for such Fiscal Year, in each
case accompanied
75
by an opinion acceptable to the Required Lenders of
PricewaterhouseCoopers LLC or other independent public accountants of
recognized standing acceptable to the Required Lenders, together with
(i) a certificate of such accounting firm to the Lender Parties stating
that in the course of the regular audit of the business of the Parent
Guarantor and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement
as to the nature thereof, (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by such accountants in
determining, as of the end of such Fiscal Year, compliance with the
covenants contained in Section 5.04, PROVIDED that in the event of any
change in GAAP used in the preparation of such financial statements,
the Parent Guarantor shall also provide, if necessary for the
determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP, (iii)
Consolidating balance sheets of the Parent Guarantor and the Borrowers
as of the end of such Fiscal Year and Consolidating statements of
income and cash flows of the Parent Guarantor and the Borrowers for
such Fiscal Year, all in reasonable detail and duly certified by the
chief financial officer of the Parent Guarantor as having been prepared
in accordance with GAAP and (iv) a certificate of the chief financial
officer of the Parent Guarantor stating that no Default has occurred
and is continuing or, if a default has occurred and is continuing, a
statement as to the nature thereof and the action that the Parent
Guarantor has taken and proposes to take with respect thereto.
(c) QUARTERLY FINANCIALS. As soon as available and in any
event within 45 days after the end of each of the first three quarters
of each Fiscal Year, Consolidated and Consolidating balance sheets of
the Parent Guarantor and its Subsidiaries as of the end of such quarter
and Consolidated and Consolidating statements of income and a
Consolidated statement of cash flows of the Parent Guarantor and its
Subsidiaries for the period commencing at the end of the previous
fiscal quarter and ending with the end of such fiscal quarter and
Consolidated and Consolidating statements of income and a Consolidated
statement of cash flows of the Parent Guarantor and its Subsidiaries
for the period commencing at the end of the previous Fiscal Year and
ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding period
of the preceding Fiscal Year, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the chief
financial officer of the Parent Guarantor as having been prepared in
accordance with GAAP, together with (i) a certificate of said officer
stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof
and the action that the Parent Guarantor has taken and proposes to take
with respect thereto and (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by the Parent Guarantor
in determining compliance with the covenants contained in Section 5.04,
PROVIDED that in the event of any change in GAAP used in the
preparation of such financial statements, the Parent Guarantor shall
also provide, if necessary for the determination of compliance with
Section 5.04, a statement of reconciliation conforming such financial
statements to GAAP.
76
(d) MONTHLY FINANCIALS. As soon as available and in any event
within 30 days after the end of each month (other than any month that
is the last month of a Fiscal Year or of the first three fiscal
quarters of a Fiscal Year for which financial statements are delivered
pursuant to Section 5.03(b) or (c), as the case may be), a Consolidated
balance sheet of the Parent Guarantor and its Subsidiaries as of the
end of such month and Consolidated and Consolidating statements of
income and a Consolidated statement of cash flows of the Parent
Guarantor and its Subsidiaries for the period commencing at the end of
the previous month and ending with the end of such month and
Consolidated and Consolidating statements of income and a Consolidated
statement of cash flows of the Parent Guarantor and its Subsidiaries
for the period commencing at the end of the previous Fiscal Year and
ending with the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding month
of the preceding Fiscal Year, all in reasonable detail and duly
certified by the chief financial officer or controller of the Parent
Guarantor.
(e) ANNUAL FORECASTS. As soon as available and in any event no
later than 45 days after the end of each Fiscal Year, forecasts
prepared by management of the Parent Guarantor, in form satisfactory to
the Administrative Agent, of balance sheets, income statements and cash
flow statements on a monthly basis for the Fiscal Year following such
Fiscal Year and on an annual basis for each Fiscal Year thereafter
until the Termination Date.
(f) LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type
described in Section 4.01(f), and promptly after the occurrence
thereof, notice of any adverse change in the status or the financial
effect on any Loan Party or any of its Subsidiaries of the Disclosed
Litigation from that described on Schedule 4.01(f) hereto.
(g) SECURITIES REPORTS. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special reports,
and all registration statements, that any Loan Party or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor, or with any
national securities exchange.
(h) CREDITOR REPORTS. Promptly after the furnishing thereof,
copies of any statement or report furnished to any holder of Debt
securities of any Loan Party or of any of its Subsidiaries pursuant to
the terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lender Parties pursuant to
any other clause of this Section 5.03.
77
(i) AGREEMENT NOTICES. Promptly upon receipt thereof, copies
of all notices, requests and other documents received by any Loan Party
or any of its Subsidiaries under or pursuant to any Related Document or
instrument, indenture, loan or credit or similar agreement regarding or
related to any breach or default by any party thereto or any other
event that could materially impair the value of the interests or the
rights of any Loan Party or otherwise have a Material Adverse Effect
and copies of any amendment, modification or waiver of any provision of
any Related Document or instrument, indenture, loan or credit or
similar agreement and, from time to time upon request by the
Administrative Agent, such information and reports regarding the
Related Documents and such instruments, indentures and loan and credit
and similar agreements as the Administrative Agent may reasonably
request.
(j) REVENUE AGENT REPORTS. Within 10 days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form
886), or other written proposals of the Internal Revenue Service, that
propose, determine or otherwise set forth positive adjustments to the
Federal income tax liability of the affiliated group (within the
meaning of Section 1504(a)(1) of the Internal Revenue Code) of which
the Parent Guarantor is a member aggregating $3,000,000 or more.
(k) TAX CERTIFICATES. Promptly, and in any event within five
Business Days after the due date (with extensions) for filing the final
Federal income tax return in respect of each taxable year, a
certificate (a "TAX CERTIFICATE"), signed by the President or the chief
financial officer or controller of the Parent Guarantor, stating that
the Parent Guarantor has paid to the Internal Revenue Service or other
taxing authority the full amount that the Parent Guarantor is required
to pay in respect of Federal income tax for such year.
(l) ERISA. (i) ERISA EVENTS AND ERISA REPORTS. (A) Promptly
and in any event within 10 days after any Loan Party or any ERISA
Affiliate knows or has reason to know that any ERISA Event has
occurred, a statement of the chief financial officer of the Parent
Guarantor describing such ERISA Event and the action, if any, that such
Loan Party or such ERISA Affiliate has taken and proposes to take with
respect thereto and (B) on the date any records, documents or other
information must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA, a copy of such records, documents
and information.
(ii) PLAN TERMINATIONS. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan.
(iii) MULTIEMPLOYER PLAN NOTICES. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or
any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
each notice concerning (A) the imposition of Withdrawal Liability by
any such Multiemployer Plan, (B) the reorganization or
78
termination, within the meaning of Title IV of ERISA, of any such
Multiemployer Plan or (C) the amount of liability incurred, or that may
be incurred, by such Loan Party or any ERISA Affiliate in connection
with any event described in clause (A) or (B).
(iv) PLAN ANNUAL REPORTS. Promptly and in any event within 30
days after the filing thereof with the Internal Revenue Service, copies
of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan.
(m) ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of
any noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could reasonably be
expected to have a Material Adverse Effect.
(n) REAL PROPERTY. As soon as available and in any event
within 60 days after the end of each Fiscal Year, a report
supplementing Schedules 4.01(v) and 4.01(w) hereto, including an
identification of all real and leased property disposed of by the
Parent Guarantor or any of its Subsidiaries during such Fiscal Year, a
list and description (including the street address, county or other
relevant jurisdiction, state, record owner, book value thereof, and in
the case of leases of property, lessor, lessee, expiration date and
annual rental cost thereof) of all real property acquired or leased
during such Fiscal Year and a description of such other changes in the
information included in such Schedules as may be necessary for such
Schedules to be accurate and complete.
(o) INSURANCE. As soon as available and in any event within 60
days after the end of each Fiscal Year, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for
each Loan Party and its Subsidiaries and containing such additional
information as any Agent, or any Lender Party through the
Administrative Agent, may reasonably specify.
(p) BORROWING BASE CERTIFICATE. On a daily basis, a Borrowing
Base Certificate certified by the chief financial officer, executive
vice president, controller, treasurer or assistant treasurer of the
Parent Guarantor.
(q) OTHER INFORMATION. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as
any Agent, or any Lender Party through the Administrative Agent, may
from time to time reasonably request.
SECTION 5.04. FINANCIAL COVENANTS. So long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Parent Guarantor will:
79
(a) INTEREST COVERAGE RATIO. Maintain at all times a Interest
Coverage Ratio of not less than the ratio set forth below for each
period set forth below:
==================================================================
Period Ratio
==================================================================
Fiscal Quarter ended July 31, 2000 (1.25:1.00)
------------------------------------------------------------------
Two Fiscal Quarters ended October 31, 2000 (0.80:1.00)
------------------------------------------------------------------
Three Fiscal Quarters ended January 31, 2001 (0.25:1.00)
------------------------------------------------------------------
Four Fiscal Quarters ended April 30, 2001 0.10:1.00
------------------------------------------------------------------
Four Fiscal Quarters ended July 31, 2001 1.00:1.00
------------------------------------------------------------------
Four Fiscal Quarters ended October 31, 2001 1.20:1.00
==================================================================
(b) MINIMUM EBITDA. Maintain at all times EBITDA of the Parent
Guarantor and its Subsidiaries not less than the amount set forth below
for each period set forth below:
====================================================================
Period Amount
====================================================================
Fiscal Quarter ended July 31, 2000 ($10,000,000)
--------------------------------------------------------------------
Two Fiscal Quarters ended October 31, 2000 ($12,000,000)
--------------------------------------------------------------------
Three Fiscal Quarters ended January 31, 2001 ($4,500,000)
--------------------------------------------------------------------
Four Fiscal Quarters ended April 30, 2001 $2,500,000
--------------------------------------------------------------------
Four Fiscal Quarters ended July 31, 2001 $10,000,000
--------------------------------------------------------------------
Four Fiscal Quarters ended October 31, 2001 $15,000,000
====================================================================
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) the Borrowers shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) the
Borrowers shall fail to pay any interest on any Advance, or any Loan
Party shall fail to make any other payment under any Loan Document, in
each case under this clause (ii) within five days after the same
becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made;
or
(c) the Parent Guarantor or any Borrower shall fail to perform
or observe any term, covenant or agreement contained in Section 2.14,
5.01(e), (f), (i), (j), (o) or (p), 5.02, 5.03 or 5.04; or
80
(d) any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in any Loan Document on its part
to be performed or observed if such failure shall remain unremedied for
20 days after the earlier of the date on which (A) a Responsible
Officer becomes aware of such failure or (B) written notice thereof
shall have been given to the Parent Guarantor by any Agent or any
Lender Party; or
(e) the Cases shall be dismissed, suspended or converted to a
case under Chapter 7 of the Bankruptcy Code or a trustee shall be
appointed in the Cases; or an application shall be filed by any Loan
Party for the approval of, or there shall arise any other claim having
priority senior to or PARI PASSU with the claims of the Administrative
Agent and the Lenders under the Loan Documents or any other claim
having priority over any or all administrative expenses of the kind
specified in Section 503(b) or 507(b) of the Bankruptcy Code (other
than the Carve-Out); or
(f) the Bankruptcy Court shall enter an order (i) granting
relief from the automatic stay applicable under Section 362 of the
Bankruptcy Code to any holder of any security interest in any assets in
excess of $500,000 individually or in the aggregate in excess of
$1,000,000 for any and all such holders other than as expressly
contemplated by the Interim Order or the Final Order or (ii) approving
any settlement or other stipulation with any creditor of any Loan Party
other than the Administrative Agent and the Lenders or otherwise
providing for payments as adequate protection or otherwise to such
creditor individually or in the aggregate in excess of $1,000,000 for
any and all such creditors; or
(g) any Loan Party shall make any payment (as adequate
protection or otherwise) on account of any claim arising or deemed to
have arisen prior to the Filing Date other than a payment or payments
which would not constitute a default under section 6.01(f)(ii) except
as expressly contemplated by the Interim Order or the Final Order; or
(h) any Loan Party or any of its Subsidiaries shall fail to
pay any principal of, premium or interest on or any other amount
payable in respect of any Debt arising on or after the Filing Date that
is outstanding in a principal amount of at least $2,500,000 either
individually or in the aggregate (but excluding Debt outstanding
hereunder) of such Loan Party or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to
81
prepay, redeem, purchase or defease such Debt shall be required to be
made, in each case prior to the stated maturity thereof; or
(i) any Loan Party or any of its Subsidiaries (other than such
Loan Party or such Subsidiary that is an Immaterial Subsidiary) shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against any Loan Party or any of its
Subsidiaries (other than such Loan Party, or such Subsidiary that is an
Immaterial Subsidiary) seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted
by it) that is being diligently contested by it in good faith, either
such proceeding shall remain undismissed or unstayed for a period of 30
days or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official
for, it or any substantial part of its property) shall occur; or any
Loan Party, or any of its Subsidiaries (other than such Loan Party, or
such Subsidiary that is an Immaterial Subsidiary) shall take any
corporate or other action to authorize any of the actions set forth
above in this subsection (f); or
(j) any judgments or orders, either individually or in the
aggregate, for the payment of money in excess of (i) $2,500,000 and,
with respect to Loan Parties that are not Non-Filing Subsidiaries,
$2,500,000 as an administrative expense of the kind specified in
Section 503(b) of the Bankruptcy Code, shall be rendered against any
Loan Party or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(k) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that is reasonably
likely to have a Material Adverse Effect, and there shall be any period
of 15 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(l) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(j) shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to it,
or any such Loan Party shall so state in writing; or
82
(m) any Collateral Document after delivery thereof pursuant to
Section 3.01 or 5.01(j) shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority
lien on and security interest in the Collateral purported to be covered
thereby; or
(n) Xxxxxxx XxXxxxxx shall at any time for any reason cease to
be active in the management of the Parent Guarantor; or
(o) a Change of Control shall occur; or
(p) any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the
ERISA Affiliates related to such ERISA Event) exceeds $7,500,000; or
(q) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and the ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds
$7,500,000 or requires payments exceeding $3,000,000 per annum; or
(r) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Loan Parties and
the ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over
the amounts contributed to such Multiemployer Plans for the plan years
of such Multiemployer Plans immediately preceding the plan year in
which such reorganization or termination occurs by an amount exceeding
$7,500,000; or
(s) The Bankruptcy Court shall enter an order amending,
supplementing, vacating or otherwise modifying the Interim Order or
Final Order (the parties acknowledging that the foregoing shall not
preclude the entry of any order of the Bankruptcy Court approving or
authorizing an amendment or modification of this Agreement permitted by
Section 9.01, which order shall be acceptable to the Required Lenders);
or
(t) The Bankruptcy Court shall enter an order appointing an
examiner with powers beyond the duty to investigate and report as set
forth in Section 1106(a)(3) and (4) of the Bankruptcy Code, in the
Cases; or
(u) Any Loan Party shall bring a motion in the Cases: (i) to
obtain working capital financing from any Person other than Lenders
under Section 364(d) of the
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Bankruptcy Code; or (ii) to obtain financing from any Person other than
the Lenders under Section 364(c) of the Bankruptcy Code (other than
with respect to a financing used, in whole or part, to repay in full
the Obligations); or (iii) to grant any Lien other than those permitted
under Section 5.02(a) upon or affecting any Collateral; or (iv) to use
cash Collateral of the Administrative Agent or Lenders under Section
363(c) of the Bankruptcy Code without the prior written consent of the
Lenders or Required Lenders (as provided in Section 9.01 except to pay
the Carve-Out); or (v) to recover from any portions of the Collateral
any costs or expenses of preserving or disposing of such Collateral
under Section 506(c) of the Bankruptcy Code; or (vi) to effect any
other action or actions adverse to the Administrative Agent or Lenders
or their rights and remedies hereunder or their interest in the
Collateral that would, individually or in the aggregate, have a
Material Adverse Effect; or
(v) The Bankruptcy Court shall enter an order granting relief
pursuant to Section 362(d) of the Bankruptcy Code other than as
permitted under Section 6.01(f)(i); or
(w) The entry of the Final Order shall not have occurred
within 30 days after the Filing Date; or
(x) Any challenge by any Loan Party to the validity of any
Loan Document or the applicability or enforceability of any Loan
Document or which seeks to void, avoid, limit, or otherwise adversely
affect the security interest created by or in any Loan Document or any
payment made pursuant thereto; or
(y) The determination of either Borrower, whether by vote of
such Borrower's board of directors or otherwise, to suspend the
operation of such Borrower's business in the ordinary course, liquidate
all or substantially all of such Borrower's assets, or employ an agent
or other third party to conduct any so-called "Going-Out-of Business"
sales, or the filing of a motion or other application in the Cases,
seeking authority to do any of the foregoing.
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers
(with a copy to counsel for any statutory committee of unsecured creditors'
appointed to the Cases and to the United States Trustee), declare the
Commitments of each Lender Party and the obligation of each Lender Party to make
Advances (other than Letter of Credit Advances by the Issuing Bank or a Lender
pursuant to Section 2.03(c) and Swing Line Advances by a Lender pursuant to
Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, (A) by notice to the
Borrowers, declare the Notes, all interest thereon and all other amounts payable
under this Agreement and the other Loan Documents to be forthwith due and
payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by each
Borrower, (B) by notice to each party
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required under the terms of any agreement in support of which a Standby Letter
of Credit is issued, request that all Obligations under such agreement be
declared to be due and payable and (C) by notice to the Issuing Bank, direct the
Issuing Bank to deliver a Default Termination Notice to the beneficiary of each
Standby Letter of Credit issued by it, and the Issuing Bank shall deliver such
Default Termination Notices; PROVIDED, HOWEVER, that in the event of an actual
or deemed entry of an order for relief with respect to any Borrower under the
Federal Bankruptcy Code (other than Loan Parties that are Non-Filing
Subsidiaries), (x) the Commitments of each Lender Party and the obligation of
each Lender Party to make Advances (other than Letter of Credit Advances by the
Issuing Bank or a Lender pursuant to Section 2.03(c) and Swing Line Advances by
a Lender pursuant to Section 2.02(b)) and of the Issuing Bank to issue Letters
of Credit shall automatically be terminated and (y) the Notes, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by each Borrower.
Upon the occurrence and during the continuance of an Event of
Default, the automatic stay provided in Section 362 of the Bankruptcy Code shall
be deemed automatically vacated and the Administrative Agent, on behalf of the
Lenders, shall, upon forty-eight business hours' (i.e., forty-eight hours
determined without counting Saturdays, Sundays or any other day on which the
Bankruptcy Court is not open) prior written notice (provided that unless such
notice is received no later than 12:00 noon Arizona time, any pursuit of
remedies shall not commence until the opening of business on the third Business
Day after such notice is received) to the Borrowers and any creditors' committee
appointed in the Cases pursuant to Section 1102 of the Bankruptcy Code, be
immediately permitted to, among other things, pursue any and all of its remedies
against any Loan Party or the Collateral and seek payment in respect of all
Obligations.
SECTION 6.02. ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON
DEFAULT. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrowers to, and forthwith upon such
demand the Borrowers will, pay to the Collateral Agent on behalf of the Lender
Parties in same day funds at the Collateral Agent's office designated in such
demand, for deposit in the L/C Cash Collateral Account, an amount equal to the
aggregate Available Amount of all Letters of Credit then outstanding. If at any
time the Administrative Agent or the Collateral Agent determines that any funds
held in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than the Agents and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrowers will, forthwith upon demand by the Administrative Agent or the
Collateral Agent, pay to the Collateral Agent, as additional funds to be
deposited and held in the L/C Cash Collateral Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the
Administrative Agent or the Collateral Agent, as the case may be, determines to
be free and clear of any such right and claim. Upon the drawing of any Letter of
Credit for which funds are on deposit in the L/C Cash Collateral Account, such
funds shall
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be applied to reimburse the Issuing Bank or Lenders, as applicable, to the
extent permitted by applicable law.
ARTICLE VII
PARENT GUARANTY
SECTION 7.01. GUARANTY. (a) The Parent Guarantor hereby
unconditionally and irrevocably guarantees the punctual payment when due,
whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all Obligations of each Loan Party now or
hereafter existing under the Loan Documents, (including, without limitation, any
extensions, modifications, substitutions, amendments or renewals of any or all
of the foregoing Obligations), whether direct or indirect, absolute or
contingent, and whether for principal, interest, fees, expenses or otherwise
(such Obligations being the "GUARANTEED OBLIGATIONS"), and agrees to pay any and
all expenses (including, without limitation, reasonable counsel fees and
expenses) incurred by the Administrative Agent or the Lender Parties in
enforcing any rights under this Guaranty or any other Loan Documents. Without
limiting the generality of the foregoing, the Parent Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by each Loan Party to the Administrative Agent or any Lender Party
under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any Loan Party.
(b) The Parent Guarantor hereby unconditionally and
irrevocably agrees that in the event any payment shall be required to be made to
the Administrative Agent or any Lender Party under this Guaranty or any other
guaranty, the Parent Guarantor will contribute, to the maximum extent permitted
by law, such amounts to each other guarantor so as to maximize the aggregate
amount paid to the Administrative Agent or any Lender Parties under or in
respect of the Loan Documents.
SECTION 7.02. GUARANTY ABSOLUTE. The Parent Guarantor
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Administrative Agent, the Administrative Agents or the Lenders
with respect thereto. The Obligations of the Parent Guarantor under this
Guaranty are independent of the Guaranteed Obligations or any other Obligations
of any Loan Party under the Loan Documents, and a separate action or actions may
be brought and prosecuted against the Parent Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against any Borrower or whether
any Borrower is joined in any such action or actions. The liability of the
Parent Guarantor under this Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and the Parent Guarantor hereby irrevocably
waives any defenses it may now or hereinafter have in any way relating to, any
or all of the following:
(a) any lack of validity or enforceability of any Loan
Document, the Interim Order, the Final Order or any agreement or
instrument relating thereto;
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(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations or any
other Obligations of any other Loan Party under the Loan Documents, or
any other amendment or waiver of or any consent to departure from any
Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional
credit to any Borrower, the Parent Guarantor or any of their
Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any collateral for all or any of the
Guaranteed Obligations or any other Obligations of any other Loan Party
under the Loan Documents or any other assets of any Borrower, the
Parent Guarantor or any of their Subsidiaries;
(e) any change, restructuring or termination of the corporate
or other legal structure or existence of any Borrower, the Parent
Guarantor or any of their Subsidiaries;
(f) any failure of the Administrative Agent or any Lender
Party to disclose to any Loan Party any information relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party now or hereafter known to the
Administrative Agent or any Lender Party (the Parent Guarantor waiving
any duty on the part of the Administrative Agent or any Lender Party to
disclose such information); or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Administrative Agent or any Lender Party that
might otherwise constitute a defense available to, or a discharge of,
any Borrower, the Parent Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any Lender Party
upon the insolvency, bankruptcy or reorganization of any Borrower, the Parent
Guarantor or any of their Subsidiaries or otherwise, all as though such payment
had not been made.
SECTION 7.03. WAIVER. (a) The Parent Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent or any Lender Party protect, secure, perfect or
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insure any Lien or any property subject thereto or exhaust any right or take any
action against any Loan Party or any other Person or any Collateral.
(b) The Parent Guarantor hereby unconditionally and
irrevocably waives any right to revoke this Guaranty and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.
(c) The Parent Guarantor hereby unconditionally and
irrevocably waives (i) any defense arising by reason of any claim or defense
based upon an election of remedies by the Administrative Agent or any Lender
Party that in any manner impairs, reduces, releases or otherwise adversely
affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of the Parent Guarantor or other rights of the Parent
Guarantor to proceed against any of the Loan Parties, any other guarantor or any
other Person or any Collateral and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the Obligations of the Parent
Guarantor hereunder.
(d) The Parent Guarantor acknowledges that the Administrative
Agent may, without notice to or demand upon the Parent Guarantor and without
affecting the liability of the Parent Guarantor under this Guaranty, foreclose
under any mortgage by nonjudicial sale, and the Parent Guarantor hereby waives
any defense to the recovery by the Administrative Agent and the other Lender
Parties against the Parent Guarantor of any deficiency after such nonjudicial
sale and any defense or benefits that may be afforded by applicable law.
(e) The Parent Guarantor hereby unconditionally and
irrevocably waives any duty on the part of the Administrative Agent or any
Lender Party to disclose to the Parent Guarantor any matter, fact or thing
relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Loan Party or any of its
Subsidiaries now or hereafter known by the Administrative Agent or any Lender
Party.
(f) The Parent Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in Section
7.02 and this Section 7.03 are knowingly made in contemplation of such benefits.
SECTION 7.04. PAYMENTS FREE AND CLEAR OF TAXES, ETC. (a) Any
and all payments made by the Parent Guarantor under or in respect of this
Guaranty or any other Loan Document shall be made, in accordance with Section
2.11, free and clear of and without deduction for any and all present or future
Taxes. If the Parent Guarantor shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to any Lender Party or the
Administrative Agent, (i) the sum payable by the Parent Guarantor by the Parent
Guarantor shall be increased as may be necessary so that after the Parent
Guarantor and the Administrative Agent have made all required deductions
(including deductions applicable to additional sums payable under this Section
7.04) such Lender Party or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Parent Guarantor shall make such deductions and
(iii) the
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Parent Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Parent Guarantor agrees to pay any
present or future Other Taxes that arise from any payment made under or in
respect of this Guaranty or any other Loan Document or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Guaranty and the other Loan Documents.
(c) The Parent Guarantor will indemnify each Lender Party and
the Agents for the full amount of Taxes or Other Taxes and for the full amount
of taxes of any kind imposed by any jurisdiction on amounts payable under this
Section 7.04, imposed on or paid by such Lender Party or Agent and any liability
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section) paid by such Lender Party or
any Agent (as the case may be) and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender Party or such Agent (as
the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes by
or on behalf of the Parent Guarantor, the Parent Guarantor shall furnish to the
Administrative Agent, at its address referred to in Section 9.02, the original
or a certified copy of a receipt evidencing such payment. In the case of any
payment hereunder by or on behalf of the Parent Guarantor through an account or
branch outside the United States or by or on behalf of the Parent Guarantor by a
payor that is not a United States person, if the Parent Guarantor determines
that no Taxes are payable in respect thereof, the Parent Guarantor shall
furnish, or shall cause such payor to furnish, to the Administrative Agent, at
such address, an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes. For purposes of subsections (d)
and (e) of this Section 5, the terms "UNITED STATES" and "UNITED STATES PERSON"
shall have the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Without prejudice to the survival of any other agreement
of the Parent Guarantor hereunder, the agreements and obligations of the Parent
Guarantor contained in Section 7.01(a) (with respect to enforcement expenses),
the last sentence of Section 7.02 and this Section 7.04 shall survive the
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty.
SECTION 7.05. CONTINUING GUARANTY; ASSIGNMENTS. This Guaranty
is a continuing guaranty and shall (a) remain in full force and effect until the
latest of (i) the cash payment in full of the Guaranteed Obligations and all
other amounts payable under this Guaranty, (ii) the Termination Date and (iii)
the latest date of expiration or termination of all Letters of Credit, (b) be
binding upon the Parent Guarantor, its successors and assigns and (c) inure to
the benefit of and be enforceable by the Lender Parties, the Administrative
Agent and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party may assign or otherwise
transfer all or any portion of its rights and obligations hereunder (including,
without limitation, all or any portion of its Commitment,
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the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 9.07. The Parent Guarantor shall not have the right to
assignment rights hereunder or any interest herein without the prior written
consent of the Administrative Agent.
SECTION 7.06. SUBROGATION. The Parent Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights that it may
now or hereafter acquire against any Borrower, any Loan Party or any other
insider guarantor that arise from the existence, payment, performance or
enforcement of the Parent Guarantor's Obligations under this Agreement or any
other Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Administrative Agent or any Lender
Party against any Borrower or any other insider guarantor or any Collateral,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from any Borrower, any Loan Party or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, unless
and until all of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall have been paid in full in cash, all Letters of Credit shall
have expired or been terminated and the Commitments shall have expired or
terminated. If any amount shall be paid to the Parent Guarantor in violation of
the preceding sentence at any time prior to the latest of (a) the payment in
full in cash of the Guaranteed Obligations and all other amounts payable under
this Guaranty, (b) the Termination Date and (c) the latest date of expiration or
termination of all Letters of Credit, such amount shall be received and held in
trust for the benefit of the Administrative Agent and the Lender Parties, shall
be segregated from other property and funds of the Parent Guarantor and shall
forthwith be paid to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) the Parent
Guarantor shall make payment to the Administrative Agent or any Lender Party of
all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall be paid in
full in cash, (iii) the Termination Date shall have occurred and (iv) all
Letters of Credit shall have been expired or been terminated, the Administrative
Agent and the Lender Parties will, at the Parent Guarantor's request and
expense, execute and deliver to the Parent Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to the Parent Guarantor of an interest in the
Guaranteed Obligations resulting from such payment by the Parent Guarantor.
SECTION 7.07. SUBORDINATION. The Parent Guarantor hereby
subordinates any and all debts, liabilities and other Obligations owed to the
Parent Guarantor by each Loan Party (the "SUBORDINATED OBLIGATIONS") to the
Guaranteed Obligations to the extent and in the manner hereinafter set forth in
this Section 7.07:
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(a) PROHIBITED PAYMENTS, ETC. Except during the continuance of
an Event of Default, the Parent Guarantor may receive regularly
scheduled payments from any Loan Party on account of the Subordinated
Obligations. After the occurrence and during the continuance of any
Event of Default, however, unless the Administrative Agent otherwise
agrees, the Parent Guarantor shall not demand, accept or take any
action to collect any payment on account of the Subordinated
Obligations.
(b) PRIOR PAYMENT OF GUARANTEED OBLIGATIONS. In these Cases
relating to any Loan Party, the Parent Guarantor agrees that the
Secured Parties shall be entitled to receive payment in full in cash of
all Guaranteed Obligations before the Parent Guarantor receives payment
of any Subordinated Obligations.
(c) TURN-OVER. After the occurrence and during the continuance
of any Event of Default, the Parent Guarantor shall, if the
Administrative Agent so requests, collect, enforce and receive payments
on account of the Subordinated Obligations as trustee for the Lender
Parties and deliver such payments to the Administrative Agent on
account of the Guaranteed Obligations, together with any necessary
endorsements or other instruments of transfer, but without reducing or
affecting in any manner the liability of the Parent Guarantor under the
other provisions of this Guaranty.
(d) ADMINISTRATIVE AGENT AUTHORIZATION. After the occurrence
and during the continuance of any Event of Default, the Administrative
Agent is authorized and empowered, in its discretion, (i) in the name
of the Parent Guarantor, to collect and enforce, and to submit claims
in respect of, Subordinated Obligations and to apply any amounts
received thereon to the Guaranteed Obligations (including any and all
Post Petition Interest), and (ii) to require the Parent Guarantor (A)
to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and (B) to pay any amounts received on such
obligations to the Administrative Agent for application to the
Guaranteed Obligations.
ARTICLE VIII
THE AGENTS
SECTION 8.01. AUTHORIZATION AND ACTION. Each Lender Party (in
its capacities as a Lender, the Swing Line Bank (if applicable), the Issuing
Bank (if applicable)) hereby appoints and authorizes each Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to such Agent by
the terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), no Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; PROVIDED, HOWEVER, that no Agent
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shall be required to take any action that exposes such Agent to personal
liability or that is contrary to this Agreement or applicable law. Each Agent
agrees to give to each Lender Party prompt notice of each notice given to it by
the Parent Guarantor or any Borrower pursuant to the terms of this Agreement.
SECTION 8.02. AGENTS' RELIANCE, ETC. Neither any Agent nor any
of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any
other Agent, such Agent has received notice from the Administrative Agent that
it has received and accepted such Assignment and Acceptance, in each case as
provided in Section 9.07; (b) may consult with legal counsel (including counsel
for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender Party and shall
not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03. CITIBANK AND AFFILIATES. With respect to its
Commitments, the Advances made by it and the Notes issued to it, Citibank shall
have the same rights and powers under the Loan Documents as any other Lender
Party and may exercise the same as though it were not an Agent; and the term
"Lender Party" or "Lender Parties" shall, unless otherwise expressly indicated,
include Citibank in its individual capacities. Citibank and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if
Citibank were not an Agent and without any duty to account therefor to the
Lender Parties.
SECTION 8.04. LENDER PARTY CREDIT DECISION. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent or
any other
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Lender Party and based on the financial statements referred to in Section 4.01
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 Party
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender Party and based on 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.
SECTION 8.05. INDEMNIFICATION. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrowers) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of the Loan Documents
or any action taken or omitted by such Agent under the Loan Documents; PROVIDED,
HOWEVER, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender Party
agrees to reimburse each Agent promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrowers under Section 9.04, to the extent that such Agent is
not promptly reimbursed for such costs and expenses by the Borrowers.
(b) Each Lender Party severally agrees to indemnify the
Issuing Bank (to the extent not promptly reimbursed by the Borrowers) from and
against such Lender Party's ratable share (determined as provided below) of any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Issuing
Bank in any way relating to or arising out of the Loan Documents or any action
taken or omitted by the Issuing Bank under the Loan Documents; PROVIDED,
HOWEVER, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Issuing Bank's gross
negligence or willful misconduct as found in a final, non-appealable judgment by
a court of competent jurisdiction. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Issuing Bank promptly upon demand for its
ratable share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrowers under Section 9.04, to the extent
that the Issuing Bank is not promptly reimbursed for such costs and expenses by
the Borrowers.
(c) For purposes of this Section 8.05, the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time and (iii) their respective Unused Working
Capital Commitments at such time; PROVIDED that the aggregate principal amount
of
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Swing Line Advances owing to the Swing Line Bank and of Letter of Credit
Advances owing to the Issuing Bank shall be considered to be owed to the Lenders
ratably in accordance with their respective Working Capital Commitments. The
failure of any Lender Party to reimburse any Agent or the Issuing Bank, as the
case may be, promptly upon demand for its ratable share of any amount required
to be paid by the Lender Parties to such Agent or the Issuing Bank, as the case
may be, as provided herein shall not relieve any other Lender Party of its
obligation hereunder to reimburse such Agent or the Issuing Bank, as the case
may be, for its ratable share of such amount, but no Lender Party shall be
responsible for the failure of any other Lender Party to reimburse such Agent or
the Issuing Bank, as the case may be, for such other Lender Party's ratable
share of such amount. Without prejudice to the survival of any other agreement
of any Lender Party hereunder, the agreement and obligations of each Lender
Party contained in this Section 8.05 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 8.06. SUCCESSOR AGENTS. Any Agent may resign at any
time by giving written notice thereof to the Lender Parties and the Borrowers
and may be removed at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lender Parties, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States or of any State thereof and
having a combined capital and surplus of at least $250,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent and, in
the case of a successor Collateral Agent, upon the execution and filing or
recording of such financing statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor Agent shall
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under the Loan Documents. If within 45 days
after written notice is given of the retiring Agent's resignation or removal
under this Section 8.06 no successor Agent shall have been appointed and shall
have accepted such appointment, then on such 45th day (i) the retiring Agent's
resignation or removal shall become effective, (ii) the retiring Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Agent under the Loan Documents until such time, if any, as the Required
Lenders appoint a successor Agent as provided above. After any retiring Agent's
resignation or removal hereunder as Agent shall have become effective, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 8.07. OTHER AGENTS. Each Lender Party hereby
acknowledges that any other Lender Party designated as any "Agent" on the
signature pages hereof has no responsibilities or liability hereunder other than
in its capacity as a Lender.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC. (a) No amendment or waiver of
any provision of this Agreement or the Notes or any other Loan Document, nor
consent to any departure by any Loan Party therefrom, shall in any event be
effective unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that (i) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders
(other than any Lender Party that is, at such time, a Defaulting Lender), do any
of the following at any time: (A) waive any of the conditions specified in
Section 3.01 or, in the case of the Initial Extension of Credit, Section 3.02,
(B) change the number of Lenders or the percentage of (1) the Commitments, (2)
the aggregate unpaid principal amount of the Advances or (3) the aggregate
Available Amount of outstanding Letters of Credit that, in each case, shall be
required for the Lenders or any of them to take any action hereunder, (C) reduce
or limit the obligations of the Parent Guarantor under Section 7.01 or of any
Subsidiary Guarantor under Section 1 of the Subsidiary Guaranty or otherwise
limit such Guarantor's liability with respect to the Obligations owing to the
Agents and the Lender Parties, (D) release all or substantially all of the
Collateral in any transaction or series of related transactions or permit the
creation, incurrence, assumption or existence of any Lien on all or
substantially all of the Collateral in any transaction or series of related
transactions to secure any Obligations other than Obligations owing to the
Secured Parties under the Loan Documents, (E) amend Section 2.13 or this Section
9.01, (F) increase the Commitments of the Lenders, (G) reduce the principal of,
or interest on, the Notes or any fees or other amounts payable hereunder, (H)
postpone any date scheduled for any payment of principal of, or interest on, the
Notes pursuant to Section 2.04 or 2.07 or any date fixed for payment of any fees
or other amounts payable hereunder, (I) limit the liability of any Loan Party
under any of the Loan Documents, (J) increase the percentages included in
clauses (a) or (b) of the definition of "Loan Value", (K) consent to any
amendment or modification of the Interim Order or the Final Order and (ii) no
amendment, waiver or consent shall, unless in writing and signed by Lenders
having 66 2/3% of the Working Capital Commitments at such time (other than any
Lender Party that is, at such time, a Defaulting Lender), do any of the
following at any time: (A) reduce the dollar amount of the liquidation reserve
included in clause (b) of the definition of "Loan Value", (B) decrease the
liquidity reserve set forth on the Borrowing Base Certificate, (C) reduce the
dollar amount set forth in Section 2.06(b)(ii) or 3.02(a)(iii)(A) or (D) waive
the condition specified in Section 3.02(a)(iii); PROVIDED FURTHER that no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Bank or the Issuing Bank, as the case may be, in addition to the Lenders
required above to take such action, affect the rights or obligations of the
Swing Line Bank or of the Issuing Bank, as the case may be, under this
Agreement; and PROVIDED FURTHER that no amendment, waiver or consent shall,
unless in writing and signed by
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an Agent in addition to the Lenders required above to take such action, affect
the rights or duties of such Agent under this Agreement or the other Loan
Documents.
(b) If, in connection with any proposed amendment or waiver of
any of the provisions of this Agreement or any other Loan Document as
contemplated by clauses (i) through (ix) of Section 9.01(a) above, the consent
of the Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is not obtained, then the Administrative Agent shall have
the right to purchase (and such Lender shall sell) the interest of each such
non-consenting Lender, together with accrued and unpaid interest, and assume
each such Lender's Commitment.
SECTION 9.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to the Parent Guarantor, the Borrowers or
any other Loan Party, at the address or the Parent Guarantor at 0000 Xxxxx
XxxxxXxx Xxx, Xxxxx, Xxxxxxx 00000, Attention: Chief Financial Officer, with a
copy to Corporate Counsel; if to any Initial Lender or the Initial Issuing Bank,
at its Domestic Lending Office specified opposite its name on Schedule I hereto;
if to any other Lender Party, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender Party; if to the
Collateral Agent, at its address at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Miles XxXxxxx; and if to the Administrative Agent, at its address at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Miles XxXxxxx; or, as to
the Parent Guarantor, any Borrower or the Administrative Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrowers and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to any
Agent pursuant to Article II, III or VII shall not be effective until received
by such Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof.
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of
any Lender Party or any Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS AND EXPENSES. (a) The Borrowers jointly
and severally agree to pay on demand (i) all reasonable costs and expenses of
each Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of the Loan Documents (including,
without limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing
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and recording fees and expenses and (B) the reasonable fees and expenses of
counsel for each Agent with respect thereto, with respect to advising such Agent
as to its rights and responsibilities, or the perfection, protection or
preservation of rights or interests, under the Loan Documents, with respect to
negotiations with any Loan Party or with other creditors of any Loan Party or
any of its Subsidiaries arising out of any Default or any events or
circumstances that may give rise to a Default and with respect to any review of
pleadings and documents related to the Cases, attendance at meetings related to
the Cases, general monitoring of the Cases and any subsequent Chapter 7 case,
and (ii) all costs and expenses of each Agent and each Lender Party in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent and each
Lender Party with respect thereto).
(b) The Borrowers jointly and severally agree to indemnify and
hold harmless each Agent, each Lender Party and each of their Affiliates and
their officers, directors, employees, agents and advisors (each, an "INDEMNIFIED
PARTY") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) (i) the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Transaction Documents or any of the transactions
contemplated thereby or (ii) the actual or alleged presence of Hazardous
Materials on any property of any Loan Party or any of its Subsidiaries or any
Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 9.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated by the Transaction
Documents are consummated. The Borrowers also agrees not to assert any claim
against any Agent, any Lender Party or any of their Affiliates, or any of their
respective officers, directors, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the Facilities, the actual or proposed use of
the proceeds of the Advances or the Letters of Credit, the Transaction Documents
or any of the transactions contemplated by the Transaction Documents.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrowers to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes
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pursuant to Section 6.01 or for any other reason, or if the Borrowers fail to
make any payment or prepayment of an Advance for which a notice of prepayment
has been given or that is otherwise required to be made, whether pursuant to
Section 2.04, 2.06 or 6.01 or otherwise, the Borrowers shall, upon demand by
such Lender Party (with a copy of such demand to the Administrative Agent), pay
to the Administrative Agent for the account of such Lender Party any amounts
required to compensate such Lender Party for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or such
failure to pay or prepay, as the case may be, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender Party to fund or maintain such
Advance.
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrowers contained in Sections 2.10 and 2.12 and this
Section 9.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05. RIGHT OF SET-OFF. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Agent and each Lender Party and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender Party
or such Affiliate to or for the credit or the account of the Parent Guarantor or
any Borrower against any and all of the Obligations of the Parent Guarantor or
the Borrowers now or hereafter existing under the Loan Documents, irrespective
of whether such Agent or such Lender Party shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be unmatured.
Each Agent and each Lender Party agrees promptly to notify the Parent Guarantor
or the applicable Borrower after any such set-off and application; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Agent and each Lender Party and
their respective Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Agent, such Lender Party and their respective Affiliates may have.
SECTION 9.06. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Borrowers, the Parent
Guarantor and each Agent and the Administrative Agent shall have been notified
by each Initial Lender and the Initial Issuing Bank that such Initial Lender and
the Initial Issuing Bank has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrowers, the Parent Guarantor, each Agent and
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each Lender Party and their respective successors and assigns, except that no
Borrower shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lender Parties.
SECTION 9.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender
may assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); PROVIDED, HOWEVER, that (i) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and obligations under
and in respect of all of the Facilities, (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement, the aggregate amount of the Commitments being assigned to such
Eligible Assignee pursuant to such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, (iii) each such assignment shall be to an Eligible
Assignee, (iv) no such assignments shall be permitted without the consent of the
Administrative Agent until the Administrative Agent shall have notified the
Lender Parties that syndication of the Commitments hereunder has been completed,
and (v) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
each Lender Party assignor thereunder and each assignee thereunder confirm to
and agree with each other and the other parties thereto and hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such assigning
Lender Party makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with any Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; (ii) such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan
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Party of any of its obligations under any Loan Document or any other instrument
or document furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon any Agent, such assigning Lender Party
or any other Lender Party and based on 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; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes each
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to such Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lender Parties and the Commitment under each Facility of, and
principal amount of the Advances owing under each Facility to, each Lender Party
from time to time (the "REGISTER"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agents and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by any Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers and each other Agent. In the case of any assignment by a Lender,
within five Business Days after its receipt of such notice, the Borrowers, at
their own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Note or Notes a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it under each
Facility pursuant to such Assignment and Acceptance and, if any assigning Lender
has retained a Commitment hereunder under such Facility, a new Note to the order
of such assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A hereto.
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(f) The Issuing Bank may assign to an Eligible Assignee all of
its rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; PROVIDED, HOWEVER, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more
Persons (other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); PROVIDED, HOWEVER, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrowers, the Agents and the other Lender
Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Parent Guarantor or the Borrowers
furnished to such Lender Party by or on behalf of the Borrowers; PROVIDED,
HOWEVER, that, prior to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree to preserve the confidentiality of
any Confidential Information received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
SECTION 9.08. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Manual delivery of an executed counterpart of a
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signature page to this Agreement by telecopier shall be effective as delivery of
an original executed counterpart of this Agreement.
SECTION 9.09. NO LIABILITY OF THE ISSUING BANK. The Borrowers
assume 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 of its 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; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrowers shall have a claim against the Issuing Bank, and the Issuing Bank
shall be liable to the Borrowers, to the extent of any direct, but not
consequential, damages suffered by the Borrowers that the Borrowers prove were
caused by (i) the Issuing Bank's willful misconduct or gross negligence as
determined in a final, non-appealable judgment by a court of competent
jurisdiction 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 9.10. RELEASE OF COLLATERAL. Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Loan Party in
accordance with the terms of the Loan Documents, the Collateral Agent will, at
the Borrowers' expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents.
SECTION 9.11. JURISDICTION, ETC. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Bankruptcy Court or of any New
York State court or federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any of the other Loan Documents
to which it is a party, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in the Bankruptcy Court or in any such New York State court or, to
the extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any
102
party may otherwise have to bring any action or proceeding relating to this
Agreement or any of the other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in the Bankruptcy Court or in any
New York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
SECTION 9.12. GOVERNING LAW. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York and, to the extent applicable, the Bankruptcy Code.
SECTION 9.13. WAIVER OF JURY TRIAL. Each of the Parent
Guarantor, the Borrowers, the Agents and the Lender Parties irrevocably waives
all right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to any of the
Loan Documents, the Advances or the actions of any Agent or any Lender Party in
the negotiation, administration, performance or enforcement thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
MICROAGE TECHNOLOGY SERVICES, L.L.C.,
as Borrower
By /s/ Xxx X. Xxxxxx
------------------------------------
Title: VP, CFO & Treasurer
PINACOR, INC.,
as Borrower
By /s/ Xxx X. Xxxxxx
------------------------------------
Title: VP, CFO & Treasurer
MICROAGE, INC.,
as Parent Guarantor
By /s/ Xxx X. Xxxxxx
------------------------------------
Title: VP, CFO & Treasurer
CITIBANK, N.A.,
as Administrative Agent
By /s/ Miles X. XxXxxxx
------------------------------------
Title: Vice President
CITIBANK, N.A.,
as Collateral Agent
By /s/ Miles X. XxXxxxx
------------------------------------
Title: Vice President
104
INITIAL LENDERS
CITIBANK, N.A.
By /s/ Miles X. XxXxxxx
------------------------------------
Title: Vice President
INITIAL ISSUING BANK
CITIBANK, N.A.
By /s/ Miles X. XxXxxxx
------------------------------------
Title: Vice President
SWING LINE BANK
CITIBANK, N.A.
By /s/ Miles X. XxXxxxx
------------------------------------
Title: Vice President
105
