$50,000,000
CREDIT AGREEMENT
dated as of
January 24, 1997
among
SOUTHERN ELECTRONICS CORPORATION
AND
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.,
as Borrowers,
WACHOVIA BANK OF GEORGIA, N.A.
and
NATIONAL CITY BANK OF COLUMBUS,
as Banks,
and
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent
TABLE OF CONTENTS
CREDIT AGREEMENT
ARTICLE I
DEFINITIONS . . . . . . . . . . . . 1
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms and Determinations. . . . . . . 19
SECTION 1.03. References . . . . . . . . . . . . . . . . . . . 19
SECTION 1.04. Use of Defined Terms . . . . . . . . . . . . . . 20
SECTION 1.05. Terminology. . . . . . . . . . . . . . . . . . . 20
ARTICLE II
THE CREDITS . . . . . . . . . . . . 20
SECTION 2.01. Commitments to Lend Syndicated Loans . . . . . . 20
SECTION 2.02. Method of Borrowing. . . . . . . . . . . . . . . 22
SECTION 2.03. Notes. . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.04. Maturity of Loans. . . . . . . . . . . . . . . . 25
SECTION 2.05. Interest Rates . . . . . . . . . . . . . . . . . 25
SECTION 2.06. Fees . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.07. Optional Termination or Reduction of
Commitments. . . . . . . . . . . . . . . . . . . 27
SECTION 2.08. Mandatory Termination of Commitments . . . . . . 27
SECTION 2.09. Optional Prepayments . . . . . . . . . . . . . . 27
SECTION 2.10. Mandatory Prepayments. . . . . . . . . . . . . . 28
SECTION 2.12. General Provisions as to Payments. . . . . . . . 28
SECTION 2.13. Computation of Interest and Fees . . . . . . . . 30
ARTICLE III
LETTER OF CREDIT FACILITY. . . . . . . . . 31
SECTION 3.01. Obligation to Issue. . . . . . . . . . . . . . . 31
SECTION 3.02. Types and Amounts. . . . . . . . . . . . . . . . 31
SECTION 3.03. Conditions . . . . . . . . . . . . . . . . . . . 31
SECTION 3.04. Issuance of Letters of Credit. . . . . . . . . . 32
(a) Request for Issuance . . . . . . . . . . . . 32
(b) Issuance; Notice of Issuance . . . . . . . . 32
(c) No Extension or Amendment. . . . . . . . . . 33
SECTION 3.05. Reimbursement Obligations; Duties of the
Issuing Bank . . . . . . . . . . . . . . . . . . 33
(a) Reimbursement. . . . . . . . . . . . . . . 33
(b) Duties of the Agent. . . . . . . . . . . . . 33
SECTION 3.06. Participations . . . . . . . . . . . . . . . . . 34
(a) Purchase of Participations . . . . . . . . . 34
(b) Sharing of Letter of Credit Payments . . . . 34
(c) Sharing of Reimbursement Obligation Payments 35
(d) Documentation. . . . . . . . . . . . . . . . 35
(e) Obligations Irrevocable. . . . . . . . . . . 35
SECTION 3.07. Payment of Reimbursement Obligations . . . . . . 36
(a) Payments to Issuing Bank . . . . . . . . . . 36
(b) Recovery or Avoidance of Payments. . . . . 37
SECTION 3.08. Compensation for Letters of Credit and Agent
Reporting Requirements . . . . . . . . . . . . . 37
(a) Letter of Credit Fees and Fronting Fees. . 37
(b) Agent Charges. . . . . . . . . . . . . . . 37
SECTION 3.09. Indemnification; Exoneration . . . . . . . . . . 38
(a) Indemnification. . . . . . . . . . . . . . 38
(b) Assumption of Risk by Borrowers. . . . . . 38
(c) Exoneration. . . . . . . . . . . . . . . . 38
SECTION 3.10. Credit Yield Protection; Capital Adequacy. . . . 39
ARTICLE IV
CONDITIONS TO BORROWINGS. . . . . . . . . 41
SECTION 4.01. Conditions to First Borrowing. . . . . . . . . . 41
SECTION 4.02. Conditions to All Borrowings . . . . . . . . . . 43
ARTICLE V
REPRESENTATIONS AND WARRANTIES . . . . . . . 43
SECTION 5.01. Corporate Existence and Power. . . . . . . . . . 43
SECTION 5.02. Corporate and Governmental Authorization; No
Contravention. . . . . . . . . . . . . . . . . . 44
SECTION 5.03. Binding Effect . . . . . . . . . . . . . . . . . 44
SECTION 5.04. Financial Information. . . . . . . . . . . . . . 44
SECTION 5.05. No Litigation. . . . . . . . . . . . . . . . . . 44
SECTION 5.06. Compliance with ERISA. . . . . . . . . . . . . . 45
SECTION 5.07. Compliance with Laws; Payment of Taxes . . . . . 45
SECTION 5.08. Subsidiaries . . . . . . . . . . . . . . . . . . 45
SECTION 5.09. Investment Company Act . . . . . . . . . . . . . 46
SECTION 5.10. Public Utility Holding Company Act . . . . . . . 46
SECTION 5.11. Ownership of Property; Liens . . . . . . . . . . 46
SECTION 5.12. No Default . . . . . . . . . . . . . . . . . . . 46
SECTION 5.13. Full Disclosure. . . . . . . . . . . . . . . . . 46
SECTION 5.14. Environmental Matters. . . . . . . . . . . . . . 46
SECTION 5.15. Capital Stock. . . . . . . . . . . . . . . . . . 47
SECTION 5.16. Margin Stock . . . . . . . . . . . . . . . . . . 47
SECTION 5.17. Insolvency . . . . . . . . . . . . . . . . . . . 47
SECTION 5.18. Insurance. . . . . . . . . . . . . . . . . . . . 48
SECTION 5.19. Accounts Receivable. . . . . . . . . . . . . . . 48
SECTION 5.20. Inventory. . . . . . . . . . . . . . . . . . . . 48
ARTICLE VI
COVENANTS. . . . . . . . . . . . . 48
SECTION 6.01. Information. . . . . . . . . . . . . . . . . . . 49
SECTION 6.02. Inspection of Property, Books and Records. . . . 51
SECTION 6.03. Maintenance of Existence and Management. . . . . 51
SECTION 6.04. Dissolution. . . . . . . . . . . . . . . . . . . 52
SECTION 6.05. Consolidations, Mergers and Sales of Assets. . . 52
SECTION 6.06. Use of Proceeds. . . . . . . . . . . . . . . . . 52
SECTION 6.07. Compliance with Laws; Payment of Taxes . . . . . 53
SECTION 6.08. Insurance. . . . . . . . . . . . . . . . . . . . 53
SECTION 6.09. Change in Fiscal Year. . . . . . . . . . . . . . 53
SECTION 6.10. Maintenance of Property. . . . . . . . . . . . . 53
SECTION 6.11. Environmental Notices. . . . . . . . . . . . . . 53
SECTION 6.12. Environmental Matters. . . . . . . . . . . . . . 54
SECTION 6.13. Environmental Release. . . . . . . . . . . . . . 54
SECTION 6.14. Transactions with Affiliates . . . . . . . . . . 54
SECTION 6.15. Restricted Payments. . . . . . . . . . . . . . . 54
SECTION 6.16. Loans or Advances. . . . . . . . . . . . . . . . 54
SECTION 6.17. Investments. . . . . . . . . . . . . . . . . . . 55
SECTION 6.18. Priority Debt. . . . . . . . . . . . . . . . . . 55
SECTION 6.19. Restrictions on Ability of Subsidiaries to Pay
Dividends. . . . . . . . . . . . . . . . . . . . 56
SECTION 6.20. Leverage Ratio . . . . . . . . . . . . . . . . . 56
SECTION 6.21. Fixed Charges Coverage . . . . . . . . . . . . . 57
SECTION 6.22. Adjusted Current Ratio . . . . . . . . . . . . . 57
SECTION 6.23. Minimum Consolidated Net Income. . . . . . . . . 57
SECTION 6.24. Minimum Consolidated Tangible Net Worth. . . . . 57
SECTION 6.25. Distributor Agreements . . . . . . . . . . . . . 58
SECTION 6.26. Accounts Receivable. . . . . . . . . . . . . . . 58
SECTION 6.27. Inventory. . . . . . . . . . . . . . . . . . . . 58
SECTION 6.28. Additional Debt . . . . . . . . . . . . . . . . 59
ARTICLE VII
DEFAULTS. . . . . . . . . . . . . 59
SECTION 7.01. Events of Default. . . . . . . . . . . . . . . . 59
SECTION 7.02. Notice of Default. . . . . . . . . . . . . . . . 63
ARTICLE VIII
THE AGENT. . . . . . . . . . . . . 63
SECTION 8.01. Appointment; Powers and Immunities . . . . . . . 63
SECTION 8.02. Reliance by Agent. . . . . . . . . . . . . . . . 64
SECTION 8.03. Defaults . . . . . . . . . . . . . . . . . . . . 64
SECTION 8.04. Rights of Agent and its Affiliates as a Bank . . 64
SECTION 8.05. Indemnification. . . . . . . . . . . . . . . . . 65
SECTION 8.06 Consequential Damages. . . . . . . . . . . . . . 65
SECTION 8.07. Payee of Note Treated as Owner . . . . . . . . . 65
SECTION 8.08. Nonreliance on Agent and Other Banks . . . . . . 66
SECTION 8.09. Failure to Act . . . . . . . . . . . . . . . . . 66
SECTION 8.10. Resignation or Removal of Agent. . . . . . . . . 66
ARTICLE IX
CHANGE IN CIRCUMSTANCES; COMPENSATION. . . . . . 67
SECTION 9.01. Basis for Determining Interest Rate Inadequate
or Unfair. . . . . . . . . . . . . . . . . . . . 67
SECTION 9.02. Illegality . . . . . . . . . . . . . . . . . . . 67
SECTION 9.03. Increased Cost and Reduced Return. . . . . . . . 68
SECTION 9.04. Base Rate Loans or Other Fixed Rate Loans
Substituted for Affected Fixed Rate Loans. . . . 69
SECTION 9.05. Compensation . . . . . . . . . . . . . . . . . . 70
ARTICLE X
MISCELLANEOUS. . . . . . . . . . . . 71
SECTION 10.01. Notices . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.02. No Waivers. . . . . . . . . . . . . . . . . . . 71
SECTION 10.03. Expenses; Documentary Taxes . . . . . . . . . . 71
SECTION 10.04. Indemnification . . . . . . . . . . . . . . . . 72
SECTION 10.05. Setoff; Sharing of Setoffs. . . . . . . . . . . 72
SECTION 10.06. Amendments and Waivers. . . . . . . . . . . . . 73
SECTION 10.07. No Margin Stock Collateral. . . . . . . . . . . 74
SECTION 10.08. Successors and Assigns. . . . . . . . . . . . . 74
SECTION 10.09. Confidentiality . . . . . . . . . . . . . . . . 77
SECTION 10.10. Representation by Banks . . . . . . . . . . . . 77
SECTION 10.11. Obligations Several . . . . . . . . . . . . . . 77
SECTION 10.12. Georgia Law . . . . . . . . . . . . . . . . . . 78
SECTION 10.13. Severability. . . . . . . . . . . . . . . . . . 78
SECTION 10.14. Interest. . . . . . . . . . . . . . . . . . . . 78
SECTION 10.15. Interpretation. . . . . . . . . . . . . . . . . 79
SECTION 10.16. Waiver of Jury Trial; Consent to
Jurisdiction. . . . . . . . . . . . . . . . . . 79
SECTION 10.17. Counterparts. . . . . . . . . . . . . . . . . . 80
SECTION 10.18. Source of Funds -- ERISA. . . . . . . . . . . . 80
EXHIBIT A-1 Form of Syndicated Loan Note
EXHIBIT A-2 Form of Swing Loan Note
EXHIBIT B Form of Opinion of Special Counsel for the
Borrowers
EXHIBIT C Form of Opinion of Special Counsel for the
Agent
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F Form of Borrowing Base Certificate
EXHIBIT G Form of Notice of Letter of Credit
EXHIBIT H Form of Compliance Certificate
EXHIBIT I Form of Closing Certificate
EXHIBIT J Form of Officer's Certificate
Schedule 5.08 Subsidiaries
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of January 24, 1997 among
SOUTHERN ELECTRONICS CORPORATION, SOUTHERN ELECTRONICS
DISTRIBUTORS, INC., the BANKS listed on the signature pages
hereof and WACHOVIA BANK OF GEORGIA, N.A., as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in
this Section 1.01 shall, for all purposes of this Agreement and
any amendment hereto (except as herein otherwise expressly
provided or unless the context otherwise requires), have the
meanings set forth herein:
"Account Debtor" means the person who is obligated
on any of the Accounts Receivable or otherwise is obligated as a
purchaser or lessee of any of the Inventory.
"Accounts Receivable" means all rights of either
Borrower to payment for goods sold or leased, or to be sold or to
be leased, or for services rendered or to be rendered, howsoever
evidenced or incurred, including, without limitation, all
accounts, instruments, chattel paper and general intangibles, all
returned or repossessed goods and all books, records, computer
tapes, programs and ledger books arising therefrom or relating
thereto, whether now owned or hereafter acquired or arising.
"Adjusted Current Ratio" means the ratio of: (i)
the sum of (x) the aggregate Accounts Receivable of the Borrowers
plus (y) the aggregate Inventory of the Borrowers; to (ii) the
sum of (x) the Aggregate Principal Amount Outstanding plus (y)
the aggregate amount of all accounts payable of the Borrowers.
"Adjusted London Interbank Offered Rate" has the
meaning set forth in Section 2.05(d).
"Affiliate" of any relevant Person means (i) any
Person that directly, or indirectly through one or more
intermediaries, controls the relevant Person (a "Controlling
Person"), (ii) any Person (other than the relevant Person or a
Subsidiary of the relevant Person) which is controlled by or is
under common control with a Controlling Person, or (iii) any
Person (other than a Subsidiary of the relevant Person) of which
the relevant Person owns, directly or indirectly, 20% or more of
the common stock or equivalent equity interests. As used herein,
the term "control" means possession, directly or indirectly, of
the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" means Wachovia Bank of Georgia, N.A., a
national banking association organized under the laws of the
United States of America, in its capacity as agent for the Banks
hereunder, and its successors and permitted assigns in such
capacity.
"Agent's Letter Agreement" means the letter
agreement dated December 9, 1996 between the Agent and SEC.
"Agreement" means this Credit Agreement, together
with all amendments and supplements hereto.
"Aggregate Commitments" means, at any time, the
aggregate amount of Commitments of all of the Banks.
"Aggregate Principal Amount Outstanding" means, at
any time, the sum of (i) the aggregate outstanding principal
amount of the Syndicated Loans to both Borrowers, (ii) the
aggregate outstanding principal amount of the Swing Loans to both
Borrowers and (iii) the aggregate outstanding principal amount of
the Letter of Credit Obligations with respect to both Borrowers.
"Aggregate Unused Commitments" means at any date,
an amount equal to the Aggregate Commitments less the Aggregate
Principal Amount Outstanding (but without giving effect to any
outstanding Swing Loans).
"Applicable Margin" has the meaning set forth in
Section 2.05(a).
"Assignee" has the meaning set forth in Section
10.08(c).
"Assignment and Acceptance" means an Assignment and
Acceptance executed in accordance with Section 10.08(c) in the
form attached hereto as Exhibit D.
"Assignment of Claims Acts" means The Assignment of
Claims Act of 1940, as may be amended from time to time, and any
Federal, State, county or municipal statute, regulation,
ordinance, constitution or charter, now or hereafter existing,
similar in effect thereto, as determined by the Agent in its sole
discretion.
"Authority" has the meaning set forth in Section
9.02.
"Bank" means each bank listed on the signature
pages hereof as having a Commitment, and its successors and
assigns.
"Base Rate" means for any Base Rate Loan for any
day, the rate per annum equal to the higher as of such day of (i)
the Prime Rate, or (ii) one-half of one percent above the Federal
Funds Rate. For purposes of determining the Base Rate for any
day, changes in the Prime Rate or the Federal Funds Rate shall be
effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to
bear interest at a rate based upon the Base Rate, and is to be
made as a Base Rate Loan pursuant to the applicable Notice of
Borrowing, Section 2.02(f), or Article IX, as applicable.
"Borrower" means, both individually and
collectively, as the context shall require, SEC and SED, and
their respective successors and permitted assigns, as joint and
several primary obligors with respect to the principal of and
interest on all Loans and Letter of Credit Obligations, all yield
protection, compensation and indemnification obligations, and all
fees, costs, expenses and other amounts payable hereunder.
"Borrowing" means a borrowing hereunder consisting
of Loans made to either Borrower (i) at the same time by all of
the Banks, in the case of a Syndicated Borrowing, or (ii)
separately by Wachovia, in the case of a Swing Borrowing, in each
case pursuant to Article II. A Borrowing is a "Syndicated
Borrowing" if such Loans are made pursuant to Section 2.01(a) or
a "Swing Borrowing" if such Loans are made pursuant to Section
2.01(b). A Borrowing is a "Base Rate Borrowing" if such Loans
are Base Rate Loans, an "Offered Rate Borrowing" if such Loans
are Offered Rate Loans or a "Euro-Dollar Borrowing" if such Loans
are Euro-Dollar Loans.
"Borrowing Base" means a sum determined by adding:
(I) an amount equal to 75% (or such other percentage which Lender
shall establish by written notice to the Borrowers in its
reasonable good faith discretion) of the face dollar amount of
Eligible Accounts as at the date of determination; to (ii) an
amount equal to 40% (or such other percentage which the Agent
shall establish by written notice to the Borrowers in its
reasonable good faith discretion) of the dollar amount of the
Eligible Inventory, valued at the lower of its cost or market
value, as at the date of determination.
"Borrowing Base Certificate" has the meaning given
it in Section 2.02(a).
"Capital Stock" means any nonredeemable capital
stock of either Borrower or any Consolidated Subsidiary (to the
extent issued to a Person other than such Borrower), whether
common or preferred.
"CERCLA" means the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C. Paragraph
9601 et. seq. and its implementing regulations and amendments.
"CERCLIS" means the Comprehensive Environmental
Response Compensation and Liability Inventory System established
pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in
Section 9.02.
"Closing Certificate" has the meaning set forth in
Section 4.01(e).
"Closing Date" means January 24, 1997.
"Code" means the Internal Revenue Code of 1986, as
amended, or any successor Federal tax code.
"Commitment" means, with respect to each Bank, (i)
the amount set forth opposite the name of such Bank on the
signature pages hereof, and (ii)as to any Bank which enters into
any Assignment and Acceptance (whether as transferor Bank or as
Assignee thereunder), the amount of such Bank's Commitment after
giving effect to such Assignment and Acceptance, in each case as
such amount may be reduced from time to time pursuant to Sections
2.07 and 2.09.
"Compliance Certificate" has the meaning set forth
in Section 6.01(c).
"Consolidated Debt" means at any date the Debt of
the Borrowers and the Consolidated Subsidiaries, determined on a
consolidated basis as of such date.
"Consolidated Fixed Charges" for any period means
the sum of (i) Consolidated Interest Expense for such period, and
(ii) all payment obligations of the Borrowers and the
Consolidated Subsidiaries for such period under all operating
leases and rental agreements, (iii) Current Maturities of
Long-Term Debt and (iv) capital expenditures incurred during such
period.
"Consolidated Interest Expense" for any period
means interest, whether expensed or capitalized, in respect of
Debt of the Borrowers or any of its Consolidated Subsidiaries
outstanding during such period.
"Consolidated Liabilities" means the sum of (i) all
liabilities that, in accordance with GAAP, should be classified
as liabilities on a consolidated balance sheet of the Borrowers
and the Consolidated Subsidiaries, and (ii) to the extent not
included in clause (i) of this definition, all Redeemable
Preferred Stock.
"Consolidated Net Income" means, for any period,
the Net Income of the Borrowers and the Consolidated Subsidiaries
determined on a consolidated basis, but excluding (i)
extraordinary items and (ii) any equity interests of the
Borrowers or any Subsidiary in the unremitted earnings of any
Person that is not a Subsidiary.
"Consolidated Operating Profits" means, for any
period, the Operating Profits of the Borrowers and the
Consolidated Subsidiaries.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which, in accordance
with GAAP, would be consolidated with those of either Borrower in
its consolidated financial statements as of such date.
"Consolidated Tangible Net Worth" means, at any
time, Stockholders' Equity, less the sum of the value, as set
forth or reflected on the most recent consolidated balance sheet
of the Borrowers and the Consolidated Subsidiaries, prepared in
accordance with GAAP, of:
(A) Any surplus resulting from any write-up
of assets subsequent to September 30, 1996;
(B) All assets which would be treated as
intangible assets for balance sheet presentation purposes under
GAAP, including without limitation goodwill (whether representing
the excess of cost over book value of assets acquired, or
otherwise), trademarks, tradenames, copyrights, patents and
technologies, and unamortized debt discount and expense;
(C) To the extent not included in (B) of this
definition, any amount at which shares of Capital Stock of the
Borrowers appear as an asset on the balance sheet of the
Borrowers and the Consolidated Subsidiaries;
(D) Loans or advances to stockholders,
directors, officers or employees; and
(E) To the extent not included in (B) of this
definition, deferred expenses.
"Consolidated Total Assets" means, at any time, the
total assets of the Borrowers and the Consolidated Subsidiaries,
determined on a consolidated basis, as set forth or reflected on
the most recent consolidated balance sheet of the Borrowers and
the Consolidated Subsidiaries, prepared in accordance with GAAP.
"Controlled Group" means all members of a
controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which,
together with either Borrower, are treated as a single employer
under Section 414 of the Code.
"Current Maturities of Long-Term Debt" means all
payments in respect of Long-Term Debt (other than Debt under this
Agreement) that are required to be made within one year from the
date of determination, whether or not the obligation to make such
payments would constitute a current liability of the obligor
under GAAP.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such
Person as lessee under capital leases, (v) all obligations of
such Person to reimburse any bank or other Person in respect of
amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a
corporation), (vii) all obligations of such Person to reimburse
any bank or other Person in respect of amounts paid or to be paid
or to be paid under a letter of credit or similar instrument,
(viii) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, (ix)
all obligations of such Person with respect to interest rate
protection agreements, foreign currency exchange agreements or
other hedging arrangements (valued as the termination value
thereof computed in accordance with a method approved by the
International Swap Dealers Association and agreed to by such
Person in the applicable hedging agreement, if any), and (x) all
Debt of others Guaranteed by such Person.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Default Rate" means, with respect to any Loan, on
any day, the sum of 2% plus the then highest interest rate
(including the Applicable Margin) which may be applicable to any
Loans hereunder (irrespective of whether any such type of Loans
are actually outstanding hereunder).
"Distributor Agreements" means any one, or more or
all, as the context shall require, of (i) the Distribution
Agreement (Domestic and Latin America) dated as of August, 1993,
between Maxtor Corporation and SED, (ii) the Commercial
Distributor Agreement dated August 30, 1996, between Seagate
Technology, Inc. and SED, (iii) the HP (US) Agreement, (iv) the
Distributor Contract dated December 11, 1995 between
Hewlett-Packard Company and SED (sub nom. USC Acquisition
Corporation) and (v) any other agreement between a manufacturer
or producer of electronics hardware or software and either of the
Borrowers pursuant to which such Borrower purchases electronics
hardware or software and acts as the distributor for the
manufacturer or producer thereof, in each case as any of the
foregoing may be extended, renewed, amended, supplemented or
replaced from time to time.
"Dollars" or "$" means dollars in lawful currency
of the United States of America.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
Georgia are authorized by law to close.
"Eligible Accounts" means that portion of the
Accounts Receivable consisting of accounts actually owing to
either Borrower by its Account Debtors subject to no
counterclaim, defense, setoff or deduction, excluding, however,
any account: (i) with respect to which any portion thereof is
more than 60 days past due or 90 days past invoice date; (ii)
which is owing by any Account Debtor affiliated with either
Borrower or with any of its shareholders, directors or officers,
as determined by the Agent in its sole discretion; (iii) which is
owing by any Account Debtor having 50% or more in face value of
its then existing accounts with either Borrower ineligible
hereunder; (iv) the assignment of which is subject to any
requirements set forth in any Assignment of Claims Acts, unless
such requirements have been satisfied in all respects; (v) which
is owing by any Account Debtor whose accounts, in face amount,
with either Borrower exceed 10% of such Borrower's total
accounts, but only to the extent of such excess; (vi) which is
owing by an Account Debtor located outside the United States,
unless it is (x) secured by an irrevocable letter of credit,
which letter of credit shall have been confirmed by a financial
institution acceptable to the Agent and shall be in form and
substance acceptable to the Agent and pledged to the Agent, and
(y) payable in full in United States dollars; (vii) is subject to
a Lien under any of the Distributor Agreements or otherwise
and/or (viii) which has otherwise been excluded by the Agent,
which it reserves the right to do, in its reasonable credit
judgment, for purposes hereof.
"Eligible Inventory" means that portion of the
Inventory consisting of inventory located in the United States of
America and in the possession and control of either Borrower
which (i) was the subject of an invoice to such Borrower from the
seller thereof dated not more than 90 days prior to the date of
determination, (ii) was manufactured not more than 365 days prior
to the date of determination, (iii) is not subject to a Lien
under any of the Distributor Agreements or otherwise and (iv) has
not been excluded by the Agent, which it reserves the right to
do, in its reasonable credit judgment, for purposes hereof.
"Environmental Authority" means any foreign,
federal, state, local or regional government that exercises any
form of jurisdiction or authority under any Environmental
Requirement.
"Environmental Authorizations" means all licenses,
permits, orders, approvals, notices, registrations or other legal
prerequisites for conducting the business of either Borrower or
any Subsidiary required by any Environmental Requirement.
"Environmental Judgments and Orders" means all
judgments, decrees or orders arising from or in any way
associated with any Environmental Requirements, whether or not
entered upon consent, or written agreements with an Environmental
Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated
in a judgment, decree or order.
"Environmental Liabilities" means any liabilities,
whether accrued, contingent or otherwise, arising from and in any
way associated with any Environmental Requirements.
"Environmental Notices" means notice from any
Environmental Authority or by any other person or entity, of
possible or alleged noncompliance with or liability under any
Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental
Authority or from any other person or entity for correction of
any violation of any Environmental Requirement or any
investigations concerning any violation of any Environmental
Requirement.
"Environmental Proceedings" means any judicial or
administrative proceedings arising from or in any way associated
with any Environmental Requirement.
"Environmental Releases" means releases as defined
in CERCLA or under any applicable state or local environmental
law or regulation.
"Environmental Requirements" means any legal
requirement relating to health, safety or the environment and
applicable to either Borrower, any Subsidiary or the Properties,
including but not limited to any such requirement under CERCLA or
similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, or any
successor law. Any reference to any provision of ERISA shall
also be deemed to be a reference to any successor provision or
provisions thereof.
"Euro-Dollar Business Day" means any Domestic
Business Day on which dealings in Dollar deposits are carried out
in the London interbank market.
"Euro-Dollar Loan" means a Loan which bears or is
to bear interest at a rate based upon the London Interbank
Offered Rate and to be made as a Euro-Dollar Loan pursuant to the
applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning
set forth in Section 2.05(d).
"Event of Default" has the meaning set forth in
Section 7.01.
"Existing Letters of Credit" means, individually or
collectively, as the context shall require, the letters of credit
issued by Wachovia for the account of SED described below:
L/C No. Issue Date Face Amount Beneficiary
870073721 8/12/96 $1,000,000 Acer America Corporation
870074193 8/26/96 $ 200,000 Sharp Electronics Corporation
"Federal Funds Rate" means, for any day, the rate per
annum (rounded upward, if necessary, to the next higher 1/100th
of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the
day for which such rate is to be determined is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day,
and (ii) if such rate is not so published for any day, the
Federal Funds Rate for such day shall be the average rate charged
to the Agent on such day on such transactions, as determined by
the Agent.
"Fiscal Month" means any fiscal month of the Borrowers.
"Fiscal Quarter" means any fiscal quarter of the
Borrowers.
"Fiscal Year" means any fiscal year of the Borrowers.
"Fixed Rate Loan" means, individually and collectively,
as the context shall require, Offered Rate Loans and Euro-Dollar
Loans.
"Fronting Fee" shall have the meaning ascribed to it in
Section 3.08.
"GAAP" means generally accepted accounting principles
applied on a basis consistent with those which, in accordance
with Section 1.02, are to be used in making the calculations for
purposes of determining compliance with the terms of this
Agreement.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt or other obligation of any other Person
and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or
services, to provide collateral security, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hazardous Materials" includes, without limitation, (a)
solid or hazardous waste, as defined in the Resource Conservation
and Recovery Act of 1980, 42 U.S.C. Paragraph 6901 et seq. and its
implementing regulations and amendments, or in any applicable
state or local law or regulation, (b) "hazardous substance",
"pollutant", or "contaminant" as defined in CERCLA, or in any
applicable state or local law or regulation, (c) gasoline, or any
other petroleum product or by-product, including, crude oil or
any fraction thereof, (d) toxic substances, as defined in the
Toxic Substances Control Act of 1976, or in any applicable state
or local law or regulation and (e) insecticides, fungicides, or
rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local
law or regulation, as each such Act, statute or regulation may be
amended from time to time.
"HP (US) Agreement" means the U.S Distributor Agreement
dated January 1, 1996, between Hewlett-Packard Company and SED.
"Income Available for Fixed Charges" for any period
means the sum of (i) Consolidated Net Income, (ii) taxes on
income, (iii) depreciation expense, (iv) amortization expense,
and (v) Consolidated Fixed Charges, all determined with respect
to the Borrowers and the Consolidated Subsidiaries on a
consolidated basis for such period and in accordance with GAAP.
"Interest Period" means: (1) with respect to each
Euro-Dollar Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the
first, second, third or sixth month thereafter, as the relevant
Borrower may elect in the applicable Notice of Borrowing;
provided that:
(a) any Interest Period (subject to paragraph (c)
below) which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall, subject to
paragraph (c) below, end on the last Euro-Dollar Business
Day of the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which begins
before the Termination Date and would otherwise end after
the Termination Date.
(2) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; provided that:
(a) any Interest Period (subject to paragraph (b)
below) which would otherwise end on a day which is not a
Domestic Business Day shall be extended to the next
succeeding Domestic Business Day; and
(b) no Interest Period which begins before the
Termination Date and would otherwise end after the
Termination Date may be selected.
3) with respect to each Offered Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the
numerically corresponding day occuring closest to 30 days, 60
days or 90 days thereafter, as the relevant Borrower may elect in
the applicable Notice of Borrowing; provided that:
(a) any Interest Period (subject to paragraph (b)
below) which would otherwise end on a day which is not a
Domestic Business Day shall be extended to the next
succeeding Domestic Business Day; and
(b) no Interest Period which begins before the
Termination Date and would otherwise end after the
Termination Date may be selected.
"Inventory" means all inventory of each Borrower, or in
which it has rights, whether now owned or hereafter acquired,
wherever located, including, without limitation, all goods of
each Borrower held for sale or lease or furnished or to be
furnished under contracts of service, all goods held for display
or demonstration, goods on lease or consignment, returned and
repossessed goods, all raw materials, work-in-process, finished
goods and supplies used or consumed in such Borrower's business,
together with all documents, documents of title, dock warrants,
dock receipts, warehouse receipts, bills of lading or orders for
the delivery of all, or any portion, of the foregoing.
"Investment" means any investment in any Person,
whether by means of purchase or acquisition of obligations or
securities of such Person, capital contribution to such Person,
loan or advance to such Person, making of a time deposit with
such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"Lending Office" means, as to each Bank, its office
located at its address set forth on the signature pages hereof
(or identified on the signature pages hereof as its Lending
Office) or such other office as such Bank may hereafter designate
as its Lending Office by notice to the Borrowers and the Agent.
"Letter of Credit" shall mean a commercial letter of
credit issued by the Agent for the account of either Borrower
pursuant to Article III.
"Letter of Credit Fee" shall have the meaning ascribed
to it in Section 3.08.
"Letter of Credit Obligations" shall mean, at any
particular time, the sum of (a) the Reimbursement Obligations at
such time, (b) the aggregate maximum amount available for drawing
under the Letters of Credit at such time and (c) the aggregate
maximum amount available for drawing under Letters of Credit
which have been requested pursuant to Section 3.04(a) and
approved for issuance by the Agent pursuant to Section 3.04(b)
and which are to be, but have not yet been, issued.
"Letter of Credit Application Agreement" shall mean,
with respect to a Letter of Credit, such form of application
therefor (whether in a single or several documents) as the Agent
may employ in the ordinary course of business for its own
account, whether or not providing for collateral security, with
such modifications thereto as may by agreed upon by the Agent and
the relevant Borrower and are not materially adverse to the
interests of the Banks; provided, however, that in the event of
any conflict between the terms of any Letter of Credit
Application Agreement and this Agreement, the terms of this
Agreement shall control.
"Leverage Ratio" means the ratio of Consolidated
Liabilities to Consolidated Tangible Net Worth.
"Lien" means, with respect to any asset, any mortgage,
deed to secure debt, deed of trust, lien, pledge, charge,
security interest, security title, preferential arrangement which
has the practical effect of constituting a security interest or
encumbrance, or encumbrance or servitude of any kind in respect
of such asset to secure or assure payment of a Debt or a
Guarantee, whether by consensual agreement or by operation of
statute or other law, or by any agreement, contingent or
otherwise, to provide any of the foregoing. For the purposes of
this Agreement, each Borrower or any Subsidiary shall be deemed
to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" means a Base Rate Loan, Offered Rate Loan,
Euro-Dollar Loan, Syndicated Loan, or Swing Loan, and "Loans" means
Base Rate Loans, Offered Rate Loans, Euro-Dollar Loans,
Syndicated Loans, Swing Loans, or any or all of them, as the
context shall require.
"Loan Documents" means this Agreement, the Notes, each
Letter of Credit Application Agreement, each Borrowing Base
Certificate, any other document evidencing, relating to or
securing the Loans or the Letters of Credit, and any other
document or instrument delivered from time to time in connection
with this Agreement, the Notes, the Loans or the Letters of
Credit, as such documents and instruments may be amended or
supplemented from time to time.
"London Interbank Offered Rate" has the meaning set
forth in Section 2.05(d).
"Long-Term Debt" means at any date any Consolidated
Debt which matures (or the maturity of which may at the option of
either Borrower or any Consolidated Subsidiary be extended such
that it matures) more than one year after such date.
"Margin Stock" means "margin stock" as defined in
Regulations G, T, U or X.
"Material Adverse Effect" means, with respect to any
event, act, condition or occurrence of whatever nature (including
any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singly or in
conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or
not related, a material adverse change in, or a material adverse
effect upon, any of (a) the financial condition, operations,
business, properties or prospects of the Borrowers and the
Consolidated Subsidiaries taken as a whole, (b) the rights and
remedies of the Agent or the Banks under the Loan Documents, or
the ability of either Borrower to perform its obligations under
the Loan Documents to which it is a party, as applicable, or (c)
the legality, validity or enforceability of any Loan Document.
"Moody's" means Xxxxx'x Investor Service, Inc.
"Multiemployer Plan" shall have the meaning set forth
in Section 4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any
period, the aggregate amount of net income of such Person, after
taxes, for such period, as determined in accordance with GAAP.
"Net Proceeds of Capital Stock" means any proceeds
received by either Borrower or a Consolidated Subsidiary in
respect of the issuance of Capital Stock, after deducting
therefrom all reasonable and customary costs and expenses
incurred by such Borrower or such Consolidated Subsidiary
directly in connection with the issuance of such Capital Stock.
"Notes" means each of the Syndicated Loan Notes or the
Swing Loan Note, or any or all of them, as the context shall
require.
"Notice of Borrowing" has the meaning set forth in
Section 2.02.
"Offered Base Rate" means, for any Offered Rate Loan,
the rate per annum which the Banks have jointly established as
the Offered Base Rate for the Interest Period for such Offered
Rate Loan.
"Offered Rate Loan" means a Loan which bears or is to
bear interest at a rate based upon the Offered Base Rate, and is
to be made as an Offered Rate Loan pursuant to the applicable
Notice of Borrowing
"Officer's Certificate" has the meaning set forth in
Section 4.01(f).
"Operating Profits" means, as applied to any Person for
any period, the operating income of such Person for such period,
as determined in accordance with GAAP.
"Participant" has the meaning set forth in Section
10.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, a corporation, a
partnership, an unincorporated association, a trust or any other
entity or organization, including, but not limited to, a
government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit
plan which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and is
either (i) maintained by a member of the Controlled Group for
employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is
then making or accruing an obligation to make contributions or
has within the preceding 5 plan years made contributions.
"Prime Rate" refers to that interest rate so
denominated and set by Wachovia from time to time as an interest
rate basis for borrowings. The Prime Rate is but one of several
interest rate bases used by Wachovia. Wachovia lends at interest
rates above and below the Prime Rate.
"Properties" means all real property owned, leased or
otherwise used or occupied by either Borrower or any Subsidiary,
wherever located.
"Redeemable Preferred Stock" of any Person means any
preferred stock issued by such Person which is at any time prior
to the Termination Date either (i) mandatorily redeemable (by
sinking fund or similar payments or otherwise) or (ii) redeemable
at the option of the holder thereof.
"Refunding Loan" means a new Syndicated Loan made on
the day on which an outstanding Syndicated Loan is maturing or a
Base Rate Borrowing is being converted to a Euro-Dollar
Borrowing, if and to the extent that the proceeds thereof are
used entirely for the purpose of paying such maturing Loan or
Loan being converted, excluding any difference between the amount
of such maturing Loan or Loan being converted and any greater
amount being borrowed on such day and actually either being made
available to the relevant Borrower pursuant to Section 2.02(c) or
remitted to the Agent as provided in Section 2.12, in each case
as contemplated in Section 2.02(d).
"Regulation G" means Regulation G of the Board of
Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations
issued thereunder.
"Regulation T" means Regulation T of the Board of
Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations
issued thereunder.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations
issued thereunder.
"Regulation X" means Regulation X of the Board of
Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations
issued thereunder.
"Reimbursement Obligations" means the reimbursement or
repayment obligations of the Borrowers to the Agent pursuant to
Section 3.05 with respect to Letters of Credit.
"Reported Net Income" means, for any period, the Net
Income of the Borrowers and the Consolidated Subsidiaries
determined on a consolidated basis.
"Required Banks" means (i) at any time during which any
Bank holds 65% or more of the Aggregate Commitments, Banks having
at least 85% of the Aggregate Commitments or, if the Commitments
are no longer in effect, Banks holding at least 85% of the
aggregate outstanding principal amount of the sum of the
Syndicated Loans, and (ii) at any time during which no Bank holds
65% or more of the Aggregate Commitments, Banks having at least
66 2/3% of the Aggregate Commitments or, if the Commitments are
no longer in effect, Banks holding at least 66 2/3% of the
aggregate outstanding principal amount of the sum of the
Syndicated Loans.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of SEC's Capital Stock (except
dividends payable solely in shares of its Capital Stock) or (ii)
any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of SEC's Capital Stock (except
shares acquired upon the conversion thereof into other shares of
its Capital Stock) or (b) any option, warrant or other right to
acquire shares of SEC's Capital Stock.
"SEC" means Southern Electronics Corporation, a
Delaware corporation.
"SED" means Southern Electronics Distributors, Inc., a
Delaware corporation.
"S&P" means Standard & Poor's Ratings Group, a division
of XxXxxx-Xxxx, Inc.
"Senior Management" means all officers of a Borrower
having the title of Vice President or above.
"Stockholders' Equity" means, at any time, the
shareholders' equity of the Borrowers and the Consolidated
Subsidiaries, as set forth or reflected on the most recent
consolidated balance sheet of the Borrowers and the Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any
Redeemable Preferred Stock of either Borrower or any of the
Consolidated Subsidiaries. Shareholders' equity generally would
include, but not be limited to (i) the par or stated value of all
outstanding Capital Stock, (ii) capital surplus, (iii) retained
earnings, and (iv) various deductions such as (A) purchases of
treasury stock, (B) valuation allowances, (C) receivables due
from an employee stock ownership plan, (D) employee stock
ownership plan debt guarantees, and (E) translation adjustments
for foreign currency transactions.
"Subsidiary" means any corporation or other entity of
which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time
directly or indirectly owned by either Borrower.
"Swing Loan" means a Loan made by Wachovia pursuant to
Section 2.01(b), which must be a Base Rate Loan.
"Swing Loan Note" means the promissory notes of the
Borrowers, substantially in the form of Exhibit A-2, evidencing
the obligation of the Borrowers to repay the Swing Loans,
together with all amendments, consolidations, modifications,
renewals, and supplements thereto.
"Syndicated Loan Notes" means the promissory notes of
the Borrowers, substantially in the form of Exhibit A-1,
evidencing the obligation of the Borrowers to repay Syndicated
Loans, together with all amendments, consolidations,
modifications, renewals and supplements thereto.
"Syndicated Loans" means Base Rate Loans, Offered Rate
Loans or Euro-Dollar Loans made pursuant to the terms and
conditions set forth in Section 2.01.
"Taxes" has the meaning set forth in Section 2.12(c).
"Termination Date" means whichever is applicable of (i)
January 23, 1998, (ii) the date the Commitments are terminated
pursuant to Section 7.01 following the occurrence of an Event of
Default, or (iii) the date the Borrowers terminate the
Commitments entirely pursuant to Section 2.07.
"Third Parties" means all lessees, sublessees,
licensees and other users of the Properties, excluding those
users of the Properties in the ordinary course of the Borrowers'
business and on a temporary basis.
"Transferee" has the meaning set forth in Section
10.08(d).
"Unfunded Vested Liabilities" means, with respect to
any Plan at any time, the amount (if any) by which (i) the
present value of all vested nonforfeitable benefits under such
Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the
Controlled Group to the PBGC or the Plan under Title IV of ERISA.
"Wachovia" means Wachovia Bank of Georgia, N.A., a
national banking association, and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of
the shares of capital stock or other ownership interests of which
(except directors' qualifying shares) are at the time directly or
indirectly owned by either Borrower.
SECTION 1.02. Accounting Terms and Determinations.
Unless otherwise specified herein, all terms of an accounting
character used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared,
in accordance with GAAP, applied on a basis consistent (except
for changes concurred in by the Borrowers' independent public
accountants or otherwise required by a change in GAAP) with the
most recent audited consolidated financial statements of the
Borrowers and the Consolidated Subsidiaries delivered to the
Banks unless with respect to any such change concurred in by the
Borrowers' independent public accountants or required by GAAP, in
determining compliance with any of the provisions of this
Agreement or any of the other Loan Documents: (i) the Borrowers
shall have objected to determining such compliance on such basis
at the time of delivery of such financial statements, or (ii) the
Required Banks shall so object in writing within 30 days after
the delivery of such financial statements, in either of which
events such calculations shall be made on a basis consistent with
those used in the preparation of the latest financial statements
as to which such objection shall not have been made (which, if
objection is made in respect of the first financial statements
delivered under Section 6.01, shall mean the financial statements
referred to in Section 5.04).
SECTION 1.03. References. Unless otherwise indicated,
references in this Agreement to "Articles", "Exhibits",
"Schedules", "Sections" and other Subdivisions are references to
articles, exhibits, schedules, sections and other subdivisions
hereof.
SECTION 1.04. Use of Defined Terms. All terms defined
in this Agreement shall have the same defined meanings when used
in any of the other Loan Documents, unless otherwise defined
therein or unless the context shall require otherwise.
SECTION 1.05. Terminology. All personal pronouns used
in this Agreement, whether used in the masculine, feminine or
neuter gender, shall include all other genders; the singular
shall include the plural, and the plural shall include the
singular. Titles of Articles and Sections in this Agreement are
for convenience only, and neither limit nor amplify the
provisions of this Agreement.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend Syndicated Loans. (a)
Each Bank severally agrees, on the terms and conditions set forth
herein, to make Syndicated Loans to either Borrower from time to
time before the Termination Date; provided that,
(i) immediately after each such Syndicated Loan is
made, the sum of the aggregate outstanding principal amount
of Syndicated Loans to both Borrowers by such Bank and the
risk participation of such Bank in Letter of Credit
Obligations of both Borrowers shall not exceed the amount of
its Commitment, and
(ii) the Aggregate Principal Amount Outstanding shall
not exceed the lesser of the Borrowing Base and the
Aggregate Commitments.
Each Syndicated Borrowing under this Section shall be in an
aggregate principal amount of: (i) for Euro-Dollar Loans and
Offered Rate Loans, $1,000,000 or any larger integral multiple of
$100,000; and (ii) for Base Rate Loans, (x) so long as there are
fewer than 3 Banks parties hereto, $100,000 or any larger
integral multiple of $50,000 and (y) at any time during which
there are 3 or more Banks parties hereto, $1,000,000 or any
larger integral multiple of $100,000 (except in each case that
any such Syndicated Borrowing may be in the aggregate amount of
the Aggregate Unused Commitments) and shall be made from the
several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, either Borrower may
borrow under this Section, repay or, to the extent permitted by
Section 2.09, prepay Syndicated Loans and reborrow under this
Section at any time before the Termination Date.
(b) Swing Loans. In addition to the foregoing, at any time
during which there are 3 or more Banks parties hereto, Wachovia
shall from time to time, upon the request of either Borrower, if
the applicable conditions precedent in Article IV have been
satisfied, make Swing Loans to such Borrower in an aggregate
principal amount at any time outstanding not exceeding
$1,000,000; provided that, immediately after such Swing Loan is
made, the Aggregate Principal Amount Outstanding shall not exceed
the lesser of the Borrowing Base and the Aggregate Commitments.
Each Swing Borrowing under this Section 2.01(b) shall be in an
aggregate principal amount of $100,000 or any larger multiple of
$25,000. Within the foregoing limits, the Borrowers may borrow
under this Section 2.01(b), prepay and reborrow under this
Section 2.01(b) at any time before the Termination Date. Swing
Loans shall be included in the calculation of "Aggregate
Principal Amount Outstanding" hereunder, but shall not be
considered a utilization of the Commitment of Wachovia or any
other Bank hereunder. All Swing Loans shall be made as Base Rate
Loans. At any time, upon the request of Wachovia, each Bank
other than Wachovia shall, on the third Domestic Business Day
after such request is made, purchase a participating interest in
Swing Loans in an amount equal to its ratable share (based upon
its respective Commitment) of such Swing Loans. On such third
Domestic Business Day, each Bank will immediately transfer to
Wachovia, in immediately available funds, the amount of its
participation. Whenever, at any time after Wachovia has received
from any such Bank its participating interest in a Swing Loan,
the Agent receives any payment on account thereof, the Agent will
distribute to such Bank its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Bank's participating
interest was outstanding and funded); provided, however, that in
the event that such payment received by the Agent is required to
be returned, such Bank will return to the Agent any portion
thereof previously distributed by the Agent to it. Each Bank's
obligation to purchase such participating interests shall be
absolute and unconditional and shall not be affected by any
circumstance, including, without limitation: (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank
or any other Person may have against Wachovia requesting such
purchase or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default or an Event of Default or
the termination of the Commitments; (iii) any adverse change in
the condition (financial or otherwise) of either of the Borrowers
or any other Person; (iv) any breach of this Agreement by either
of the Borrowers or any other Bank; or (v) any other
circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
SECTION 2.02. Method of Borrowing. (a) The requesting
Borrower shall give the Agent notice (a "Notice of Borrowing"),
which shall be substantially in the form of Exhibit E, prior to
12:00 P.M. (Atlanta, Georgia time) on the same Domestic Business
Day as each Base Rate Borrowing and Offered Rate Borrowing and at
least 3 Euro-Dollar Business Days before each Euro-Dollar
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Base Rate Borrowing
or an Offered Rate Borrowing or a Euro-Dollar Business Day
in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether such Borrowing is to be a Syndicated
Borrowing or a Swing Borrowing, and in the case of a
Syndicated Borrowing, whether the Syndicated Loans
comprising such Borrowing are to be Base Rate Loans, Offered
Rate Loans or Euro-Dollar Loans,
(iv) in the case of an Offered Rate Borrowing or a
Euro-Dollar Borrowing, the duration of the Interest Period
applicable thereto, subject to the provisions of the
definition of Interest Period, and
(v) the amount available to be borrowed under Section
2.01.
Each Notice of Borrowing shall be accompanied by a certificate (a
"Borrowing Base Certificate") in substantially the form of
Exhibit F, setting forth the calculations of the Borrowing Base,
as of the date of such Notice of Borrowing.
(b) Upon receipt of a Notice of Borrowing, the Agent
shall promptly notify each Bank of the contents thereof, of the
amount of the Borrowing Base as set forth in the Borrowing Base
Certificate which accompanied such Notice of Borrowing and of
such Bank's ratable share of such Syndicated Borrowing and such
Notice of Borrowing, once received by the Agent, shall not
thereafter be revocable by either Borrower.
(c) Not later than (x) for Euro-Dollar Loans, 11:00
A.M., and (y) for Base Rate Loans and Offered Rate Loans, 4:00
P.M., (Atlanta, Georgia time) on the date of each Syndicated
Borrowing, each Bank shall (except as provided in paragraph (d)
of this Section) make available its ratable share of such
Syndicated Borrowing, in Federal or other funds immediately
available in Atlanta, Georgia, to the Agent at its address
determined pursuant to Section 10.01. Unless the Agent
determines that any applicable condition specified in Article IV
has not been satisfied, the Agent will make the funds so received
from the Banks available to the relevant Borrower at the Agent's
aforesaid address. Unless the Agent receives notice from a Bank,
at the Agent's address referred to in or specified pursuant to
Section 10.01, no later than 4:00 P.M. (local time at such
address) on the Domestic Business Day before the date of a
Syndicated Borrowing stating that such Bank will not make a
Syndicated Loan in connection with such Syndicated Borrowing, the
Agent shall be entitled to assume that such Bank will make a
Syndicated Loan in connection with such Syndicated Borrowing and,
in reliance on such assumption, the Agent may (but shall not be
obligated to) make available such Bank's ratable share of such
Syndicated Borrowing to the requesting Borrower for the account
of such Bank. If the Agent makes such Bank's ratable share
available to the requesting Borrower and such Bank does not in
fact make its ratable share of such Syndicated Borrowing
available on such date, the Agent shall be entitled to recover
such Bank's ratable share from such Bank or the Borrowers (and
for such purpose shall be entitled to charge such amount to any
account of the Borrowers maintained with the Agent), together
with interest thereon for each day during the period from the
date of such Syndicated Borrowing until such sum shall be paid in
full at a rate per annum equal to the rate at which the Agent
determines that it obtained (or could have obtained) overnight
Federal funds to cover such amount for each such day during such
period, provided that (i) any such payment by the Borrowers of
such Bank's ratable share and interest thereon shall be without
prejudice to any rights that the Borrowers may have against such
Bank and (ii) until such Bank has paid its ratable share of such
Syndicated Borrowing, together with interest pursuant to the
foregoing, it will have no interest in or rights with respect to
such Syndicated Borrowing for any purpose hereunder. If the
Agent does not exercise its option to advance funds for the
account of such Bank, it shall forthwith notify the Borrowers of
such decision. Unless the Agent determines that any applicable
condition specified in Article IV has not been satisfied,
Wachovia will make available to the requesting Borrower at
Wachovia's Lending Office the amount of any such Borrowing which
is a Swing Borrowing.
(d) If any Bank makes a new Syndicated Loan hereunder
on a day on which the relevant Borrower is to repay all or any
part of an outstanding Syndicated Loan from such Bank, such Bank
shall apply the proceeds of its new Syndicated Loan to make such
repayment as a Refunding Loan and only an amount equal to the
difference (if any) between the amount being borrowed and the
amount of such Refunding Loan shall be made available by such
Bank to the Agent as provided in paragraph (c) of this Section,
or remitted by the relevant Borrower to the Agent as provided in
Section 2.12, as the case may be.
(e) Notwithstanding anything to the contrary contained
in this Agreement, no Euro-Dollar Borrowing may be made if there
shall have occurred a Default or an Event of Default, which
Default or Event of Default shall not have been cured or waived,
and all Refunding Loans shall be made as Base Rate Loans (but
shall bear interest at the Default Rate, if applicable).
(f) In the event that a Notice of Borrowing fails to
specify whether the Syndicated Loans comprising such Syndicated
Borrowing are to be Base Rate Loans, Offered Rate Loans or
Euro-Dollar Loans, such Syndicated Loans shall be made as Base
Rate Loans. If the Borrowers are otherwise entitled under this
Agreement to repay any Syndicated Loans maturing at the end of an
Interest Period applicable thereto with the proceeds of a new
Borrowing, and either Borrower fails to repay such Syndicated
Loans using its own moneys and fails to give a Notice of
Borrowing in connection with such new Syndicated Borrowing, a new
Syndicated Borrowing shall be deemed to be made on the date such
Syndicated Loans mature in an amount equal to the principal
amount of the Syndicated Loans so maturing, and the Syndicated
Loans comprising such new Syndicated Borrowing shall be Base Rate
Loans.
(g) Notwithstanding anything to the contrary
contained herein, there shall not be more than 5 Euro-Dollar
Borrowings outstanding at any given time.
SECTION 2.03. Notes. (a) The Syndicated Loans of each
Bank shall be evidenced by a single Syndicated Loan Note from
each Borrower payable to the order of such Bank for the account
of its Lending Office in an amount equal to the original
principal amount of such Bank's Commitment.
(b) The Swing Loans made by Wachovia to each Borrower
shall be evidenced by a single Swing Loan Note payable by such
Borrower to the order of Wachovia for the account of its Lending
Office in an amount equal to $1,000,000.
(c) Upon receipt of each Bank's Notes pursuant to
Section 4.01, the Agent shall deliver such Notes to such Bank.
Each Bank (or Wachovia, with respect to the Swing Loan) shall
record, and prior to any transfer of its Notes shall endorse on
the schedules forming a part thereof (or on separate records of
such Bank) appropriate notations to evidence, the date, amount
and maturity of, and effective interest rate for, each Loan made
by it, the date and amount of each payment of principal made by
the Borrowers with respect thereto, and such schedules of each
such Bank's Notes or other records of such Bank shall constitute
rebuttable presumptive evidence of the respective principal
amounts owing and unpaid on such Bank's Notes; provided that the
failure of any Bank to make, or any error in making, any such
recordation or endorsement shall not affect the obligation of the
Borrowers hereunder or under the Notes or the ability of any Bank
to assign its Notes. Each Bank is hereby irrevocably authorized
by each Borrower so to endorse its Notes and to attach to and
make a part of any Note a continuation of any such schedule as
and when required.
SECTION 2.04. Maturity of Loans. (a) Each Loan
included in any Borrowing shall mature, and the principal amount
thereof shall be due and payable, on the last day of the Interest
Period applicable to such Borrowing.
(b) Notwithstanding the foregoing, the outstanding
principal amount of the Loans, if any, together with all accrued
but unpaid interest thereon, if any, shall be due and payable on
the Termination Date.
SECTION 2.05. Interest Rates. (a) "Applicable Margin"
means (i) for any Base Rate Loan, 0.0% and (ii) for any Offered
Rate Loan or Euro-Dollar Loan, 2.0%.
(b) Each Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal
to the Base Rate for such day plus the Applicable Margin. Such
interest shall be payable for each Interest Period on the last
day of the calendar month in which such Interest Period occurs.
Any overdue principal of and, to the extent permitted by
applicable law, overdue interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate
per annum equal to the Default Rate.
(c) Each Offered Rate Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the Applicable
Margin plus the Offered Base Rate for such Interest Period. Such
interest shall be payable for each Interest Period on the last
day thereof. Any overdue principal of and, to the extent
permitted by applicable law, overdue interest on any Offered Rate
Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the
Applicable Margin plus the applicable Adjusted London Interbank
Offered Rate for such Interest Period. Such interest shall be
payable for each Interest Period on the last day thereof and, if
such Interest Period is longer than 3 months, at intervals of 3
months after the first day thereof. Any overdue principal of
and, to the extent permitted by law, overdue interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable
to any Interest Period means a rate per annum equal to the
quotient obtained (rounded upwards, if necessary, to the next
higher 1/100th of 1%) by dividing (i) the applicable London
Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such
Euro-Dollar Loan, the rate per annum determined on the basis of
the offered rate for deposits in Dollars of amounts equal or
comparable to the principal amount of such Euro-Dollar Loan
offered for a term comparable to such Interest Period, which
rates appear on the Telerate Page 3750 effective as of 11:00
A.M., London time, 2 Euro-Dollar Business Days prior to the first
day of such Interest Period, provided that if no such offered
rates appear on such page, the "London Interbank Offered Rate"
for such Interest Period will be the arithmetic average (rounded
upward, if necessary, to the next higher 1/100th of 1%) of rates
quoted by not less than 2 major banks in New York City, selected
by the Agent, at approximately 10:00 A.M., New York City time, 2
Euro-Dollar Business Days prior to the first day of such Interest
Period, for deposits in Dollars offered by leading European banks
for a period comparable to such Interest Period in an amount
comparable to the principal amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement for a member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" (or in respect of
any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any
Bank to United States residents). The Adjusted London Interbank
Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve
Percentage.
(e) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt
notice to the Borrowers and the Banks by telecopier of each rate
of interest so determined, and its determination thereof shall be
conclusive in the absence of manifest error.
(f) After the occurrence and during the continuance of
an Event of Default, the principal amount of the Loans (and, to
the extent permitted by applicable law, all accrued interest
thereon) may, at the election of the Required Banks, bear
interest at the Default Rate.
SECTION 2.06. Fees. (a) The Borrowers shall pay to the
Agent, for the ratable account of each Bank, a commitment fee,
calculated on the average daily amount of the Aggregate Unused
Commitments, at the rate of 0.375% per annum. Such commitment
fees shall accrue from and including the Closing Date to but
excluding the Termination Date and shall be payable on each March
31, June 30, September 30 and December 31 and on the Termination
Date.
(b) The Borrowers shall pay to the Agent, for the
ratable account of each Bank, a facility fee in the aggregate
amount of $62,500. Such facility fee shall be payable in full on
the Closing Date.
(c) The Borrowers shall pay to the Agent, for the
account and sole benefit of the Agent, such fees and other
amounts at such times as set forth in the Agent's Letter
Agreement.
SECTION 2.07. Optional Termination or Reduction of
Commitments. The Borrowers may, upon at least 3 Domestic
Business Days' notice to the Agent, terminate at any time, or
proportionately and permanently reduce the Aggregate Unused
Commitments from time to time by an aggregate amount of at least
$5,000,000 or any larger integral multiple of $1,000,000. If the
Commitments are terminated in their entirety, all accrued fees
(as provided under Section 2.06) shall be due and payable on the
effective date of such termination.
SECTION 2.08. Mandatory Termination of Commitments.
The Commitments shall terminate on the Termination Date and any
Loans then outstanding (together with accrued interest thereon)
shall be due and payable on such date.
SECTION 2.09. Optional Prepayments. (a) The Borrowers
may, on notice to the Agent on or before the same Domestic
Business Days as the prepayment, prepay any Base Rate Borrowing
in whole at any time, or from time to time in part in amounts
aggregating at least: (i) for Syndicated Borrowings, (x) so long
as there are fewer than 3 Banks parties hereto, $100,000 or any
larger integral multiple of $50,000 or (y) at any time during
which there are 3 or more Banks parties hereto, $1,000,000 or any
larger integral multiple of $100,000; and (ii) for Swing
Borrowings, $100,000 and any larger integral multiple of $25,000,
by paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment. Each such
optional prepayment on the Syndicated Loans shall be applied to
prepay ratably the Base Rate Loans of the several Banks included
in such Base Rate Borrowing.
(b) Subject to any payments required pursuant to the
terms of Article IX for such Fixed Rate Loan, upon 3 Domestic
Business Day's prior written notice, the Borrowers may prepay in
minimum amounts of $1,000,000 with additional increments of
$100,000 (or any lesser amount equal to the outstanding balance
of such Loan) all or any portion of the principal amount of any
Fixed Rate Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to
this Section 2.09, the Agent shall promptly notify each Bank of
the contents thereof and of such Bank's ratable share of such
prepayment and such notice, once received by the Agent, shall not
thereafter be revocable by the Borrowers.
SECTION 2.10. Mandatory Prepayments. On each date on
which the Commitments are reduced pursuant to Section 2.07 or
Section 2.09, the Borrowers shall repay or prepay such principal
amount of the outstanding Loans, if any (together with interest
accrued thereon and any amount due under Section 9.05(a)), as may
be necessary so that after such payment the Aggregate Principal
Amount Outstanding does not exceed the Aggregate Commitments as
then reduced. On each date on which the Borrowers are aware that
the Aggregate Principal Amount Outstanding exceeds the lesser of
the Borrowing Base or the Aggregate Commitments, the Borrowers
shall repay or prepay such principal amount of the outstanding
Loans, if any (together with interest accrued thereon and any
amount due under Section 9.05(a)), as may be necessary so that
after such payment the Aggregate Principal Amount Outstanding
does not exceed the lesser of the Borrowing Base or the Aggregate
Commitments. Each such payment or prepayment shall be applied
ratably to the Loans of the Banks outstanding on the date of
payment or prepayment in the following order of priority:(i)
first, to Swing Rate Loans; (ii) secondly, to Syndicated Loans
which are Base Rate Loans; (iii) thirdly to Syndicated Loans
which are Offered Rate Loans and (iv) lastly, to Euro-Dollar
Loans.
SECTION 2.12. General Provisions as to Payments. (a)
The Borrowers shall make each payment of principal of, and
interest on, the Loans and of fees hereunder, not later than
11:00 A.M. (Atlanta, Georgia time) on the date when due, in
Federal or other funds immediately available in Atlanta, Georgia,
to the Agent at its address referred to in Section 10.01. The
Agent will promptly distribute to Wachovia each such payment
received by the Agent on account of the Swing Loans and to each
Bank its ratable share of each such payment of Syndicated Loans
or fees received by the Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest
on, the Base Rate Loans or of fees hereunder shall be due on a
day which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of or interest
on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day.
(c) All payments of principal, interest and fees and
all other amounts to be made by the Borrowers pursuant to this
Agreement with respect to any Loan or fee relating thereto shall
be paid without deduction for, and free from, any tax, imposts,
levies, duties, deductions, or withholdings of any nature now or
at anytime hereafter imposed by any governmental authority or by
any taxing authority thereof or therein excluding in the case of
each Bank, taxes imposed on or measured by its net income, and
franchise taxes imposed on it, by the jurisdiction under the laws
of which such Bank is organized or any political subdivision
thereof and, in the case of each Bank, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction of
such Bank's applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, imposts,
levies, duties, deductions or withholdings of any nature being
"Taxes"). In the event that either Borrower is required by
applicable law to make any such withholding or deduction of Taxes
with respect to any Loan or fee or other amount, such Borrower
shall pay such deduction or withholding to the applicable taxing
authority, shall promptly furnish to any Bank in respect of which
such deduction or withholding is made all receipts and other
documents evidencing such payment and shall pay to such Bank
additional amounts as may be necessary in order that the amount
received by such Bank after the required withholding or other
payment shall equal the amount such Bank would have received had
no such withholding or other payment been made. If no
withholding or deduction of Taxes are payable in respect to any
Loan or fee relating thereto, the Borrowers shall furnish any
Bank, at such Bank's request, a certificate from each applicable
taxing authority or an opinion of counsel acceptable to such
Bank, in either case stating that such payments are exempt from
or not subject to withholding or deduction of Taxes. If the
relevant Borrower fails to provide such original or certified
copy of a receipt evidencing payment of Taxes or certificate(s)
or opinion of counsel of exemption, the Borrowers hereby agree to
compensate such Bank for, and indemnify them with respect to, the
tax consequences of such Borrower's failure to provide evidence
of tax payments or tax exemption.
Each Bank which is not organized under the laws of the
United States or any state thereof agrees, as soon as practicable
after receipt by it of a request by either Borrower to do so, to
file all appropriate forms and take other appropriate action to
obtain a certificate or other appropriate document from the
appropriate governmental authority in the jurisdiction imposing
the relevant Taxes, establishing that it is entitled to receive
payments of principal and interest under this Agreement and the
Notes without deduction and free from withholding of any Taxes
imposed by such jurisdiction; provided that if it is unable, for
any reason, to establish such exemption, or to file such forms
and, in any event, during such period of time as such request for
exemption is pending, the Borrowers shall nonetheless remain
obligated under the terms of the immediately preceding paragraph.
In the event any Bank receives a refund of any Taxes
paid by either Borrower pursuant to this Section 2.12(c), it will
pay to such Borrower the amount of such refund promptly upon
receipt thereof; provided that if at any time thereafter it is
required to return such refund, such Borrower shall promptly
repay to it the amount of such refund.
Without prejudice to the survival of any other
agreement of the Borrowers hereunder, the agreements and
obligations of the Borrowers and the Banks contained in this
Section 2.12(c) shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations
required by such provisions (i) shall be made based upon the
circumstances of such Participant, Assignee or other Transferee,
and (ii) constitute a continuing agreement and shall survive the
termination of this Agreement and the payment in full or
cancellation of the Notes.
SECTION 2.13. Computation of Interest and Fees.
Interest on Base Rate Loans, Offered Rate Loans and Euro-Dollar
Loans shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first
day but excluding the last day). Commitment fees and any other
fees payable hereunder shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day).
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.01. Obligation to Issue. Subject to the
terms and conditions of this Agreement, and in reliance upon the
representations and warranties of the Borrowers herein set forth,
the Agent shall issue for the account of either Borrower, one or
more Letters of Credit denominated in Dollars, in accordance with
this Article III, from time to time during the period commencing
on the Closing Date and ending on the Domestic Business Day prior
to the Termination Date. The Existing Letters of Credit shall be
deemed for all purposes hereunder to have been issued under and
shall be subject to this Agreement, and shall constitute Letters
of Credit hereunder.
SECTION 3.02. Types and Amounts. The Agent shall have
no obligation to issue any Letter of Credit at any time:
(a) if the aggregate maximum amount then available for
drawing under Letters of Credit, after giving effect to the
issuance of the requested Letter of Credit, shall exceed any
limit imposed by law or regulation upon the Agent;
(b) if, after giving effect to the issuance of the
requested Letter of Credit, (i) the aggregate Letter of
Credit Obligations of both Borrowers would exceed
$10,000,000, or (ii) the Aggregate Principal Amount
Outstanding at such time would exceed the lesser of the
Borrowing Base and the Aggregate Commitments;
(c) which has an expiration date (i) more than 12
months after the date of issuance or (ii) after the
Termination Date.
SECTION 3.03. Conditions. In addition to being subject
to the satisfaction of the conditions contained in Article IV,
the obligation of the Agent to issue any Letter of Credit is
subject to the satisfaction in full of the following conditions:
(a) the relevant Borrower shall have delivered to the
Agent at such times and in such manner as the Agent may
prescribe, a Letter of Credit Application Agreement and such
other documents and materials as may be required pursuant to
the terms thereof all satisfactory in form and substance to
the Agent and the terms of the proposed Letter of Credit
shall be satisfactory in form and substance to the Agent;
(b) as of the date of issuance no order, judgment or
decree of any court, arbitrator or Authority shall purport
by its terms to enjoin or restrain the Agent from issuing
the Letter of Credit and no law, rule or regulation
applicable to the Agent and no request or directive (whether
or not having the force of law) from any Authority with
jurisdiction over the Agent shall prohibit or request that
the Agent refrain from the issuance of letters of credit
generally or the issuance of that Letter of Credit; and
(c) the Aggregate Unused Commitments shall not be less
than the amount of the requested Letter of Credit.
SECTION 3.04. Issuance of Letters of Credit.
(a) Request for Issuance. At least 2 Domestic Business
Days before the effective date for any Letter of Credit, the
relevant Borrower shall give the Agent a written notice
containing the original signature of an authorized officer or
employee of such Borrower. Such notice shall be irrevocable and
shall specify the original face amount of the Letter of Credit
requested (which original face amount shall not be less than
$100,000), the effective date (which day shall be a Domestic
Business Day) of issuance of such requested Letter of Credit, the
date on which such requested Letter of Credit is to expire, the
amount of then outstanding Letter of Credit Obligations of both
Borrowers, the purpose for which such Letter of Credit is to be
issued, whether such Letter of Credit may be drawn in single or
partial draws and the person for whose benefit the requested
Letter of Credit is to be issued. Each such notice shall be
accompanied by a Borrowing Base Certificate setting forth the
calculations of the Borrowing Base, as of the date of such
notice.
(b) Issuance; Notice of Issuance. If the original face
amount of the requested Letter of Credit is less than or equal to
the Aggregate Unused Commitments at such time and the applicable
conditions set forth in this Agreement are satisfied, the Agent
shall issue the requested Letter of Credit. The Agent shall give
each Bank written or telex notice in substantially the form of
Exhibit G, or telephonic notice confirmed promptly thereafter in
writing, of the issuance of a Letter of Credit, and of the amount
of the Borrowing Base as of the date of such notice, as set forth
in the Borrowing Base Certificate which accompanied such notice,
and shall deliver to each Bank in connection with such notice a
copy of the Letter of Credit issued by the Agent.
(c) No Extension or Amendment. The Agent shall not
extend or amend any Letter of Credit if the issuance of a new
Letter of Credit having the same terms as such Letter of Credit
as so amended or extended would be prohibited by Section 3.02 or
Section 3.03.
SECTION 3.05. Reimbursement Obligations; Duties of the
Issuing Bank.
(a) Reimbursement. Notwithstanding any provisions to
the contrary in any Letter of Credit Application Agreement:
(i) the Borrowers shall reimburse the Agent for
drawings under a Letter of Credit issued by it no later than
the earlier of (A) the time specified in such Letter of
Credit Application Agreement, or (B) 1 Domestic Business Day
after the payment by the Agent;
(ii) any Reimbursement Obligation with respect to
any Letter of Credit shall bear interest from the date of
the relevant drawing under the pertinent Letter of Credit
until the date of payment in full thereof at a rate per
annum equal to (A) prior to the date that is 3 Domestic
Business Days after the date of the related payment by the
Agent, the Base Rate and (B) thereafter, the Default Rate;
and
(iii) in order to implement the foregoing, upon
the occurrence of a draw under any Letter of Credit, unless
the Agent is reimbursed in accordance with subsection (i)
above, the Borrowers irrevocably authorize the Agent to
treat such nonpayment as a Notice of Borrowing in the amount
of such Reimbursement Obligation and to make Loans to the
relevant Borrower in such amount regardless of whether the
conditions precedent to the making of Loans hereunder have
been met. The Borrowers further authorize the Agent to
credit the proceeds of such Loan so as to immediately
eliminate the liability of the relevant Borrower for
Reimbursement Obligations under such Letter of Credit.
(b) Duties of the Agent. Any action taken or omitted
to be taken by the Agent in connection with any Letter of Credit,
if taken or omitted in the absence of willful misconduct or gross
negligence, shall not put the Agent under any resulting liability
to any Bank, or assuming that the Agent has complied with the
procedures specified in Section 3.04 and such Bank has not given
a notice contemplated by Section 3.06(a) that continues in full
force and effect, relieve that Bank of its obligations hereunder
to the Agent. In determining whether to pay under any Letter of
Credit, the Agent shall have no obligation relative to the Banks
other than to confirm that any documents required to have been
delivered under such Letter of Credit appear to comply on their
face, with the requirements of such Letter of Credit.
SECTION 3.06. Participations.
(a) Purchase of Participations. Immediately upon
issuance by the Agent of any Letter of Credit in accordance with
the procedures set forth in Section 3.04, each Bank shall be
deemed to have irrevocably and unconditionally purchased and
received from the Agent, without recourse or warranty, an
undivided interest and participation, to the extent of such
Bank's share of the Aggregate Commitments, in such Letter of
Credit; provided, that a Letter of Credit shall not be entitled
to the benefits of this Section 3.06 if the Agent shall have
received written notice from any Bank on or before the Domestic
Business Day immediately prior to the date of the Agent's
issuance of such Letter of Credit that one or more of the
conditions contained in Section 3.03 or Article IV is not then
satisfied, and, in the event the Agent receives such a notice, it
shall have no further obligation to issue any Letter of Credit
until such notice is withdrawn by that Bank or until the Required
Banks have effectively waived such condition in accordance with
the provisions of this Agreement.
(b) Sharing of Letter of Credit Payments. In the event
that the Agent makes any payment under any Letter of Credit for
which the relevant Borrower shall not have repaid such amount to
the Agent pursuant to Section 3.07 or which cannot be paid by a
Loan pursuant to subsection (iii) of Section 3.05, the Agent
shall promptly notify each Bank of such failure, and each Bank
shall promptly and unconditionally pay to the Agent such Bank's
share of the Aggregate Commitments of the amount of such payment
in Dollars and in same day funds. If the Agent so notifies such
Bank prior to 10:00 A.M. (Atlanta, Georgia time) on any Domestic
Business Day, such Bank shall make available to the Agent its
ratable share of the amount of such payment on such Domestic
Business Day in same day funds. If and to the extent such Bank
shall not have so made its ratable share of the amount of such
payment available to the Agent, such Bank agrees to pay to the
Agent forthwith on demand such amount together with interest
thereon, for each day from the date such payment was first due
until the date such amount is paid to the Agent at the Base Rate
for the first 3 days and thereafter at the Default Rate. The
failure of any Bank to make available to the Agent its ratable
share of any such payment shall neither relieve nor increase the
obligation of any other Bank hereunder to make available to the
Agent its ratable share of any payment on the date such payment
is to be made.
(c) Sharing of Reimbursement Obligation Payments.
Whenever the Agent receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as to
which the Agent has received any payments from the Banks pursuant
to this Section 3.06, it shall promptly pay to each Bank which
has funded its participating interest therein, in Dollars and in
the kind of funds so received, an amount equal to such Bank's
ratable share thereof. Each such payment shall be made by the
Agent on the Domestic Business Day on which the funds are paid to
such Person, if received prior to 10:00 am. (Atlanta, Georgia
time) on such Domestic Business Day, and otherwise on the next
succeeding Domestic Business Day.
(d) Documentation. Upon the request of any Bank, the
Agent shall furnish to such Bank copies of any Letter of Credit,
Letter of Credit Application Agreement and other documentation
relating to Letters of Credit issued pursuant to this Agreement.
(e) Obligations Irrevocable. The obligations of the
Banks to make payments to the Agent with respect to a Letter of
Credit shall be irrevocable, not subject to any qualification or
exception whatsoever and shall be made in accordance with, but
not subject to, the terms and conditions of this Agreement under
all circumstances (assuming that the Agent has issued such Letter
of Credit in accordance with Section 3.04 and such Bank has not
given a notice contemplated by Section 3.06(a) that continues in
full force and effect), including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of
this Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense
or other right which either Borrower may have at any time
against a beneficiary named in a Letter of Credit or any
transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), the Agent, any Bank or
any other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein
or any unrelated transactions;
(iii) any draft, certificate or any other document
presented under the 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;
(iv) the surrender or impairment of any security
for the performance or observance of any of the terms of any
of the Loan Documents;
(v) payment by the Agent under any Letter of
Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(vi) payment by the Agent under any Letter of
Credit against presentation of any draft or certificate that
does not comply with the terms of such Letter of Credit,
except payment resulting from the gross negligence or
willful misconduct of the Agent; or
(vii) any other circumstances or happenings
whatsoever, whether or not similar to any of the foregoing,
except circumstances or happenings resulting from the gross
negligence or willful misconduct of the Agent.
SECTION 3.07. Payment of Reimbursement Obligations.
(a) Payments to Issuing Bank. Each Borrower agrees to
pay to the Agent the amount of all Reimbursement Obligations,
interest and other amounts payable to the Agent under or in
connection with any Letter of Credit issued for either Borrower's
account immediately when due, irrespective of:
(i) any lack of validity or enforceability of
this Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense
or other right which either Borrower may have at any time
against a beneficiary named in a Letter of Credit or any
transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), the Agent, any Bank or
any other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein
or any unrelated transactions;
(iii) any draft, certificate or any other document
presented under the Letter of Credit proves to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security
for the performance or observance of any of the terms of any
of the Loan Documents;
(v) payment by the Agent under any Letter of
Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(vi) payment by the Agent under any Letter of
Credit against presentation of any draft or certificate that
does not comply with the terms of such Letter of Credit,
except payment resulting from the gross negligence or
willful misconduct of the Agent; or
(vii) any other circumstances or happenings
whatsoever, whether or not similar to any of the foregoing,
except circumstances or happenings resulting from the gross
negligence or willful misconduct of the Agent.
(b) Recovery or Avoidance of Payments. In the event
any payment by or on behalf of the Borrower received by the Agent
with respect to a Letter of Credit and distributed by the Agent
to the Banks on account of their participations is thereafter set
aside, avoided or recovered from the Agent in connection with any
receivership, liquidation or bankruptcy proceeding, each Bank
that received such distribution shall, upon demand by such Agent,
contribute such Bank's ratable share of the amount set aside,
avoided or recovered together with interest at the rate required
to be paid by the Agent upon the amount required to be repaid by
it.
SECTION 3.08. Compensation for Letters of Credit and
Agent Reporting Requirements.
(a) Letter of Credit Fees and Fronting Fees. The
Borrowers shall pay to the Agent with respect to each Letter of
Credit issued hereunder (i) a letter of credit fee ("Letter of
Credit Fee") equal to 1.50% per annum of the face amount of such
Letter of Credit and (ii) to the Agent, solely for its own
account, a fronting fee (the "Fronting Fee") equal to 0.125% per
annum of the face amount. The Letter of Credit Fee and the
Fronting Fee shall be payable on the Domestic Business Day on
which such Letter of Credit is issued. Letter of Credit Fees and
Fronting Fees payable hereunder shall be computed on the basis of
a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day). The Agent
shall promptly remit such Letter of Credit Fees, when paid, to
the Banks in accordance with their ratable shares of the
Aggregate Commitments.
(b) Agent Charges. The Borrowers shall pay to the
Agent, solely for its own account, the standard charges assessed
by the Agent in connection with the issuance, administration,
amendment and payment or cancellation of Letters of Credit issued
hereunder, which charges shall be those typically charged by the
Agent to its customers generally having credit and other
characteristics similar to the Borrowers, as determined in good
faith by the Agent.
SECTION 3.09. Indemnification; Exoneration.
(a) Indemnification. In addition to amounts payable
as elsewhere provided in this Article III, the Borrowers shall
protect, indemnify, pay and save the Agent and each Bank harmless
from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) which the Agent, or any Bank may
incur or be subject to as a consequence of the issuance of any
Letter of Credit for either Borrower's account other than as a
result of its gross negligence or willful misconduct, as
determined by a court of competent jurisdiction.
(b) Assumption of Risk by Borrowers. As between the
Borrowers, the Agent and the Banks, the Borrowers assume all
risks of the acts and omissions of, or misuse of the Letters of
Credit issued for either Borrower's account by, the respective
beneficiaries of such Letters of Credit. In furtherance and not
in limitation of the foregoing, the Agent and the Banks shall not
be responsible for (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of the
Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or
forged, (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason, (iii) failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order
to draw upon such Letter of Credit, (iv) errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher, for errors in interpretation of
technical terms, (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof, (vii) the
misapplication by the beneficiary of a Letter of Credit of the
proceeds of any drawing under such Letter of Credit; and (viii)
any consequences arising from causes beyond the control of the
Agent and the Banks.
(c) Exoneration. In furtherance and extension and not
in limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Agent under or in connection
with the Letters of Credit or any related certificates if taken
or omitted in good faith and with reasonable care, shall not put
the Agent or any Bank under any resulting liability to the
Borrowers or relieve the Borrowers of any of its obligations
hereunder to any such Person.
SECTION 3.10. Credit Yield Protection; Capital
Adequacy. If the adoption after the date hereof of any
applicable law, statute, rule, regulation, ordinance, writ,
injunction, decree, order, judgment, guideline or decision of any
Authority ("Governmental Rule"), any change after the date hereof
in any interpretation or administration of any applicable
Governmental Rule by any Person charged with its interpretation
or administration or compliance by the Agent or any Bank (or its
Lending Office) with any request or directive (whether or not
having the force of law) of any such Person:
(a) shall subject the Agent or any Bank (or its
Lending Office) to any tax (other than overall net income
taxation or franchise taxes), duty or other charge with
respect to any amount drawn on any Letter of Credit or its
obligation to make any payment under the Letters of Credit,
or to maintain the Letters of Credit, or shall change the
basis of taxation (other than overall net income taxation or
franchise taxes) of payments to the Agent or any Bank (or
its Lending Office) of any amounts due under this Agreement
or any amount drawn on the Letters of Credit; or
(b) shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System or any
Person regulating insurance activities or insurance
companies), special deposit or similar requirements against
assets of, deposits with or for the account of, credit
extended by, letters of credit issued or maintained by, or
collateral subject to a lien in favor of the Agent or any
Bank (or its Lending Office), or shall impose on the Agent
or any Bank (or its Lending Office) any other condition
affecting any amount drawn on the Letters of Credit, or its
obligation to make any payment under the Letters of Credit,
as the case may be, or to maintain the Letters of Credit;
then the remaining provisions of this Section 3.10 shall
apply. If the result of any of the foregoing (without
regard to whether the Agent or any Bank shall have sold
participations in its respective obligations under this
Agreement) is to increase the cost to or to impose a cost on
the Agent or any Bank (or its Lending Office) of making or
maintaining any amounts payable hereunder, of maintaining
the Letters of Credit, or to reduce the amount of any sum
received or receivable by the Agent or any Bank (or its
Lending Office) under any Letter of Credit, then:
(i) the Agent or such Bank shall promptly
deliver to the Borrowers a certificate stating the
change which has occurred or the reserve requirements
or other conditions which have been imposed on the
Agent or such Bank (or its Lending Office) or the
request, direction or requirement with which it has
complied, together with the date hereof; and
(ii) the Borrowers shall pay to the Agent or such
Bank within 15 days of written request (which request
shall state the amount of increased cost, reduction or
payment and the way in which such amount has been
calculated), such amount or amounts as will compensate
the Agent or such Bank for the additional cost,
reduction of return or payment incurred by the Agent or
such other Bank; provided, that the Borrowers shall
have no liability for amounts related to periods
earlier than 90 days prior to the date of such written
request. The written request of the Agent or such Bank
as to the additional amounts payable pursuant to this
paragraph delivered to the Borrowers shall be
conclusive evidence of the amount thereof in the
absence of manifest error.
(c) If any Bank shall have determined that after the
date hereof the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or
administration thereof, or compliance by any Bank (or its
Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of
any Authority, has or would have the effect of reducing the
rate of return on such Bank's capital as a consequence of
its obligations hereunder to a level below that which such
Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies
with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15
days after demand by such Bank, the Borrowers shall pay to
such Bank such additional amount or amounts as will
compensate such Bank for such reduction; provided, that the
Borrowers shall have no liability for amounts related to
periods earlier than 90 days prior to the date of such
written request.
(d) Each Bank will promptly notify the Borrowers and
the Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Bank to
compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and
will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth
the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(e) The provisions of this Section 3.10 shall be
applicable with respect to any Participant, Assignee or
other Transferee, and any calculations required by such
provisions shall be made based upon the circumstances of
such Participant, Assignee or other Transferee.
ARTICLE IV
CONDITIONS TO BORROWINGS
SECTION 4.01. Conditions to First Borrowing. The
obligation of each Bank to make a Syndicated Loan, or of Wachovia
to make a Swing Loan on the occasion of the first Borrowing, or
the obligation of the Agent to issue the first Letter of Credit,
is subject to the satisfaction of the conditions set forth in
Section 4.02 and receipt by the Agent of the following (as to the
documents described in paragraphs (a),(c), (d) and (e) below, in
sufficient number of counterparts for delivery of a counterpart
to each Bank and retention of one counterpart by the Agent):
(a) from each of the parties hereto of either (i) a
duly executed counterpart of this Agreement signed by such
party or (ii) a facsimile transmission of such executed
counterpart, with the original to be sent to the Agent by
overnight courier);
(b) a duly executed Syndicated Loan Note for the
account of each Bank and a duly executed Swing Loan Note for
the account of Wachovia, in each case complying with the
provisions of Section 2.03;
(c) an opinion letter (together with any opinions of
local counsel relied on therein) of Long, Xxxxxxxx & Xxxxxx,
counsel for the Borrowers, dated as of the Closing Date,
substantially in the form of Exhibit B and covering such
additional matters relating to the transactions contemplated
hereby as the Agent or any Bank may reasonably request;
(d) an opinion of Xxxxx, Day, Xxxxxx & Xxxxx, special
counsel for the Agent, dated as of the Closing Date,
substantially in the form of Exhibit C and covering such
additional matters relating to the transactions contemplated
hereby as the Agent may reasonably request;
(e) a certificate (the "Closing Certificate")
substantially in the form of Exhibit I), dated as of the
Closing Date, signed by a principal financial officer of
each of the Borrowers, to the effect that (i) no Default has
occurred and is continuing on the date of the first
Borrowing and (ii) the representations and warranties of the
Borrowers contained in Article V are true on and as of the
date of the first Borrowing hereunder;
(f) all documents which the Agent or any Bank may
reasonably request relating to the existence of the
Borrowers, the corporate authority for and the validity of
this Agreement and the Notes, and any other matters relevant
hereto, all in form and substance satisfactory to the Agent,
including, without limitation, a certificate of each of the
Borrowers substantially in the form of Exhibit J (the
"Officer's Certificate"), signed by the Secretary or an
Assistant Secretary of such Borrower, certifying as to the
names, true signatures and incumbency of the officer or
officers of such Borrower authorized to execute and deliver
the Loan Documents, and certified copies of the following
items: (i) such Borrower's Certificate of Incorporation,
(ii) such Borrower's Bylaws, (iii) a certificate of the
Secretaries of State of the States of Delaware and Georgia
as to the good standing of such Borrower as a Delaware
corporation and as a foreign corporation authorized to do
business in Georgia, respectively, and (iv) the action taken
by the Board of Directors of such Borrower authorizing such
Borrower's execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents to which
such Borrower is a party;
(g) a Notice of Borrowing and a Borrowing Base
Certificate; and
(h) receipt of the facility fee payable for the
account of the Banks pursuant to Section 2.06(b) and of the
servicing fee payable for the account of the Agent pursuant
to Section 2.06(c).
In addition, if either Borrower desires funding of a Euro-Dollar
Loan on the Closing Date, the Agent shall have received, the
requisite number of days prior to the Closing Date, a funding
indemnification letter satisfactory to it, pursuant to which (i)
the Agent and such Borrower shall have agreed upon the interest
rate, amount of Borrowing and Interest Period for such Euro-Dollar
Loan, and (ii) such Borrower shall indemnify the Banks
from any loss or expense arising from the failure to close on the
anticipated Closing Date identified in such letter or the failure
to borrow such Euro-Dollar Loan on such date.
SECTION 4.02. Conditions to All Borrowings. The
obligation of each Bank to make a Syndicated Loan on the occasion
of each Borrowing, or of Wachovia to make a Swing Loan or of the
Agent to issue a Letter of Credit is subject to the satisfaction
of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing or
notice pursuant to Section 3.04(b) of a request for a Letter
of Credit, accompanied by a Letter of Credit Application
Agreement and any other documents required pursuant to
Section 3.03(a).
(b) the fact that, immediately before and after such
Borrowing or Letter of Credit Issuance, as applicable, no
Default shall have occurred and be continuing;
(c) the fact that the representations and warranties
of the Borrowers contained in Article V of this Agreement
shall be true on and as of the date of such Borrowing; and
(d) the fact that, immediately after such Borrowing or
issuance of a Letter of Credit, the conditions set forth in
clauses (i) and (ii) of Section 2.01 shall have been
satisfied.
Each Syndicated Borrowing, each Swing Borrowing and each request
for the issuance of a Letter of Credit hereunder shall be deemed
to be a representation and warranty by the Borrowers on the date
of such Borrowing as to the truth and accuracy of the facts
specified in paragraphs (b), (c) and (d) of this Section.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each of the Borrowers represents and warrants that:
SECTION 5.01. Corporate Existence and Power. Such
Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to transact business in every
jurisdiction where, by the nature of its business, the failure to
qualify could have a Material Adverse Effect, and has all
corporate powers and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted.
SECTION 5.02. Corporate and Governmental Authorization;
No Contravention. The execution, delivery and performance by
such Borrower of this Agreement, the Notes and the other Loan
Documents (i) are within such Borrower's corporate powers, (ii)
have been duly authorized by all necessary corporate action,
(iii) require no action by or in respect of or filing with, any
governmental body, agency or official, (iv) do not contravene, or
constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of
such Borrower or of any agreement, judgment, injunction, order,
decree or other instrument binding upon such Borrower or any of
its Subsidiaries, and (v) do not result in the creation or
imposition of any Lien on any asset of such Borrower or any of
its Subsidiaries.
SECTION 5.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of such Borrower
enforceable in accordance with its terms, and the Notes and the
other Loan Documents executed by such Borrower, when executed and
delivered in accordance with this Agreement, will constitute
valid and binding obligations of such Borrower enforceable in
accordance with their respective terms, provided that the
enforceability hereof and thereof is subject in each case to
general principles of equity and to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights
generally.
SECTION 5.04. Financial Information. (a) The
consolidated balance sheet of the Borrowers and the Consolidated
Subsidiaries as of June 30, 1996 and the related consolidated
statements of income, shareholders' equity and cash flows for the
Fiscal Year then ended, reported on by Deloitte & Touche LLP,
copies of which have been delivered to each of the Banks, and the
unaudited consolidated financial statements of the Borrowers for
the interim period ended December 31, 1996 copies of which have
been delivered to each of the Banks, fairly present, in
conformity with GAAP, the consolidated financial position of the
Borrowers and their Consolidated Subsidiaries as of such dates
and their consolidated results of operations and cash flows for
such periods stated.
(b) Since June 30, 1996 there has been no event, act,
condition or occurrence having a Material Adverse Effect.
SECTION 5.05. No Litigation. There is no action, suit
or proceeding pending, or to the knowledge of such Borrower
threatened, against or affecting the Borrowers or any of the
Subsidiaries before any court or arbitrator or any governmental
body, agency or official which, if adversely determined, could
have a Material Adverse Effect or which in any manner draws into
question the validity of or could impair the ability of the
Borrowers to perform their respective obligations under, this
Agreement, the Notes, the Letter of Credit Application Agreements
or any of the other Loan Documents executed by either of them.
SECTION 5.06. Compliance with ERISA. (a) The Borrowers
and each member of the Controlled Group have fulfilled their
obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of
ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.
(b) Neither of the Borrowers nor any member of the
Controlled Group is or ever has been obligated to contribute to
any Multiemployer Plan.
SECTION 5.07. Compliance with Laws; Payment of Taxes.
The Borrowers and the Subsidiaries are in compliance with all
applicable laws, regulations and similar requirements of
governmental authorities, except where such compliance is being
contested in good faith through appropriate proceedings or where
a failure to comply could not have a Material Adverse Effect.
There have been filed on behalf of the Borrowers and the
Subsidiaries all Federal, state and local income, excise,
property and other tax returns which are required to be filed by
them and all taxes due pursuant to such returns or pursuant to
any assessment received by or on behalf of the Borrowers or any
Subsidiary have been paid. The charges, accruals and reserves on
the books of the Borrowers and the Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the
Borrowers, adequate. United States income tax returns of the
Borrowers and the Subsidiaries have been examined and closed
through the Fiscal Year ended 1993.
SECTION 5.08. Subsidiaries. Each of the Borrowers'
respective Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation, is duly qualified to transact business in every
jurisdiction where, by the nature of its business, failure to
qualify could have a Material Adverse Effect, and has all
corporate powers and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted. The Borrowers have no Subsidiaries except for those
Subsidiaries listed on Schedule 5.08, which accurately sets
forth, by Borrower, each such Subsidiary's complete name and
jurisdiction of incorporation.
SECTION 5.09. Investment Company Act. Neither of the
Borrowers nor any of the Subsidiaries is an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
SECTION 5.10. Public Utility Holding Company Act.
Neither of the Borrowers nor any of the 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" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as
amended.
SECTION 5.11. Ownership of Property; Liens. Each of
the Borrowers and their Consolidated Subsidiaries has title to
its properties sufficient for the conduct of its business, and
none of such property is subject to any Lien except as permitted
in Section 6.18.
SECTION 5.12. No Default. Neither of the Borrowers nor
any of their Consolidated Subsidiaries is in default under or
with respect to any agreement, instrument or undertaking to which
it is a party or by which it or any of its property is bound
which default could have or cause a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
SECTION 5.13. Full Disclosure. All information
heretofore furnished by the Borrowers to the Agent or any Bank
for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information
hereafter furnished by the Borrowers to the Agent or any Bank
will be, true, accurate and complete in every material respect or
based on reasonable estimates on the date as of which such
information is stated or certified. The Borrowers have disclosed
to the Banks in writing any and all facts which could have or
cause a Material Adverse Effect.
SECTION 5.14. Environmental Matters. (a) Neither the
Borrowers nor any Subsidiary is subject to any Environmental
Liability which could have or cause a Material Adverse Effect and
neither the Borrowers nor any Subsidiary has been designated as a
potentially responsible party under CERCLA or under any state
statute similar to CERCLA. None of the Properties has been
identified on any current or proposed (i) National Priorities
List under 40 C.F.R. Paragraph 300, (ii) CERCLIS list or (iii)
any list arising from a state statute similar to CERCLA.
(b) To the Borrowers' knowledge, no Hazardous
Materials have been or are being used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of,
managed or otherwise handled at, or shipped or transported to or
from the Properties or are otherwise present at, on, in or under
the Properties, or, to the best of the knowledge of the
Borrowers, at or from any adjacent site or facility, except for
Hazardous Materials, such as cleaning solvents, pesticides and
other materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed of, managed, or otherwise
handled in minimal amounts in the ordinary course of business in
compliance with all applicable Environmental Requirements.
(c) Each of the Borrowers, and each of the
Subsidiaries and Affiliates, has procured all Environmental
Authorizations necessary for the conduct of its business, and is
in material compliance with all Environmental Requirements in
connection with the operation of the Properties and the
Borrowers', and each of their Subsidiary's and Affiliate's,
respective businesses.
SECTION 5.15. Capital Stock. All Capital Stock,
debentures, bonds, notes and all other securities of the
Borrowers and the Subsidiaries presently issued and outstanding
are validly and properly issued in accordance with all applicable
laws, including, but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws. The issued
shares of Capital Stock of the Borrowers' respective Wholly Owned
Subsidiaries are owned by the Borrowers free and clear of any
Lien or adverse claim. At least a majority of the issued shares
of capital stock of each of each Borrower's other Subsidiaries
(other than Wholly Owned Subsidiaries) is owned by such Borrower
free and clear of any Lien or adverse claim.
SECTION 5.16. Margin Stock. Neither the Borrowers nor
any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of purchasing or carrying
any Margin Stock, and no part of the proceeds of any Loan 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, or be used for any purpose which violates, or which is
inconsistent with, the provisions of Regulation G,T, U or X.
SECTION 5.17. Insolvency. After giving effect to the
execution and delivery of the Loan Documents and the making of
the Loans under this Agreement: (i) neither of the Borrowers will
(x) be "insolvent," within the meaning of such term as used in
O.C.G.A. Paragraph 18-2-22 or as defined in Paragarph 101 of the
"Bankruptcy Code", or Section 2 of either the "UFTA" or the "UFCA",
or as defined or used in any "Other Applicable Law" (as those terms are
defined below), or (y) be unable to pay its debts generally as
such debts become due within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA or Section 6 of the UFCA,
or (z) have an unreasonably small capital to engage in any
business or transaction, whether current or contemplated, within
the meaning of Section 548 of the Bankruptcy Code, Section 4 of
the UFTA or Section 5 of the UFCA; and (ii) the obligations of
the Borrowers under the Loan Documents and with respect to the
Loans will not be rendered avoidable under any Other Applicable
Law. For purposes of this Section 5.17, "Bankruptcy Code" means
Title 11 of the United States Code, "UFTA" means the Uniform
Fraudulent Transfer Act, "UFCA" means the Uniform Fraudulent
Conveyance Act, and "Other Applicable Law" means any other
applicable law pertaining to fraudulent transfers or acts
voidable by creditors, in each case as such law may be amended
from time to time.
SECTION 5.18. Insurance. The Borrowers and each of the
Subsidiaries has (either in the name of such Borrower or in such
Subsidiary's own name), with financially sound and reputable
insurance companies, insurance in at least such amounts and
against at least such risks (including on all its property, and
public liability and worker's compensation) as are usually
insured against in the same general area by companies of
established repute engaged in the same or similar business.
SECTION 5.19. Accounts Receivable. Each item of the
Accounts Receivable arises or will arise under a contract between
a Borrower and the Account Debtor, or from the bona fide sale or
delivery of goods to or performance of services for, the Account
Debtor. Each Borrower has good title to its Accounts Receivable,
and, except as may be required under the HP (US) Agreement, such
Accounts Receivable are free and clear of all Liens thereon, and
no financing statement covering the Accounts Receivable
Collateral is on file in any public office.
SECTION 5.20. Inventory. All of the Inventory of each
Borrower is in the possession and control of such Borrower. Each
Borrower has good title to its Inventory, and, except as may be
required under any the HP (US) Agreement, such Inventory is free
and clear of all Liens thereon, and no financing statement
covering the Inventory is on file in any public office.
ARTICLE VI
COVENANTS
The Borrowers agree that, so long as any Bank has any
Commitment hereunder or any amount payable hereunder or under any
Note remains unpaid:
SECTION 6.01. Information. The Borrowers will deliver
to each of the Banks:
(a) as soon as available and in any event within 90
days after the end of each Fiscal Year, a consolidated
balance sheet of the Borrowers and the Consolidated
Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of income, shareholders'
equity and cash flows for such Fiscal Year, setting forth in
each case in comparative form the figures for the previous
fiscal year, all certified by Deloitte & Touche LLP or other
independent public accountants of nationally recognized
standing, with such certification to be free of exceptions
and qualifications not acceptable to the Required Banks;
(b) as soon as available and in any event within 30
days after the end of each of the first 11 Fiscal Months of
each Fiscal Year, consolidated and consolidating balance
sheets of the Borrowers and the Consolidated Subsidiaries as
of the end of such Fiscal Month and the related statement of
income and statement of cash flows for such Fiscal Month and
for the portion of the Fiscal Year ended at the end of such
Fiscal Month setting forth in each case in comparative form
the figures for the corresponding Fiscal Month and the
corresponding portion of the previous Fiscal Year, all
certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP and consistency by the chief
financial officer or the chief accounting officer of each of
the Borrowers;
(c) simultaneously with the delivery of each set of
financial statements referred to in paragraphs (a) and (b)
above, a certificate, substantially in the form of Exhibit H
(a "Compliance Certificate"), of the chief financial officer
or the chief accounting officer of each of the Borrowers (i)
setting forth in reasonable detail the calculations required
to establish whether the Borrowers were in compliance with
the requirements of Sections 6.05, 6.15, 6.18, and 6.20
through 6.24, inclusive, on the date of such financial
statements and (ii) stating whether any Default exists on
the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action
which the Borrowers are taking or proposes to take with
respect thereto;
(d) simultaneously with the delivery of each set of
annual financial statements referred to in paragraph (a)
above, a statement of the firm of independent public
accountants which reported on such statements to the effect
that nothing has come to their attention to cause them to
believe that any Default existed on the date of such
financial statements;
(e) as soon as practicable, but in any event on or
before 10 days after the end of each Fiscal Month, a status
report, certified by a duly authorized officer of each of
the Borrowers, showing (i) the aggregate dollar value of the
items comprising the Accounts Receivable and the age of each
individual item thereof as of the last day of the preceding
Fiscal Month (segregating such items to show any which are
subject to a Lien under any of the Distributor Agreements,
and otherwise segregating such items in such manner and to
such degree as the Agent may request), (ii) the type, dollar
value and location of the Inventory as at the end of the
preceding Fiscal Month, valued at the lower of cost or
market value (segregating such items to show separately
those which are (x) subject to a Lien under any of the
Distributor Agreements, (y) are the subject of an invoice to
such Borrower from the seller thereof dated more than 90
days prior to the date of such report and (z) were
manufactured more than 365 days prior to the date of such
report) and (iii) the aggregate dollar value of the items
comprising the accounts payable of the Borrowers and the age
of each individual item thereof as of the last day of the
preceding Fiscal Month (segregating such items in such
manner and to such degree as the Agent may request);
(f) simultaneously with each Notice of Borrowing or
request for the issuance of a Letter of Credit plus, at the
end of each calendar week, a Borrowing Base Certificate as
of the date of report submission, certified as to truth and
accuracy by a duly authorized officer of each of the
Borrowers.
(g) within 5 Domestic Business Days after either
Borrower becomes aware of the occurrence of any Default, a
certificate of the chief financial officer or the chief
accounting officer of each of the Borrowers setting forth
the details thereof and the action which the Borrowers are
taking or proposes to take with respect thereto;
(h) promptly upon the mailing thereof to the
shareholders of the Borrowers generally, copies of all
financial statements, reports and proxy statements so
mailed;
(i) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and
any registration statements on Form S-8 or its equivalent)
and annual, quarterly or monthly reports which the Borrowers
shall have filed with the Securities and Exchange
Commission;
(j) if and when any member of the Controlled Group (i)
gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA)
with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy
of the notice of such reportable event given or required to
be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA, a copy
of such notice; or (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate or appoint a
trustee to administer any Plan, a copy of such notice; and
(k) from time to time such additional information
regarding the financial position or business of the
Borrowers and the Subsidiaries as the Agent, at the request
of any Bank, may reasonably request.
SECTION 6.02. Inspection of Property, Books and
Records. The Borrowers will (i) keep, and cause each Subsidiary
to keep, proper books of record and account in which full, true
and correct entries in conformity with GAAP, subject to Section
1.02, shall be made of all dealings and transactions in relation
to its business and activities; and (ii) permit, and cause each
Subsidiary to permit, representatives of any Bank at such Bank's
expense prior to the occurrence of a Default (except as provided
below with respect to field audits) and at the Borrowers' expense
after the occurrence of a Default to visit and inspect any of
their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective
officers, employees and independent public accountants. The
foregoing shall include but not be limited to field audits with
respect to the Accounts and the Inventory, the reasonable and
customary costs of which shall be borne by the Borrowers, whether
or not a Default exists, but, so long as no Default exists, the
Borrowers shall not be obligated to bear expenses for field
audits performed more frequently than once in each Fiscal
Quarter. The Borrowers agree to cooperate and assist in such
visits and inspections, in each case at such reasonable times
during normal business hours and as often as may reasonably be
desired.
SECTION 6.03. Maintenance of Existence and Management.
The Borrowers shall, and shall cause each Subsidiary to, (i)
maintain its corporate existence and carry on its business in
substantially the same manner and in substantially the same
fields as such business is now carried on and maintained and (ii)
maintain Senior Management reasonably acceptable to the Banks in
keeping with their bylaws (and the Banks acknowledge that present
Senior Management is acceptable as of the Closing Date).
SECTION 6.04. Dissolution. Neither the Borrowers nor
any of the Subsidiaries shall suffer or permit dissolution or
liquidation either in whole or in part or redeem or retire any
shares of its own stock or that of any Subsidiary, except through
corporate reorganization to the extent permitted by Section 6.05.
SECTION 6.05. Consolidations, Mergers and Sales of
Assets. The Borrowers will not, nor will it permit any
Subsidiary to, consolidate or merge with or into, or sell, lease
or otherwise transfer all or any substantial part of its assets
to, any other Person, or discontinue or eliminate any business
line or segment, provided that (a) either Borrower may merge with
another Person if (i) such Person was organized under the laws of
the United States of America or one of its states, (ii) such
Borrower is the corporation surviving such merger and (iii)
immediately after giving effect to such merger, no Default shall
have occurred and be continuing, (b) the Borrowers may merge with
one another and Subsidiaries of the Borrowers may merge with one
another, and (c) the foregoing limitation on the sale, lease or
other transfer of assets and on the discontinuation or
elimination of a business line or segment shall not prohibit (A)
transfers of Accounts to insurers permitted by Section 6.26 or
(B) during any Fiscal Quarter, a transfer of assets or the
discontinuance or elimination of a business line or segment (in a
single transaction or in a series of related transactions) unless
the aggregate assets to be so transferred or utilized in a
business line or segment to be so discontinued, when combined
with all other assets transferred, and all other assets utilized
in all other business lines or segments discontinued, during such
Fiscal Quarter and the immediately preceding 3 Fiscal Quarters,
either (x) constituted more than 2% of Consolidated Total Assets
at the end of the most recent Fiscal Year immediately preceding
such Fiscal Quarter, or (y) contributed more than 2% of
Consolidated Operating Profits during the 4 Fiscal Quarters
immediately preceding such Fiscal Quarter.
SECTION 6.06. Use of Proceeds. No portion of the
proceeds of the Loans will be used by the Borrowers or any
Subsidiary (i) in connection with, whether directly or
indirectly, any tender offer for, or other acquisition of, stock
of any corporation with a view towards obtaining control of such
other corporation, unless such tender offer or other acquisition
is to be made on a negotiated basis with the approval of the
Board of Directors of the Person to be acquired, and the
provisions of Section 6.17 would not be violated, (ii) directly
or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any Margin Stock, or (iii)
for any purpose in violation of any applicable law or regulation.
SECTION 6.07. Compliance with Laws; Payment of Taxes.
The Borrowers will, will cause each of the Subsidiaries to and
will use its best effort to cause each member of the Controlled
Group to, comply with applicable laws (including but not limited
to ERISA), regulations and similar requirements of governmental
authorities (including but not limited to PBGC), except where the
necessity of such compliance is being contested in good faith
through appropriate proceedings diligently pursued. The
Borrowers will, and will cause each of the Subsidiaries to, pay
promptly when due all taxes, assessments, governmental charges,
claims for labor, supplies, rent and other obligations which, if
unpaid, might become a lien against the property of the Borrowers
or any Subsidiary, except liabilities being contested in good
faith and against which, if requested by the Agent (acting at the
direction of the Required Banks), the Borrowers will set up
reserves in accordance with GAAP.
SECTION 6.08. Insurance. Each of the Borrowers will
maintain, and will cause each of the Subsidiaries to maintain
(either in the name of such Borrower or in such Subsidiary's own
name), with financially sound and reputable insurance companies,
insurance in at least such amounts and against at least such
risks (including on all its property, and public liability and
worker's compensation) as are usually insured against in the same
general area by companies of established repute engaged in the
same or similar business.
SECTION 6.09. Change in Fiscal Year. The Borrowers
will not change their Fiscal Year without the consent of the
Required Banks.
SECTION 6.10. Maintenance of Property. The Borrowers
shall, and shall cause each Subsidiary to, maintain all of its
properties and assets in good condition, repair and working
order, ordinary wear and tear excepted; provided, that each of
the Borrowers and each of the Subsidiaries may dispose of used,
worn out or obsolete equipment, so long as it obtains such
replacements as are reasonably required for its operations.
SECTION 6.11. Environmental Notices. The Borrowers
shall furnish to the Banks and the Agent prompt written notice of
all Environmental Liabilities, pending, or, to the extent either
of the Borrowers is aware of the same, threatened or anticipated
Environmental Proceedings, Environmental Notices, Environmental
Judgments and Orders, and Environmental Releases at, on, in,
under or in any way affecting the Properties or any adjacent
property which, if adversely determined, could have a Material
Adverse Effect, and all facts, events, or conditions that could
lead to any of the foregoing.
SECTION 6.12. Environmental Matters. The Borrowers and
the Subsidiaries will not, and will not permit any Third Party
to, use, produce, manufacture, process, treat, recycle, generate,
store, dispose of, manage at, or otherwise handle, or ship or
transport to or from the Properties any Hazardous Materials
except for Hazardous Materials such as cleaning solvents,
pesticides and other similar materials used, produced,
manufactured, processed, treated, recycled, generated, stored,
disposed, managed, or otherwise handled in minimal amounts in the
ordinary course of business in compliance with all applicable
Environmental Requirements.
SECTION 6.13. Environmental Release. The Borrowers
agree that upon the occurrence of an Environmental Release at or
on any of the Properties it will act immediately to investigate
the extent of, and to take appropriate remedial action to
eliminate, such Environmental Release, whether or not ordered or
otherwise directed to do so by any Environmental Authority.
SECTION 6.14. Transactions with Affiliates. Neither
the Borrowers nor any of the Subsidiaries shall enter into, or be
a party to, any transaction with any Affiliate of the Borrowers
or such Subsidiary (which Affiliate is not one of the Borrowers
or a Wholly Owned Subsidiary), except as permitted by law and in
the ordinary course of business and pursuant to reasonable terms
which are fully disclosed to the Agent and the Banks, and are no
less favorable to the Borrowers or such Subsidiary than would be
obtained in a comparable arm's length transaction with a Person
which is not an Affiliate.
SECTION 6.15. Restricted Payments. SEC will not
declare or make any Restricted Payment after December 31, 1996,
if the aggregate amount of such Restricted Payments would exceed
25% of cumulative Consolidated Net Income for all fiscal periods
after December 31, 1996; provided that after giving effect to the
payment of any such Restricted Payments, no Default shall be in
existence or be created thereby.
SECTION 6.16. Loans or Advances. Neither the Borrowers
nor any of the Subsidiaries shall make loans or advances to any
Person except as permitted by Section 6.17 and except: (i) loans
or advances to employees not exceeding $250,000 in the aggregate
principal amount outstanding at any time, in each case made in
the ordinary course of business and consistent with practices
existing on December 31, 1996; (ii) deposits required by
government agencies or public utilities; and (iii) loans and
advances from one Borrower to the other; provided that after
giving effect to the making of any loans, advances or deposits
permitted by this Section, and no Default shall be in existence
or be created thereby.
SECTION 6.17. Investments. Neither the Borrowers nor
any of the Subsidiaries shall make Investments in any Person
except as permitted by Section 6.16 and except Investments in (i)
direct obligations of the United States Government maturing
within one year, (ii) certificates of deposit issued by a
commercial bank whose credit is satisfactory to the Agent, (iii)
commercial paper rated A1 or the equivalent thereof by S&P or P1
or the equivalent thereof by Xxxxx'x and in either case maturing
within 6 months after the date of acquisition, (iv) tender bonds
the payment of the principal of and interest on which is fully
supported by a letter of credit issued by a United States bank
whose long-term certificates of deposit are rated at least AA or
the equivalent thereof by S&P and Aa or the equivalent thereof by
Xxxxx'x and/or (v) Investments by SEC in SED; provided, however,
immediately after giving effect to the making of any Investment,
no Default shall have occurred and be continuing.
SECTION 6.18. Priority Debt. Neither the Borrowers nor
any Consolidated Subsidiary will create, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired by
it, and the Borrowers shall not permit any Subsidiary which is
not a Borrower to incur any Debt, except:
(a) Liens existing on the date of this Agreement
securing Debt outstanding on the date of this Agreement,
which are in an aggregate principal amount of $250,000;
(b) any Lien existing on any specific fixed asset of
any corporation at the time such corporation becomes a
Consolidated Subsidiary and not created in contemplation of
such event;
(c) any Lien on any specific fixed asset securing Debt
incurred or assumed for the purpose of financing all or any
part of the cost of acquiring or constructing such asset,
provided that such Lien attaches to such asset concurrently
with or within 18 months after the acquisition or completion
of construction thereof;
(d) any Lien on any specific fixed asset of any
corporation existing at the time such corporation is merged
or consolidated with or into one of the Borrowers or a
Consolidated Subsidiary and not created in contemplation of
such event;
(e) any Lien existing on any specific fixed asset
prior to the acquisition thereof by one of the Borrowers or
a Consolidated Subsidiary and not created in contemplation
of such acquisition;
(f) Liens securing Debt owing by any Subsidiary to one
of the Borrowers;
(g) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any
Lien permitted by any of the foregoing paragraphs of this
Section, provided that (i) such Debt is not secured by any
additional assets, and (ii) the amount of such Debt secured
by any such Lien is not increased;
(h) Liens incidental to the conduct of its business or
the ownership of its assets which (i) do not secure Debt and
(ii) do not in the aggregate materially detract from the
value of its assets or materially impair the use thereof in
the operation of its business;
(i) any Lien on Margin Stock;
(j) Debt owing to the Borrowers or another Subsidiary;
(k) any Lien required under the HP (US) Agreement; and
(l) Liens on a fixed asset which are (i) taken or
retained by the seller of the asset to secure all or part of
its price or (ii) taken by a person who by making advances
or incurring an obligation gives value to enable the
relevant Borrower or Subsidiary to acquire rights in or the
use of such assets, if such value is in fact so used;
provided, that (x) such Liens may not secure any other
indebtedness and (y) the aggregate outstanding principal
amount of all Debt secured by such Liens shall not at any
time exceed $1,000,000.
SECTION 6.19. Restrictions on Ability of Subsidiaries
to Pay Dividends. The Borrowers shall not permit any Subsidiary
to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on
the ability of any such Subsidiary to (i) pay any dividends or
make any other distributions on its Capital Stock or any other
interest or (ii) make or repay any loans or advances to the
Borrowers or the parent of such Subsidiary.
SECTION 6.20. Leverage Ratio. At the end of each
Fiscal Month, the Leverage Ratio shall not at any time exceed:
(i) prior to the receipt, after the Closing Date, of
cumulative Net Proceeds of Capital Stock of $8,000,000 or
more, the ratio set forth below for the periods set forth
below:
Period Leverage Ratio
Closing Date through
March 31, 1997 3.50 to 1.0
April 1, 1997 through
June 30, 1997 3.40 to 1.0
July 1, 1997 through
September 30, 1997 3.30 to 1.0
October 1, 1997 and
thereafter 3.20 to 1.0
(ii) after the receipt, after the Closing Date, of
cumulative Net Proceeds of Capital Stock of $8,000,000 or
more, 2.0 to 1.0.
SECTION 6.21. Fixed Charges Coverage. At the end of
each Fiscal Month, the ratio of Income Available for Fixed
Charges to Consolidated Fixed Charges for the Fiscal Month just
ended and the immediately preceding 11 Fiscal Months shall not
have been less than 3.5 to 1.0.
SECTION 6.22. Adjusted Current Ratio. At the end of
each Fiscal Month, the Adjusted Current Ratio will not at any
time be less than 1.30 to 1.00.
SECTION 6.23. Minimum Consolidated Net Income. At the
end of each Fiscal Quarter, Consolidated Net Income will not at
any time be less than (i) for the Fiscal Quarter just ended and
the immediately preceding 3 Fiscal Quarters, $5,000,000, except
that for the 4 Fiscal Quarters ending December 31, 1997,
Consolidated Net Income will not be less than $6,500,000 and (ii)
for the Fiscal Quarter just ended, $1,000,000.
SECTION 6.24. Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth will at no time be less than
$35,800,000 plus the sum of (i) 100% of the cumulative Reported
Net Income of the Borrowers and the Consolidated Subsidiaries
during any period after the Closing Date (taken as one accounting
period), calculated quarterly at the end of each Fiscal Quarter
but excluding from such calculations of Reported Net Income for
purposes of this clause (i), any Fiscal Quarter in which the
Reported Net Income of the Borrowers and the Consolidated
Subsidiaries is negative, and (ii) 100% of the cumulative Net
Proceeds of Capital Stock received during any period after the
Closing Date, calculated quarterly at the end of each Fiscal
Quarter.
SECTION 6.25. Distributor Agreements. The Borrowers
will comply in all material respects with each of the Distributor
Agreements and, promptly (and in any event within 5 Domestic
Business Days) after the effective date thereof, furnish to each
of the Banks a true and correct copy of each new Distributor
Agreement and each document which extends, renews, amends,
supplements or replaces any Distributor Agreement.
SECTION 6.26. Accounts Receivable. The Borrowers will
not sell or otherwise dispose of any of the Accounts Receivable
without the prior written consent of the Agent (acting at the
direction of the Required Banks) except (i) in the ordinary
course of business for cash or on open account or on terms of
payment ordinarily extended to its customers and (ii) with
respect to Accounts the collectibility of which has been insured,
transfers to the insurers of defaulted Accounts as to which the
insurer has paid or contemporaneously with such transfer is
paying the amount due to the Borrowers under the relevant policy
on account of such defaulted Accounts. The Borrowers will not
allow the Accounts Receivable to be encumbered, except as may be
required pursuant to the HP (US) Agreement. The Borrowers will
promptly notify the Agent and the Banks of any individual return,
repossession, recovery in an amount of $500,000 or more.
Additionally, the Agent may, at any time in its sole discretion,
require the Borrowers to permit the Agent to verify the
individual account balances of the individual Account Debtors
immediately upon its request therefor. In any event, upon
request from the Agent, made at any time hereafter (but not more
frequently than monthly, so long as no Default or Event of
Default is in existence), the Borrowers shall furnish the Agent
with a then current Account Debtor address list.
SECTION 6.27. Inventory. The Borrowers will not sell,
lease, exchange, or otherwise dispose of any of the Inventory
without the prior written consent of the Agent (acting at the
direction of the Required Banks) except in the ordinary course of
business for cash or on open account or on terms of payment
ordinarily extended to its customers or as otherwise may be
required by any of the Distributor Agreements. The Borrowers
will obtain and maintain insurance on the Inventory with such
companies, in such amounts and against such risks as the Agent
may request, consistent with Section 6.08. Such insurance shall
not be cancellable by the Borrowers, unless with the prior
written consent of the Agent (acting at the direction of the
Required Banks), or by the Borrower's insurer, unless with at
least 10 days advance written notice to the Agent. The Borrowers
will pay all taxes and other charges against the Inventory, and
the Borrowers will not use the Inventory illegally or allow the
Inventory to be encumbered, except as may be required pursuant to
the HP (US) Agreement. The Borrowers will not locate the
Inventory at any location other than one under its possession and
control without the prior written consent of the Agent (acting at
the direction of the Required Banks); provided, however, that
nothing contained herein shall be deemed to prohibit the
Borrowers, without notice to or the consent of the Agent, from
transferring temporarily (for periods not to exceed 3 months in
any event) Inventory from a location under its possession and
control to another location at any time or from time to time
hereafter for the limited purpose of having work performed on
such Inventory if done in the ordinary course of the Borrowers'
business.
SECTION 6.28. Additional Debt. Neither of the
Borrowers shall incur or permit to exist any Debt not in
existence on the Closing Date and disclosed in the Borrower's
most recent consolidated financial statements delivered to the
Banks, and extensions or renewals thereof, other than (i) Debt
permitted to be secured by Liens permitted by Section 6.18, (ii)
Debt of the types described in clause (vii) of the definition of
Debt which is incurred in the ordinary course of business in
connection with the sale or purchase of goods or to assure
performance of any obligation to a utility or a governmental
entity or a worker's compensation obligation; (iii) Debt
permitted by Section 6.17; and (iv) other Debt not to exceed an
aggregate amount outstanding at any time of $500,000.
. ARTICLE VII
DEFAULTS
SECTION 7.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be
continuing:
(a) either of the Borrowers shall fail to pay when due
any principal of any Loan or any Reimbursement Obligation,
shall fail to pay any interest on any Loan within 5 Domestic
Business Days after such interest shall become due, or shall
fail to pay any fee or other amount payable hereunder within
5 Domestic Business Days after such fee or other amount
becomes due; or
(b) either of the Borrowers shall fail to observe or
perform any covenant contained in Sections 6.01(g),
6.02(ii), 6.03 through 6.06, inclusive, Sections 6.15
through 6.17, inclusive, or Sections 6.19 through 6.24,
inclusive, or 6.28; or
(c) either of the Borrowers shall fail to observe or
perform any covenant or agreement contained or incorporated
by reference in this Agreement (other than those covered by
paragraph (a) or (b) above) and such failure shall not have
been cured within 30 days after the earlier to occur of (i)
written notice thereof has been given to the Borrowers by
the Agent at the request of any Bank or (ii) either of the
Borrowers otherwise becomes aware of any such failure; or
(d) any representation, warranty, certification or
statement made by either of the Borrowers in Article V of
this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall
prove to have been incorrect or misleading in any material
respect when made (or deemed made); or
(e) either of the Borrowers or any Subsidiary shall
fail to make any payment in respect of Debt in an aggregate
amount outstanding of $500,000 or more (other than the
Notes) when due or within any applicable grace period; or
(f) any event or condition shall occur which results in
the acceleration of the maturity of Debt in an aggregate
amount outstanding of $500,000 or more of either of the
Borrowers or any Subsidiary (including, without limitation,
any required mandatory prepayment or "put" of such Debt to
either of the Borrowers or any Subsidiary) or enables (or,
with the giving of notice or lapse of time or both, would
enable) the holders of such Debt or commitment or any Person
acting on such holders' behalf to accelerate the maturity
thereof or terminate any such commitment (including, without
limitation, any required mandatory prepayment or "put" of
such Debt to either of the Borrowers or any Subsidiary); or
(g) either of the Borrowers or any Subsidiary shall
commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of
creditors, or shall fail generally, or shall admit in
writing its inability, to pay its debts as they become due,
or shall take any corporate action to authorize any of the
foregoing; or
(h) an involuntary case or other proceeding shall be
commenced against either of the Borrowers or any Subsidiary
seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered
against either of the Borrowers or any Subsidiary under the
federal bankruptcy laws as now or hereafter in effect; or
(i) either of the Borrowers or any member of the
Controlled Group shall fail to pay when due any material
amount which it shall have become liable to pay to the PBGC
or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans shall be filed under Title IV of
ERISA by either of the Borrowers, any member of the
Controlled Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate or to cause a trustee
to be appointed to administer any such Plan or Plans or a
proceeding shall be instituted by a fiduciary of any such
Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA
and such proceeding shall not have been dismissed within 30
days thereafter; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated;
or either of the Borrowers or any other member of the
Controlled Group shall enter into, contribute or be
obligated to contribute to, terminate or incur any
withdrawal liability with respect to, a Multiemployer Plan;
or
(j) one or more judgments or orders for the payment of
money in an aggregate amount in excess of $500,000 shall be
rendered against any one, or more or all of the Borrowers
and the Subsidiaries unsatisfied and unstayed for a period
of 30 days; or
(k) a federal tax lien shall be filed against either
of the Borrowers or any Subsidiary under Section 6323 of the
Code or a lien of the PBGC shall be filed against either of
the Borrowers or any Subsidiary under Section 4068 of ERISA
and in either case such lien shall remain undischarged for a
period of 25 days after the date of filing; or
(l) (i) any Person 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) of
20% or more of the outstanding shares of the voting stock of
SEC; or (ii) as of any date a majority of the Board of
Directors of SEC consists of individuals who were not either
(A) directors of SEC as of the corresponding date of the
previous year, (B) selected or nominated to become directors
by the Board of Directors of SEC of which a majority
consisted of individuals described in clause (A), or (C)
selected or nominated to become directors by the Board of
Directors of SEC of which a majority consisted of
individuals described in clause (A) and individuals
described in clause (B).
then, and in every such event, (i) the Agent shall, if requested
by the Required Banks, by notice to the Borrowers terminate the
Commitments and they shall thereupon terminate, (ii) Wachovia may
terminate its obligation to fund Swing Loans, and (iii) the Agent
shall, if requested by the Required Banks, by notice to the
Borrowers declare the Notes, including the Swing Loan Note (in
each case together with accrued interest thereon), and all other
amounts payable hereunder and under the other Loan Documents, to
be, and the Notes, including the Swing Loan Note (in each case
together with accrued interest thereon), and all other amounts
payable hereunder and under the other Loan Documents shall
thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrowers together with interest
at the Default Rate accruing on the principal amount thereof from
and after the date of such Event of Default; provided that if any
Event of Default specified in paragraph (g) or (h) above occurs
with respect to either of the Borrowers, without any notice to
the Borrowers or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Notes, including
the Swing Loan Note (in each case together with accrued interest
thereon) and all other amounts payable hereunder and under the
other Loan Documents shall automatically and without notice
become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by the Borrowers together with interest thereon at the
Default Rate accruing on the principal amount thereof from and
after the date of such Event of Default. In addition, upon the
occurrence of an Event of Default, to the extent of any existing
Letter of Credit Obligations, the Borrowers shall immediately
deposit with the Agent cash collateral in an amount equal to 105%
of the aggregate undrawn amount available under all outstanding
Letters of Credit, which cash collateral shall be set aside as a
collateral reserve for payment of the Reimbursement Obligations
relating to Letters of Credit which are subsequently funded.
After all Letters of Credit have been cancelled and all
Reimbursement Obligations have been satisfied, and the Agent has
been reimbursed all amounts funded by it with respect thereto,
any balance remaining in said collateral reserve may be applied
to other amounts owed by the Borrowers hereunder, and, if none,
shall be remitted to Borrowers. Notwithstanding the foregoing,
the Agent shall have available to it all other remedies at law or
equity, and shall exercise any one or all of them at the request
of the Required Banks.
SECTION 7.02. Notice of Default. The Agent shall give
notice to the Borrowers of any Default under Section 7.01(c)
promptly upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VIII
THE AGENT
SECTION 8.01. Appointment; Powers and Immunities. Each
Bank hereby irrevocably appoints and authorizes the Agent to act
as its agent hereunder and under the other Loan Documents with
such powers as are specifically delegated to the Agent by the
terms hereof and thereof, together with such other powers as are
reasonably incidental thereto. The Agent: (a) shall have no
duties or responsibilities except as expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason
of this Agreement or any other Loan Document be a trustee for any
Bank; (b) shall not be responsible to the Banks for any recitals,
statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or
other document referred to or provided for in, or received by any
Bank under, this Agreement or any other Loan Document, or for the
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or any
other document referred to or provided for herein or therein or
for any failure by either of the Borrowers to perform any of its
obligations hereunder or thereunder; (c) shall not be required to
initiate or conduct any litigation or collection proceedings
hereunder or under any other Loan Document except to the extent
requested by the Required Banks, and then only on terms and
conditions satisfactory to the Agent, and (d) shall not be
responsible for any action taken or omitted to be taken by it
hereunder or under any other Loan Document or any other document
or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross
negligence or wilful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence
or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. The provisions of this Article VIII
are solely for the benefit of the Agent and the Banks, and the
Borrowers shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and
duties under this Agreement and under the other Loan Documents,
the Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the
Borrowers. The duties of the Agent shall be ministerial and
administrative in nature, and the Agent shall not have by reason
of this Agreement or any other Loan Document a fiduciary
relationship in respect of any Bank.
SECTION 8.02. Reliance by Agent. The Agent shall be
entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telecopier,
telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel,
independent accountants or other experts selected by the Agent.
As to any matters not expressly provided for by this Agreement or
any other Loan Document, the Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action
taken or failure to act pursuant thereto shall be binding on all
of the Banks.
SECTION 8.03. Defaults. The Agent shall not be deemed
to have knowledge of the occurrence of a Default or an Event of
Default (other than the nonpayment of principal of or interest on
the Loans) unless the Agent has received notice from a Bank or
either of the Borrowers specifying such Default or Event of
Default and stating that such notice is a "Notice of Default".
In the event that the Agent receives such a notice of the
occurrence of a Default or an Event of Default, the Agent shall
give prompt notice thereof to the Banks. The Agent shall give
each Bank prompt notice of each nonpayment of principal of or
interest on the Loans whether or not it has received any notice
of the occurrence of such nonpayment. The Agent shall (subject
to Section 9.06) take such action hereunder with respect to such
Default or Event of Default as shall be directed by the Required
Banks, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Banks.
SECTION 8.04. Rights of Agent and its Affiliates as a
Bank. With respect to the Loans made by the Agent and any
Affiliate of the Agent, Wachovia in its capacity as a Bank
hereunder and any Affiliate of the Agent or such Affiliate in its
capacity as a Bank hereunder shall have the same rights and
powers hereunder as any other Bank and may exercise the same as
though Wachovia were not acting as the Agent, and the term "Bank"
or "Banks" shall, unless the context otherwise indicates, include
Wachovia in its individual capacity and any Affiliate of the
Agent in its individual capacity. The Agent and any Affiliate of
the Agent may (without having to account therefor to any Bank)
accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with either of the
Borrowers (and any of the Borrowers' Affiliates) as if Wachovia
were not acting as the Agent, and the Agent and any Affiliate of
the Agent may accept fees and other consideration from the
Borrowers (in addition to any agency fees and arrangement fees
heretofore agreed to between the Borrowers and the Agent) for
services in connection with this Agreement or any other Loan
Document or otherwise without having to account for the same to
the Banks.
SECTION 8.05. Indemnification. Each Bank severally
agrees to indemnify the Agent, to the extent the Agent shall not
have been reimbursed by the Borrowers, ratably in accordance with
its Commitment, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any other Loan
Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and
is continuing, the normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or
the enforcement of any of the terms hereof or thereof or any such
other documents; provided that no Bank shall be liable for any of
the foregoing to the extent they arise from the gross negligence
or wilful misconduct of the Agent. If any indemnity furnished to
the Agent for any purpose shall, in the opinion of the Agent, be
insufficient or become impaired, the Agent may call for
additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
SECTION 8.06 Consequential Damages. THE AGENT SHALL
NOT BE RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWERS OR ANY
OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 8.07. Payee of Note Treated as Owner. The
Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice
of the assignment or transfer thereof shall have been filed with
the Agent and the provisions of Section 10.08(c) have been
satisfied. Any requests, authority or consent of any Person who
at the time of making such request or giving such authority or
consent is the holder of any Note shall be conclusive and
binding on any subsequent holder, transferee or assignee of that
Note or of any Note or Notes issued in exchange therefor or
replacement thereof.
SECTION 8.08. Nonreliance on Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance
on the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Borrowers and decision to enter into this
Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents.
The Agent shall not be required to keep itself (or any Bank)
informed as to the performance or observance by the Borrowers of
this Agreement or any of the other Loan Documents or any other
document referred to or provided for herein or therein or to
inspect the properties or books of the Borrowers or any other
Person. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by
the Agent hereunder or under the other Loan Documents, the Agent
shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the affairs,
financial condition or business of the Borrowers or any other
Person (or any of their Affiliates) which may come into the
possession of the Agent.
SECTION 8.09. Failure to Act. Except for action
expressly required of the Agent hereunder or under the other Loan
Documents, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction by the Banks
of their indemnification obligations under Section 8.05 against
any and all liability and expense which may be incurred by the
Agent by reason of taking, continuing to take, or failing to take
any such action.
SECTION 8.10. Resignation or Removal of Agent. Subject
to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by giving notice
thereof to the Banks and the Borrowers and the Agent may be
removed at any time with or without cause by the Required Banks.
Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Required Banks and
shall have accepted such appointment within 30 days after the
retiring Agent's notice of resignation or the Required Banks'
removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent. Any successor
Agent shall be a bank which has a combined capital and surplus of
at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article VII
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
the Agent hereunder.
ARTICLE IX
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 9.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of any
Interest Period:
(a) the Agent determines that deposits in Dollars (in
the applicable amounts) are not being offered in the
relevant market for such Interest Period, or
(b) the Required Banks advise the Agent that the London
Interbank Offered Rate, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of
funding the relevant type of Euro-Dollar Loans for such
Interest Period,
the Agent shall forthwith give notice thereof to the Borrowers
and the Banks, whereupon until the Agent notifies the Borrowers
that the circumstances giving rise to such suspension no longer
exist, the obligations of the Banks to make the type of Euro-Dollar
Loans specified in such notice shall be suspended. Unless
the Borrowers notify the Agent at least 2 Domestic Business Days
before the date of any Borrowing of such type of Euro-Dollar
Loans for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall
instead be made as a Base Rate Borrowing.
SECTION 9.02. Illegality. If, after the date hereof,
the adoption of any applicable law, rule or regulation, or any
change therein or any existing or future law, rule or regulation,
or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof (any
such agency being referred to as an "Authority" and any such
event being referred to as a "Change of Law"), or compliance by
any Bank (or its Lending Office) with any request or directive
(whether or not having the force of law) of any Authority shall
make it unlawful or impossible for any Bank (or its Lending
Office) to make, maintain or fund its Fixed Rate Loans and such
Bank shall so notify the Agent, the Agent shall forthwith give
notice thereof to the other Banks and the Borrowers, whereupon
until such Bank notifies the Borrowers and the Agent that the
circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make such type of Fixed Rate Loans
shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different
Lending Office if such designation will avoid the need for giving
such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall
determine that it may not lawfully continue to maintain and fund
any of its outstanding Fixed Rate Loans to maturity and shall so
specify in such notice, the Borrowers shall immediately prepay in
full the then outstanding principal amount of each Fixed Rate
Loan of such Bank, together with accrued interest thereon and any
amount due such Bank pursuant to Section 9.05(a). Concurrently
with prepaying each such Fixed Rate Loan, the Borrowers shall
borrow a Base Rate Loan in an equal principal amount from such
Bank (on which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of the other
Banks), and such Bank shall make such a Base Rate Loan.
SECTION 9.03. Increased Cost and Reduced Return. (a)
If after the date hereof, a Change of Law or compliance by any
Bank (or its Lending Office) with any request or directive
(whether or not having the force of law) of any Authority:
(i) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but
excluding any such requirement included in an applicable
Euro-Dollar Reserve Percentage) against assets of, deposits
with or for the account of, or credit extended by, any Bank
(or its Lending Office); or
(ii) shall impose on any Bank (or its Lending Office)
or on the United States market for the London interbank
market or any other market used as the basis for any Fixed
Rate Loan any other condition affecting its Fixed Rate
Loans, its Notes or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to
such Bank (or its Lending Office) of making or maintaining any
Loan, or to reduce the amount of any sum received or receivable
by such Bank (or its Lending Office) under this Agreement or
under its Notes with respect thereto, by an amount deemed by such
Bank to be material, then, within 15 days after demand by such
Bank (with a copy to the Agent), the Borrowers shall pay to such
Bank such additional amount or amounts as will compensate such
Bank for such increased cost or reduction; provided, that the
Borrowers shall have no liability for amounts related to periods
earlier than 90 days prior to the date of such written request.
(b) If any Bank shall have determined that after the
date hereof the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof, or
compliance by any Bank (or its Lending Office) with any request
or directive regarding capital adequacy (whether or not having
the force of law) of any Authority, has or would have the effect
of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder to a level below that
which such Bank could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's policies
with respect to capital adequacy) by an amount deemed by such
Bank to be material, then from time to time, within 15 days after
demand by such Bank, the Borrowers shall pay to such Bank such
additional amount or amounts as will compensate such Bank for
such reduction.
(c) Each Bank will promptly notify the Borrowers and
the Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Bank to compensation
pursuant to this Section and will designate a different Lending
Office if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section
and setting forth the additional amount or amounts to be paid to
it hereunder and calculations in reasonable detail with respect
thereto shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) The provisions of this Section 9.03 shall be
applicable with respect to any Participant, Assignee or other
Transferee, and any calculations required by such provisions
shall be made based upon the circumstances of such Participant,
Assignee or other Transferee.
SECTION 9.04. Base Rate Loans or Other Fixed Rate Loans
Substituted for Affected Fixed Rate Loans. If (i) the obligation
of any Bank to make or maintain any type of Fixed Rate Loans has
been suspended pursuant to Section 9.02 or (ii) any Bank has
demanded compensation under Section 9.03, and the Borrowers
shall, by at least 5 Euro-Dollar Business Days' prior notice to
such Bank through the Agent, have elected that the provisions of
this Section shall apply to such Bank, then, unless and until
such Bank notifies the Borrowers that the circumstances giving
rise to such suspension or demand for compensation no longer
apply:
(a) all Loans which would otherwise be made by such
Bank as Offered Rate Loans or Euro-Dollar Loans shall be
made instead either (1) as Base Rate Loans, (2) if such
suspension or demand for compensation relates to Offered
Rate Loans but not Euro-Dollar Loans, as Euro-Dollar Loans,
or (3) if such suspension or demand for compensation relates
to Euro-Dollar Loans but not Offered Rate Loans, as Offered
Rate Loans, and
(b) after each of its Offered Rate Loans or
Euro-Dollar Loans, as the case may be, has been repaid, all
payments of principal which would otherwise be applied to
repay such Fixed Rate Loans shall be applied to repay its
Base Rate Loans instead.
SECTION 9.05. Compensation. Upon the request of any
Bank, delivered to the Borrowers and the Agent, the Borrowers
shall pay to such Bank such amount or amounts as shall compensate
such Bank for any loss, cost or expense incurred by such Bank as
a result of:
(a) any payment or prepayment (pursuant to Section
2.09, 2.10, 7.01, 9.02 or otherwise) of a Fixed Rate Loan on a
date other than the last day of an Interest Period for such Loan;
or
(b) any failure by the Borrowers to prepay a Fixed
Rate Loan on the date for such prepayment specified in the
relevant notice of prepayment hereunder; or
(c) any failure by the Borrowers to borrow a Fixed
Rate Loan on the date for the Fixed Rate Borrowing specified in
the applicable Notice of Borrowing delivered pursuant to Section
2.02;
such compensation to include, without limitation, with respect to
Euro-Dollar Loans, an amount equal to the excess, if any, of (x)
the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from
the date of such payment, prepayment or failure to prepay or
borrow to the last day of the then current Interest Period for
such Euro-Dollar Loan (or, in the case of a failure to prepay or
borrow, the Interest Period for such Euro-Dollar Loan which would
have commenced on the date of such failure to prepay or borrow)
at the applicable rate of interest for such Euro-Dollar Loan
provided for herein over (y) the amount of interest (as
reasonably determined by such Bank) such Bank would have paid on
deposits in Dollars of comparable amounts having terms comparable
to such period placed with it by leading banks in the London
interbank market.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and
other communications to any party hereunder shall be in writing
(including telecopier or similar writing) and shall be given to
such party at its address or telecopier number set forth on the
signature pages hereof or such other address or telecopier number
as such party may hereafter specify for the purpose by notice to
each other party. Each such notice, request or other
communication shall be effective (i) if given by telecopier, when
such telecopy is transmitted to the telecopier number specified
in this Section and the confirmation is received, (ii) if given
by mail, 72 hours after such communication is deposited in the
mail with first class postage prepaid, addressed as aforesaid or
(iii) if given by any other means, when delivered at the address
specified in this Section; provided that notices to the Agent
under Article II or Article X shall not be effective until
received.
SECTION 10.02. No Waivers. No failure or delay by the
Agent or any Bank in exercising any right, power or privilege
hereunder or under any Note or other Loan Document shall operate
as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
SECTION 10.03. Expenses; Documentary Taxes. The
Borrowers shall pay (i) all reasonable out-of-pocket expenses
incurred by the Agent, including reasonable fees and
disbursements of special outside counsel for the Banks and the
Agent, in connection with the preparation of this Agreement and
the other Loan Documents, any waiver or consent hereunder or
thereunder or any amendment hereof or thereof or any Default or
alleged Default hereunder or thereunder and (ii) if a Default
occurs, all reasonable out-of-pocket expenses incurred by the
Agent and the Banks, including reasonable fees and disbursements
of counsel (including allocated costs of inside counsel for any
Bank which does not use outside counsel), in connection with such
Default and collection and other enforcement proceedings
resulting therefrom, including out-of-pocket expenses incurred in
enforcing this Agreement and the other Loan Documents. The
Borrowers shall indemnify the Agent and each Bank against any
transfer taxes, documentary taxes, assessments or charges made by
any Authority by reason of the execution and delivery of this
Agreement or the other Loan Documents.
SECTION 10.04. Indemnification. The Borrowers shall
indemnify the Agent, the Banks and each Affiliate thereof and
their respective directors, officers, employees and agents from,
and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become
subject, insofar as such losses, liabilities, claims or damages
arise out of or result from any actual or proposed use by the
Borrowers of the proceeds of any extension of credit by any Bank
hereunder or breach by either of the Borrowers of this Agreement
or any other Loan Document or from any investigation, litigation
(including, without limitation, any actions taken by the Agent or
any of the Banks to enforce this Agreement or any of the other
Loan Documents) or other proceeding (including, without
limitation, any threatened investigation or proceeding) relating
to the foregoing, and the Borrowers shall reimburse the Agent and
each Bank, and each Affiliate thereof and their respective
directors, officers, employees and agents, upon demand for any
expenses (including, without limitation, legal fees) incurred in
connection with any such investigation or proceeding; but
excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or wilful
misconduct of the Person to be indemnified.
SECTION 10.05. Setoff; Sharing of Setoffs. (a) Each of
the Borrowers hereby grants to the Agent and each Bank a lien for
all indebtedness and obligations owing to them from the Borrowers
upon all deposits or deposit accounts, of any kind, or any
interest in any deposits or deposit accounts thereof, now or
hereafter pledged, mortgaged, transferred or assigned to the
Agent or any such Bank or otherwise in the possession or control
of the Agent or any such Bank for any purpose for the account or
benefit of either of the Borrowers and including any balance of
any deposit account or of any credit of either of the Borrowers
with the Agent or any such Bank, whether now existing or
hereafter established hereby authorizing the Agent and each Bank
at any time or times with or without prior notice to apply such
balances or any part thereof to such of the indebtedness and
obligations owing by either of the Borrowers to the Banks and/or
the Agent then past due and in such amounts as they may elect,
and whether or not the collateral, if any, or the responsibility
of other Persons primarily, secondarily or otherwise liable may
be deemed adequate. For the purposes of this paragraph, all
remittances and property shall be deemed to be in the possession
of the Agent or any such Bank as soon as the same may be put in
transit to it by mail or carrier or by other bailee.
(b) Each Bank agrees that if it shall, by exercising
any right of setoff or counterclaim or resort to collateral
security or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to
the Note held by it which is greater than the proportion received
by any other Bank in respect of the aggregate amount of all
principal and interest owing with respect to the Note held by
such other Bank, the Bank receiving such proportionately greater
payment shall purchase such participations in the Notes held by
the other Banks owing to such other Banks, and such other
adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held
by the Banks owing to such other Banks shall be shared by the
Banks pro rata; provided that (i) nothing in this Section shall
impair the right of any Bank to exercise any right of setoff or
counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrowers other
than its indebtedness under the Notes, and (ii) if all or any
portion of such payment received by the purchasing Bank is
thereafter recovered from such purchasing Bank, such purchase
from each other Bank shall be rescinded and such other Bank shall
repay to the purchasing Bank the purchase price of such
participation to the extent of such recovery together with an
amount equal to such other Bank's ratable share (according to the
proportion of (x) the amount of such other Bank's required
repayment to (y) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable
by the purchasing Bank in respect of the total amount so
recovered. The Borrowers agree, to the fullest extent it may
effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of setoff or
counterclaim and other rights with respect to such participation
as fully as if such holder of a participation were a direct
creditor of the Borrowers in the amount of such participation.
SECTION 10.06. Amendments and Waivers. (a) Any
provision of this Agreement, the Notes or any other Loan
Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrowers
and the Required Banks (and, if the rights or duties of the Agent
are affected thereby, by the Agent); provided that, no such
amendment or waiver shall, unless signed by all Banks, (i) change
the Commitment of any Bank or subject any Bank to any additional
obligation, (ii) change the principal of or rate of interest on
any Loan or any fees (other than fees payable to the Agent)
hereunder, (iii) change the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder, (iv)
change the amount of principal, interest or fees due on any date
fixed for the payment thereof, (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the
Notes, or the percentage of Banks, which shall be required for
the Banks or any of them to take any action under this Section or
any other provision of this Agreement, (vi) change the manner of
application of any payments made under this Agreement or the
Notes, (vii) release or substitute all or any substantial part of
the collateral (if any) held as security for the Loans, or (viii)
release any Guarantee given to support payment of the Loans.
(b) The Borrowers will not solicit, request or
negotiate for or with respect to any proposed waiver or amendment
of any of the provisions of this Agreement unless each Bank shall
be informed thereof by the Borrowers and shall be afforded an
opportunity of considering the same and shall be supplied by the
Borrowers with sufficient information to enable it to make an
informed decision with respect thereto. Executed or true and
correct copies of any waiver or consent effected pursuant to the
provisions of this Agreement shall be delivered by the Borrowers
to each Bank forthwith following the date on which the same shall
have been executed and delivered by the requisite percentage of
Banks. The Borrowers will not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental
or additional interest, fee or otherwise, to any Bank (in its
capacity as such) as consideration for or as an inducement to the
entering into by such Bank of any waiver or amendment of any of
the terms and provisions of this Agreement unless such
remuneration is concurrently paid, on the same terms, ratably to
all such Banks.
SECTION 10.07. No Margin Stock Collateral. Each of the
Banks represents to the Agent and each of the other Banks that it
in good faith is not, directly or indirectly (by negative pledge
or otherwise), relying upon any Margin Stock as collateral in the
extension or maintenance of the credit provided for in this
Agreement.
SECTION 10.08. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns; provided that the Borrowers may not assign or
otherwise transfer any of their respective rights under this
Agreement.
(b) Any Bank may at any time sell to one or more
Persons (each a "Participant") participating interests in any
Loan owing to such Bank, any Note held by such Bank, any
Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations
under this Agreement shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such Bank
shall remain the holder of any such Note for all purposes under
this Agreement, and the Borrowers and the Agent shall continue to
deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. In no event
shall a Bank that sells a participation be obligated to the
Participant to take or refrain from taking any action hereunder
except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree
to (i) the change of any date fixed for the payment of principal
of or interest on the related loan or loans, (ii) the change of
the amount of any principal, interest or fees due on any date
fixed for the payment thereof with respect to the related loan or
loans, (iii) the change of the principal of the related loan or
loans, (iv) any change in the rate at which either interest is
payable thereon or (if the Participant is entitled to any part
thereof) fee is payable hereunder from the rate at which the
Participant is entitled to receive interest or fee (as the case
may be) in respect of such participation, (v) the release or
substitution of all or any substantial part of the collateral (if
any) held as security for the Loans, or (vi) the release of any
Guarantee given to support payment of the Loans. Each Bank
selling a participating interest in any Loan, Note, Commitment or
other interest under this Agreement, within 10 Domestic Business
Days of such sale, shall provide the Borrowers and the Agent with
written notification stating that such sale has occurred and
identifying the Participant and the interest purchased by such
Participant. The Borrowers agree that each Participant shall be
entitled to the benefits of Article IX with respect to its
participation in Loans outstanding from time to time.
(c) Any Bank may at any time assign to one or more
banks or financial institutions (each an "Assignee") all or a
proportionate part of its rights and obligations under this
Agreement, the Notes and the other Loan Documents, and such
Assignee shall assume all such rights and obligations, pursuant
to an Assignment and Acceptance, executed by such Assignee, such
transferor Bank and the Agent (and, in the case of an Assignee
that is not then a Bank, subject to clause (iii) below, by the
Borrowers); provided that (i) no interest may be sold by a Bank
pursuant to this paragraph (c) unless the Assignee shall agree to
assume ratably equivalent portions of the transferor Bank's
Commitment, (ii) if a Bank is assigning only a portion of its
Commitment, then, the amount of the Commitment being assigned
(determined as of the effective date of the assignment) shall be
in an amount not less than $5,000,000, (iii) except during the
continuance of a Default, no interest may be sold by a Bank
pursuant to this paragraph (c) to any Assignee that is not then a
Bank (or an Affiliate of a Bank) without the consent of the
Borrowers and the Agent, which consent shall not be unreasonably
withheld, and (iv) a Bank may not have more than 2 Assignees that
are not then Banks at any one time. Upon (A) execution of the
Assignment and Acceptance by such transferor Bank, such Assignee,
the Agent and (if applicable) the Borrowers, (B) delivery of an
executed copy of the Assignment and Acceptance to the Borrowers
and the Agent, (C) payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, and (D) payment of a
processing and recordation fee of $2,500 to the Agent, such
Assignee shall for all purposes be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank under
this Agreement to the same extent as if it were an original party
hereto with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further
consent or action by the Borrowers, the Banks or the Agent shall
be required. Upon the consummation of any transfer to an
Assignee pursuant to this paragraph (c), the transferor Bank, the
Agent and the Borrowers shall make appropriate arrangements so
that, if required, a new Note is issued to each of such Assignee
and such transferor Bank.
(d) Subject to the provisions of Section 10.09, the
Borrowers authorize each Bank to disclose to any Participant,
Assignee or other transferee (each a "Transferee") and any
prospective Transferee any and all financial information in such
Bank's possession concerning the Borrowers which has been
delivered to such Bank by the Borrowers pursuant to this
Agreement or which has been delivered to such Bank by the
Borrowers in connection with such Bank's credit evaluation prior
to entering into this Agreement.
(e) No Transferee shall be entitled to receive any
greater payment under Section 10.03 than the transferor Bank
would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrowers'
prior written consent or by reason of the provisions of Section
9.02 or 9.03 requiring such Bank to designate a different Lending
Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
(f) Anything in this Section 10.08 to the contrary
notwithstanding, any Bank may assign and pledge all or any
portion of the Loans and/or obligations owing to it to any
Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors of
the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect
of such assigned Loans and/or obligations made by the Borrowers
to the assigning and/or pledging Bank in accordance with the
terms of this Agreement shall satisfy the Borrowers' obligations
hereunder in respect of such assigned Loans and/or obligations to
the extent of such payment. No such assignment shall release the
assigning and/or pledging Bank from its obligations hereunder.
SECTION 10.09. Confidentiality. Each Bank agrees to
exercise commercially reasonable efforts to keep any information
delivered or made available by the Borrowers to it which is
clearly indicated to be confidential information, confidential
from anyone other than persons employed or retained by such Bank
who are or are expected to become engaged in evaluating,
approving, structuring or administering the Loans; provided that
nothing herein shall prevent any Bank from disclosing such
information (i) to any other Bank, (ii) upon the order of any
court or administrative agency, (iii) upon the request or demand
of any regulatory agency or authority having jurisdiction over
such Bank, (iv) which has been publicly disclosed, (v) to the
extent reasonably required in connection with any litigation to
which the Agent, any Bank or their respective Affiliates may be a
party, (vi) to the extent reasonably required in connection with
the exercise of any remedy hereunder, (vii) to such Bank's legal
counsel and independent auditors and (viii) to any actual or
proposed Participant, Assignee or other Transferee of all or part
of its rights hereunder which has agreed in writing to be bound
by the provisions of this Section 10.09; provided that should
disclosure of any such confidential information be required by
virtue of clause (ii) of the immediately preceding sentence, to
the extent permitted by law, any relevant Bank shall promptly
notify the Borrowers of same so as to allow the Borrowers to seek
a protective order or to take any other appropriate action;
provided, further, that, no Bank shall be required to delay
compliance with any directive to disclose any such information so
as to allow the Borrowers to effect any such action.
SECTION 10.10. Representation by Banks. Each Bank
hereby represents that it is a commercial lender or financial
institution which makes loans in the ordinary course of its
business and that it will make its Loans hereunder for its own
account in the ordinary course of such business; provided that,
subject to Section 10.08, the disposition of the Note or Notes
held by that Bank shall at all times be within its exclusive
control.
SECTION 10.11. Obligations Several. The obligations of
each Bank hereunder are several, and no Bank shall be responsible
for the obligations or commitment of any other Bank hereunder.
Nothing contained in this Agreement and no action taken by the
Banks pursuant hereto shall be deemed to constitute the Banks to
be a partnership, an association, a joint venture or any other
kind of entity. The amounts payable at any time hereunder to
each Bank shall be a separate and independent debt, and each Bank
shall be entitled to protect and enforce its rights arising out
of this Agreement or any other Loan Document and it shall not be
necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
SECTION 10.12. Georgia Law. This Agreement and each
Note shall be construed in accordance with and governed by the
law of the State of Georgia.
SECTION 10.13. Severability. In case any one or more
of the provisions contained in this Agreement, the Notes or any
of the other Loan Documents should be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.
SECTION 10.14. Interest. In no event shall the amount
of interest, and all charges, amounts or fees contracted for,
charged or collected pursuant to this Agreement, the Notes or the
other Loan Documents and deemed to be interest under applicable
law (collectively, "Interest") exceed the highest rate of
interest allowed by applicable law (the "Maximum Rate"), and in
the event any such payment is inadvertently received by any Bank,
then the excess sum (the "Excess") shall be credited as a payment
of principal, unless the Borrowers shall notify such Bank in
writing that it elects to have the Excess returned forthwith. It
is the express intent hereof that the Borrowers not pay and the
Banks not receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may legally be paid
by the Borrowers under applicable law. The right to accelerate
maturity of any of the Loans does not include the right to
accelerate any interest that has not otherwise accrued on the
date of such acceleration, and the Agent and the Banks do not
intend to collect any unearned interest in the event of any such
acceleration. All monies paid to the Agent or the Banks
hereunder or under any of the Notes or the other Loan Documents,
whether at maturity or by prepayment, shall be subject to rebate
of unearned interest as and to the extent required by applicable
law. By the execution of this Agreement, the Borrowers covenant,
to the fullest extent permitted by law, that (i) the credit or
return of any Excess shall constitute the acceptance by the
Borrowers of such Excess, and (ii) the Borrowers shall not seek
or pursue any other remedy, legal or equitable , against the
Agent or any Bank, based in whole or in part upon contracting for
charging or receiving any Interest in excess of the Maximum Rate.
For the purpose of determining whether or not any Excess has been
contracted for, charged or received by the Agent or any Bank, all
interest at any time contracted for, charged or received from the
Borrowers in connection with this Agreement, the Notes or any of
the other Loan Documents shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread in
equal parts throughout the full term of the Commitments. The
Borrowers, the Agent and each Bank shall, to the maximum extent
permitted under applicable law, (i) characterize any non-principal
payment as an expense, fee or premium rather than as
Interest and (ii) exclude voluntary prepayments and the effects
thereof. The provisions of this Section shall be deemed to be
incorporated into each Note and each of the other Loan Documents
(whether or not any provision of this Section is referred to
therein). All such Loan Documents and communications relating to
any Interest owed by the Borrowers and all figures set forth
therein shall, for the sole purpose of computing the extent of
obligations hereunder and under the Notes and the other Loan
Documents be automatically recomputed by the Borrowers, and by
any court considering the same, to give effect to the adjustments
or credits required by this Section.
SECTION 10.15. Interpretation. No provision of this
Agreement or any of the other Loan Documents shall be construed
against or interpreted to the disadvantage of any party hereto
by any court or other governmental or judicial authority by
reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 10.16. Waiver of Jury Trial; Consent to
Jurisdiction. Each of the Borrowers (a) and each of the Banks
and the Agent irrevocably waives, to the fullest extent permitted
by law, any and all right to trial by jury in any legal
proceeding arising out of this Agreement, any of the other Loan
Documents, or any of the transactions contemplated hereby or
thereby, (b) submits to the nonexclusive personal jurisdiction in
the State of Georgia, the courts thereof and the United States
District Courts sitting therein, for the enforcement of this
Agreement, the Notes and the other Loan Documents, (c) waives any
and all personal rights under the law of any jurisdiction to
object on any basis (including, without limitation, inconvenience
of forum) to jurisdiction or venue within the State of Georgia
for the purpose of litigation to enforce this Agreement, the
Notes or the other Loan Documents, and (d) agrees that service of
process may be made upon it in the manner prescribed in Section
10.01 for the giving of notice to the Borrowers. Nothing herein
contained, however, shall prevent the Agent from bringing any
action or exercising any rights against any security and against
the Borrowers personally, and against any assets of the
Borrowers, within any other state or jurisdiction.
SECTION 10.17. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
SECTION 10.18. Source of Funds -- ERISA. Each of the
Banks hereby severally (and not jointly) represents to the
Borrowers that no part of the funds to be used by such Bank to
fund the Loans hereunder from time to time constitutes (i) assets
allocated to any separate account maintained by such Bank in
which any employee benefit plan (or its related trust) has any
interest nor (ii) any other assets of any employee benefit plan.
As used in this Section, the terms "employee benefit plan" and
"separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, under seal, by their respective
authorized officers as of the day and year first above written.
SOUTHERN ELECTRONICS
CORPORATION (SEAL)
By:
Title:
SOUTHERN ELECTRONICS
DISTRIBUTORS, INC. (SEAL)
By:
Title:
Southern Electronics Corporation
Southern Electronics Distributors, Inc.
0000 Xxxxx Xxxxx Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx,
Vice President-Finance
Telecopier number: 000-000-0000
Confirmation number: 000-000-0000
COMMITMENTS WACHOVIA BANK OF GEORGIA, N.A.,
as Agent and as a Bank (SEAL)
$37,500,000
By:
Title:
Lending Office
Wachovia Bank of Georgia, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Commercial Group
Telecopier number: 000-000-0000
Confirmation number: 000-000-0000
NATIONAL CITY BANK OF COLUMBUS (SEAL)
$12,500,000 By:
Title:
Lending Office
National City Bank of Columbus
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Vice President
Telecopier number: 000-000-0000
Confirmation number: 000-000-0000
EXHIBIT A-1
SYNDICATED LOAN NOTE
Atlanta, Georgia
January 24, 1997
For value received, SOUTHERN ELECTRONICS CORPORATION
and SOUTHERN ELECTRONICS DISTRIBUTORS, INC., each a Delaware
corporation, jointly and severally (individually and
collectively, as the context shall require, the "Borrowers"),
promise to pay to the order of ___________________________ (the
"Bank"), for the account of its Lending Office, the principal sum
of ___________________________________ AND NO/100 DOLLARS ($
), or such lesser amount as shall equal the unpaid principal
amount of each Syndicated Loan made by the Bank to the Borrowers
pursuant to the Credit Agreement referred to below, on the dates
and in the amounts provided in the Credit Agreement. The
Borrower promises to pay interest on the unpaid principal amount
of this Syndicated Loan Note on the dates and at the rate or
rates provided for in the Credit Agreement. Interest on any
overdue principal of and, to the extent permitted by law, overdue
interest on the principal amount hereof shall bear interest at
the Default Rate, as provided for in the Credit Agreement. All
such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately
available funds at the office of Wachovia Bank of Georgia, N.A.,
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000-0000, or such
other address as may be specified from time to time pursuant to
the Credit Agreement.
All Loans made by the Bank, the respective maturities
thereof, the interest rates from time to time applicable thereto,
and all repayments of the principal thereof shall be recorded by
the Bank and, prior to any transfer hereof, endorsed by the Bank
on the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof; provided that the
failure of the Bank to make any such recordation or endorsement
shall not affect the obligations of the Borrowers hereunder or
under the Credit Agreement.
This Syndicated Loan Note is one of the Syndicated Loan
Notes referred to in the Credit Agreement dated as of January 24,
1997 among the Borrowers, the Banks listed on the signature pages
thereof and Wachovia Bank of Georgia, N.A., as Agent (as the same
may be amended and modified from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit
Agreement for provisions for the optional and mandatory
prepayment and the repayment hereof and the acceleration of the
maturity hereof, as well as the obligation of the Borrower to pay
all costs of collection, including reasonable attorneys fees, in
the event this Syndicated Loan Note is collected by law or
through an attorney at law.
The Borrowers hereby waive presentment, demand,
protest, notice of demand, protest and nonpayment and any other
notice required by law relative hereto, except to the extent as
otherwise may be expressly provided for in the Credit Agreement.
IN WITNESS WHEREOF, the Borrowers have caused this
Syndicated Loan Note to be duly executed, under seal, by their
respective duly authorized officers as of the day and year first
above written.
SOUTHERN ELECTRONICS CORPORATION
(SEAL)
By:
Title:
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
(SEAL)
By:
Title:
Syndicated Loan Note (cont'd)
SYNDICATED LOANS AND PAYMENTS OF PRINCIPAL
Base Rate Amount Amount of
or Euro- of Principal Maturity Notation
Date Dollar Loan Loan Repaid Date Made By
EXHIBIT A-2
SWING LOAN NOTE
Atlanta, Georgia
January 24, 1997
For value received, SOUTHERN ELECTRONICS CORPORATION and
SOUTHERN ELECTRONICS DISTRIBUTORS, INC., each a Delaware
corporation, jointly and severally (individually and
collectively, as the context shall require, the "Borrowers"),
promise to pay to the order of WACHOVIA BANK OF GEORGIA, N.A., a
national banking association (the "Bank"), for the account of its
Lending Office, the principal sum of ONE MILLION and No/100
Dollars ($1,000,000), or such lesser amount as shall equal the
unpaid principal amount of each Swing Loan made by the Bank to
the Borrowers pursuant to the Credit Agreement referred to below,
on the dates and in the amounts provided in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal
amount of this Swing Loan Note at the rate provided for Base Rate
Loans on the dates provided for in the Credit Agreement.
Interest on any overdue principal of and, to the extent permitted
by law, overdue interest on the principal amount hereof shall
bear interest at the Default Rate, as provided for in the Credit
Agreement. All such payments of principal and interest shall be
made in lawful money of the United States in Federal or other
immediately available funds at the office of Wachovia Bank of
Georgia, N.A., 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx
00000-0000, or such other address as may be specified from time
to time pursuant to the Credit Agreement.
All Swing Loans made by the Bank, the respective
maturities thereof, and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Credit Agreement.
This Swing Loan Note is the Swing Loan Note referred to
in the Credit Agreement dated as of even date herewith among the
Borrowers, the Banks listed on the signature pages thereof and
Wachovia Bank of Georgia, N.A., as Agent (as the same may be
amended and modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein with the
same meanings. Reference is made to the Credit Agreement for
provisions for the optional and mandatory prepayment and the
repayment hereof and the acceleration of the maturity hereof.
IN WITNESS WHEREOF, the Borrowers have caused this Swing
Loan Note to be duly executed, under seal, by their respective
duly authorized officers as of the day and year first above
written.
SOUTHERN ELECTRONICS CORPORATION
(SEAL)
By:
Title:
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
(SEAL)
By:
Title:
Swing Loan Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount Amount of
of Principal Maturity Notation
Date Loan Repaid Date Made By
EXHIBIT B
OPINION OF LONG, XXXXXXXX & XXXXXX
SPECIAL COUNSEL FOR THE BORROWERS
[Dated as provided in
Section 4.01 of the Credit
Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Commercial Group
Dear Sirs:
We have acted as counsel for Southern Electronics
Corporation and Southern Electronics Distributors, Inc., each a
Delaware corporation (individually and collectively, as the
context requires, the "Borrowers") in connection with the Credit
Agreement (the "Credit Agreement") dated as of January 24, 1997,
among the Borrowers, the banks listed on the signature pages
thereof and Wachovia Bank of Georgia, N.A., as Agent. Terms
defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact
and law as we have deemed necessary or advisable for purposes of
this opinion. We have assumed for purposes of our opinions set
forth below that the execution and delivery of the Credit
Agreement by each Bank and by the Agent have been duly authorized
by each Bank and by the Agent.
Upon the basis of the foregoing, we are of the opinion
that:
1. Each of the Borrowers is a corporation duly
incorporated, validly existing and in good standing under the
laws of Delaware and has all corporate powers required to carry
on its business as now conducted.
2. The execution, delivery and performance by the
Borrowers of the Credit Agreement, the Notes and the Letter of
Credit Application Agreements (i) are within each Borrower's
corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) require no action by or in respect of,
or filing with, any governmental body, agency or official, (iv)
do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of
incorporation or by-laws of either Borrower or of any agreement,
judgment, injunction, order, decree or other instrument which to
our knowledge is binding upon either Borrower and (v) to our
knowledge, except as provided in the Credit Agreement, do not
result in the creation or imposition of any Lien on any asset of
either Borrower or any of the Subsidiaries.
3. The Credit Agreement and the Notes constitute, and
upon execution and delivery thereof, each Letter of Credit
Application Agreement will constitute, a valid and binding
agreement of each Borrower which is a party thereto, enforceable
against such Borrower in accordance with its terms, except as
such enforceability may be limited by: (i) bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity.
4. To our knowledge, there is no action, suit or
proceeding pending, or threatened, against or affecting either of
the Borrowers or any of the Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which
could materially adversely affect the business, consolidated
financial position or consolidated results of operations of the
Borrowers and the Consolidated Subsidiaries, considered as a
whole, or which in any manner questions the validity or
enforceability of the Credit Agreement, any Note or any Letter of
Credit Application Agreement.
5. Each of the Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted.
6. Neither of the Borrowers nor any of the
Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
7. Neither of the Borrowers nor any of the
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" of a "holding company", as such terms
are defined in the Public Utility Holding Company Act of 1935, as
amended.
We are qualified to practice in the State of Georgia and do
not purport to be experts on any laws other than the laws of the
United States and the State of Georgia and the General
Corporation Law of Delaware and this opinion is rendered only
with respect to such laws. We have made no independent
investigation of the laws of any other jurisdiction.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you,
any Assignee, Participant or other Transferee under the Credit
Agreement, and Xxxxx, Day, Xxxxxx & Xxxxx without our prior
written consent.
Very truly yours,
EXHIBIT C
OPINION OF
XXXXX, DAY, XXXXXX & XXXXX, SPECIAL COUNSEL
FOR THE AGENT
[Dated as provided in
Section 4.01 of the Credit
Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Commercial Group
Dear Sirs:
We have participated in the preparation of the Credit
Agreement (the "Credit Agreement") dated as of January 24, 1997,
among Southern Electronics Corporation and Southern Electronics
Distributors, Inc., each a Delaware corporation (individually and
collectively, as the context requires, the "Borrowers"), the
banks listed on the signature pages thereof (the "Banks") and
Wachovia Bank of Georgia, N.A., as Agent (the "Agent"), and have
acted as special counsel for the Agent for the purpose of
rendering this opinion pursuant to Section 4.01(d) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein
as therein defined.
This opinion letter is limited by, and is in accordance
with, the January 1, 1992 edition of the Interpretive Standards
applicable to Legal Opinions to Third Parties in Corporate
Transactions adopted by the Legal Opinion Committee of the
Corporate and Banking Law Section of the State Bar of Georgia
which Interpretive Standards are incorporated herein by this
reference.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact
and law as we have deemed necessary or advisable for purposes of
this opinion.
Upon the basis of the foregoing, and assuming the due
authorization, execution and delivery of the Credit Agreement,
each of the Notes and each of the Letter of Credit Application
Agreements by or on behalf of the Borrowers, we are of the
opinion that the Credit Agreement and the Notes constitute, and
upon execution and delivery thereof, each Letter of Credit
Application Agreement will constitute, a valid and binding
obligations of each Borrower which is a party thereto, in each
case enforceable in accordance with its terms except as: (i) the
enforceability thereof may be affected by bankruptcy, insolvency,
reorganization, fraudulent conveyance, voidable preference,
moratorium or similar laws applicable to creditors' rights or the
collection of debtors' obligations generally; (ii) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability; and
(iii) the enforceability of certain of the remedial, waiver and
other provisions of the Credit Agreement and the Notes may be
further limited by the laws of the State of Georgia; provided
that such additional laws do not, in our opinion, substantially
interfere with the practical realization of the benefits
expressed in the Credit Agreement, the Notes and the Letter of
Credit Application Agreements, except for the economic
consequences of any procedural delay which may result from such
laws.
In giving the foregoing opinion, we express no opinion as to
the effect (if any) of any law of any jurisdiction except the
State of Georgia and the General Corporation Law of Delaware. We
express no opinion as to the effect of the compliance or
noncompliance of the Agent or any of the Banks with any state or
federal laws or regulations applicable to the Agent or any of the
Banks by reason of the legal or regulatory status or the nature
of the business of the Agent or any of the Banks.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you
and any Assignee, Participant or other Transferee under the
Credit Agreement without our prior written consent.
Very truly yours,
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE
Dated , 19
Reference is made to the Credit Agreement dated as of
January 24, 1997 (together with all amendments and modifications
thereto, the "Credit Agreement") among Southern Electronics
Corporation and Southern Electronics Distributors, Inc., each a
Delaware corporation (individually and collectively, as the
context shall require, the "Borrowers"), the Banks (as defined in
the Credit Agreement) and Wachovia Bank of Georgia, N.A., as
Agent (the "Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.
_______________________________________________________ (the
"Assignor") and ________________________________________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, without recourse to the Assignor, and the Assignee
hereby purchases and assumes from the Assignor, a ______%
interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the Effective Date (as defined
below) (including, without limitation, a _____% interest (which
on the Effective Date hereof is $__________) in the Assignor's
Commitment and a ______ interest (which on the Effective Date
hereof is $_______________) in the Syndicated Loans [and Swing
Loans] owing to the Assignor and a ___% interest in the Note[s]
held by the Assignor (which on the Effective Date hereof is
$__________).
2. The Assignor (i) makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
the Credit Agreement or any other instrument or document
furnished pursuant thereto, other than that it is the legal and
beneficial owner of the interest being assigned by it hereunder,
that such interest is free and clear of any adverse claim and
that as of the date hereof its Commitment (without giving effect
to assignments thereof which have not yet become effective) is
$__________ and the aggregate outstanding principal amount of
Syndicated Loans [and Swing Loans] owing to it (without giving
effect to assignments thereof which have not yet become
effective) is $ ________________; (ii) makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Borrowers or the performance or
observance by the Borrowers of any of their obligations under the
Credit Agreement or any other instrument or document furnished
pursuant thereto; and (iii) attaches the Note[s] referred to in
paragraph 1 above and requests that the Agent exchange such
Note[s] for [a new Syndicated Loan Note from each Borrower dated
_____________, ____ in the principal amount of $__________
payable to the order of the Assignee and a new Swing Loan Note
from each Borrower dated ___________, ____ in the principal
amount of $______________ payable to the order of the Assignee]
[new Notes as follows: a (i) Syndicated Loan Note from each
Borrower dated _______________ , ____ in the principal amount of
$_____________ payable to the order of the Assignor (ii)
Syndicated Loan Note from each Borrower dated ____________ , ___
in the principal amount of $______________ payable to the order
of the Assignee, and (iii) and a new Swing Loan Note from each
Borrower dated ___________, ____ in the principal amount of
$______________ payable to the order of the Assignee].
3. The Assignee (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 5.04(a) (or any more
recent financial statements of the Borrowers delivered pursuant
to Section 6.01(a) or (b)) and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Bank 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 the Credit Agreement; (iii) confirms that
it is a bank or financial institution; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank; (vi) specifies as its
Lending Office (and address for notices) the office set forth
beneath its name on the signature pages hereof, (vii) represents
and warrants that the execution, delivery and performance of this
Assignment and Acceptance are within its corporate powers and
have been duly authorized by all necessary corporate action,
(viii) makes the representation and warranty contained in Section
10.18 of the Credit Agreement[, and (ix) attaches the forms
prescribed by the Internal Revenue Service of the United States
certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the
Credit Agreement and the Notes or such other documents as are
necessary to indicate that all such payments are subject to such
taxes at a rate reduced by an applicable tax treaty].
4. The Effective Date for this Assignment and
Acceptance shall be __________, 19__ (the "Effective Date").
Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for execution and acceptance by
the Agent and [if required by the Credit Agreement] to the
Borrowers for execution by the Borrowers.
5. Upon such execution and acceptance by the Agent [and
execution by the Borrowers] [If required by the Credit
Agreement], from and after the Effective Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent
rights and obligations have been transferred to it by this
Assignment and Acceptance, have the rights and obligations of a
Bank thereunder and (ii) the Assignor shall, to the extent its
rights and obligations have been transferred to the Assignee by
this Assignment and Acceptance, relinquish its rights (other than
under Sections 8.03, 9.03 and 9.04 of the Credit Agreement) and
be released from its obligations under the Credit Agreement.
6. Upon such execution and acceptance by the Agent [and
execution by the Borrowers] [If required by the Credit
Agreement], from and after the Effective Date, the Agent shall
make all payments in respect of the interest assigned hereby to
the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to such
acceptance by the Agent directly between themselves.
7. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the laws of the State of
Georgia.
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
Lending Office:
[Address]
WACHOVIA BANK OF GEORGIA, N.A.,
As Agent
By:
Title:
SOUTHERN ELECTRONICS CORPORATION
If required by the Credit Agreement
By:
Title:
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
If required by the Credit Agreement
By:
Title:
EXHIBIT E
NOTICE OF BORROWING
___________________, 199_
Wachovia Bank of Georgia, N.A., as Agent
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Commercial Group
Re: Credit Agreement (as amended and modified from time to
time, the "Credit Agreement") dated as of January 24,
1997 by and among Southern Electronics Corporation and
Southern Electronics Distributors, Inc., as the
Borrowers, the Banks from time to time parties thereto,
and Wachovia Bank of Georgia, N.A., as Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used
herein shall have the meanings attributable thereto in the Credit
Agreement.
This Notice of Borrowing is delivered to you pursuant to
Section 2.02 of the Credit Agreement.
The undersigned Borrower hereby requests a [Euro-Dollar
Borrowing] [Swing Borrowing] [Syndicated Borrowing which is a
Base Rate Borrowing] in the aggregate principal amount of $_______
to be made on ______________, 199_ , and for interest to
accrue thereon at the rate established by the Credit Agreement
for [Euro-Dollar Loans] [Base Rate Loans] [Offered Rate Loans].
The duration of the Interest Period with respect thereto shall be
[1 month] [2 months] [3 months] [6 months] [30 days] [60 days]
[90 days].
The amount available to be borrowed under Section 2.01 of
the Credit Agreement, net of amounts to be paid with the proceeds
of this Borrowing, is as follows:
(a) Aggregate Commitments $___________
(b) Borrowing Base per most recent
Borrowing Base Certificate $___________
(c) Principal amount outstanding under
Syndicated Loans $___________
(d) Principal amount outstanding under
Swing Loans $___________
(e) Aggregate outstanding principal amount
of Letter of Credit Obligations $___________
(f) Amount available to be borrowed
(lesser of: (a); or sum of (b), less
(c) less (d) less (e) $___________
The undersigned Borrower has caused this Notice of Borrowing
to be executed and delivered by its duly authorized officer this
_____ day of ___________, 199__.
[SOUTHERN ELECTRONICS CORPORATION]
[SOUTHERN ELECTRONICS DISTRIBUTORS, INC.]
By:
Title:
EXHIBIT F
FORM OF BORROWING BASE CERTIFICATE
Reference is made to the Credit Agreement dated as of
January 24, 1997 (as modified and supplemented and in effect from
time to time, the "Credit Agreement") among Southern Electronics
Corporation and Southern Electronics Distributors, Inc., as
Borrowers, the Banks from time to time parties thereto, and
Wachovia Bank of Georgia, N.A., as Agent. Capitalized terms used
herein shall have the meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section [2.02][3.04(b)][6.01(f)] of the
Credit Agreement,________________, the duly authorized
_______________________ of Southern Electronics Corporation, and
_________________, the duly authorized _______________________ of
Southern Electronics Distributors, Inc., hereby (i) certify to
the Agent and the Banks that the calculation of the Borrowing
Base contained in this Borrowing Base Certificate is true,
accurate and complete in all material respects as of __________,
199_ (the "Reporting Date"). The calculation of the Borrowing
Base is as follows:
A. Accounts:
1. Face Amount of all Accounts Receivable $__________
2. Accounts more than 60 days past due $__________
3. Accounts more than 90 days past invoice date $__________
4. Accounts owing by any affiliated Account
Debtor $__________
5. Accounts owing by any Account Debtor having
50% or more ineligible Accounts $__________
6. Accounts subject to Assignment of Claims
Acts, without satisfaction of requirements $__________
7. Amount by which Accounts owing by any
Account Debtor exceed 10% of a Borrower's
total accounts $__________
8. Accounts owing by non-U.S. Account Debtors
not secured by acceptable letter of credit $__________
9. Accounts subject to a Lien under Distributor
Agreements or otherwise $__________
10. Accounts otherwise excluded by Agent $__________
Eligible Accounts (1 less sum of 2 through 10) $__________
B. Inventory:
1. Aggregate Inventory (lower of cost or market) $__________
2. Inventory invoiced from seller more than
90 days prior to Reporting Date $__________
3. Inventory manufactured more than 365
days prior to Reporting Date $__________
4. Inventory subject to a Lien under any
Distributor Agreements or otherwise $__________
5. Inventory otherwise excluded by Agent $__________
Eligible Inventory (1 less sum of 2 through 5) $__________
C. Borrowing Base:
1. Eligible Accounts per A $__________
2. [75%] of 1 $__________
3. Eligible Inventory per B $__________
4. [40%] of 3 $__________
BORROWING BASE (sum of 2 plus 4 $__________
SOUTHERN ELECTRONICS CORPORATION
By:
Title:
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
By:
Title:
EXHIBIT G
FORM OF NOTICE
IN RESPECT OF ISSUANCE OF LETTERS OF CREDIT
TO: The Banks under that certain Credit Agreement, dated as of
January 24, 1997 ("Credit Agreement"), among Southern
Electronics Corporation and Southern Electronics
Distributors, Inc., as the Borrowers, the Banks parties
thereto and Wachovia Bank of Georgia, N.A., as Agent
("Agent").
Pursuant to Section 3.04(b) of the Credit Agreement,
the Agent hereby certifies to the Banks that it has issued the
following Letters of Credit pursuant to Article III of the Credit
Agreement:
Face Date of
Number Amount Issuance/Expiration Beneficiary Purpose
A copy of each of the Letters of Credit listed above
has been attached hereto.
Unless otherwise defined herein, terms defined in the
Credit Agreement shall have the same meaning in this notice.
Date: ________________, 19__.
WACHOVIA BANK OF GEORGIA, N.A.
By:
Name:
Title:
Enclosures
EXHIBIT H
COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement dated as of
January 24, 1997 (as modified and supplemented and in effect from
time to time, the "Credit Agreement") among Southern Electronics
Corporation and Southern Electronics Distributors, Inc., as
Borrowers, the Banks from time to time parties thereto, and
Wachovia Bank of Georgia, N.A., as Agent. Capitalized terms used
herein shall have the meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 6.01(c) of the Credit Agreement,
_______________, the duly authorized ____________________ of
Southern Electronics Corporation and ____________________, the
duly authorized _____________________ of Southern Electronics
Distributors, Inc, hereby certify to the Agent and the Banks that
the information contained in the Compliance Check List attached
hereto is true, accurate and complete as of ____________________
______________, 199_, and that no Default is in existence on and
as of the date hereof.
SOUTHERN ELECTRONICS CORPORATION
By:
Title:
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
By:
Title:
COMPLIANCE CHECK LIST
SOUTHERN ELECTRONICS CORPORATION
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
________________,_____
1. Consolidations, Mergers and Sales of Assets. (Section 6.05.)
The Borrowers will not, nor will it permit any Subsidiary to,
consolidate or merge with or into, or sell, lease or
otherwise transfer all or any substantial part of its assets
to, any other Person, or discontinue or eliminate any
business line or segment, provided that (a) either Borrower
may merge with another Person if (i) such Person was
organized under the laws of the United States of America or
one of its states, (ii) such Borrower is the corporation
surviving such merger and (iii) immediately after giving
effect to such merger, no Default shall have occurred and be
continuing, (b) the Borrowers may merge with one another and
Subsidiaries of the Borrowers may merge with one another, and
(c) the foregoing limitation on the sale, lease or other
transfer of assets and on the discontinuation or elimination
of a business line or segment shall not prohibit (A)
transfers of Accounts to insurers permitted by Section 6.26
or (B) during any Fiscal Quarter, a transfer of assets or the
discontinuance or elimination of a business line or segment
(in a single transaction or in a series of related
transactions) unless the aggregate assets to be so
transferred or utilized in a business line or segment to be
so discontinued, when combined with all other assets
transferred, and all other assets utilized in all other
business lines or segments discontinued, during such Fiscal
Quarter and the immediately preceding 3 Fiscal Quarters,
either (x) constituted more than ___% of Consolidated Total
Assets at the end of the most recent Fiscal Year immediately
preceding such Fiscal Quarter, or (y) contributed more than
__% of Consolidated Operating Profits during the 4 Fiscal
Quarters immediately preceding such Fiscal Quarter.
(a) Value of assets transferred or business
lines or segments discontinued $______
(b) Consolidated Total Assets $______
(c) % of (b) $______
(d) Consolidated Operating Profits - Schedule 1 $______
(e) % of (d) $______
Limitation (a) not to exceed (c) or (e)
2. Restricted Payments (Section 6.15)
SEC will not declare or make any Restricted Payment after
December 31, 1996, if the aggregate amount of such Restricted
Payments would exceed 25% of cumulative Consolidated Net
Income for all fiscal periods after December 31, 1996;
provided that after giving effect to the payment of any such
Restricted Payments, no Default shall be in existence or be
created thereby.
(a) Restricted Payments after
December 31, 1996 $______
(b) cumulative Consolidated Net Income
after December 31, 1996 $______
(c) 25% of (b) $______
Limitation (a) may not exceed (c)
3. Priority Debt (Section 6.18)
None of the Borrowers' nor any Consolidated Subsidiary's
property is subject to any Lien securing Debt, except for:
Description of Lien and Property Amount of Debt
subject to same Secured
a. ___________________________ $_____________
b. ___________________________ $_____________
c. ___________________________ $_____________
d. ___________________________ $_____________
e. ___________________________ $_____________
f. ___________________________ $_____________
g. ___________________________ $_____________
Total $_____________
Aggregate Debt secured by purchase
money Liens permitted by
Section 6.18(l) $_____________
Limitation: $1,000,000
4. Leverage Ratio (Section 6.20)
At the end of each Fiscal Month, the Leverage Ratio shall not
at any time exceed:
(i) prior to the receipt, after the Closing Date, of
cumulative Net Proceeds of Capital Stock of $8,000,000 or
more, the ratio set forth below for the periods set forth
below:
Period Leverage Ratio
Closing Date through
March 31, 1997 3.50 to 1.0
April 1, 1997 through
June 30, 1997 3.40 to 1.0
July 1, 1997 through
September 30, 1997 3.30 to 1.0
October 1, 1997 and
thereafter 3.20 to 1.0
(ii) after the receipt, after the Closing Date, of
cumulative Net Proceeds of Capital Stock of $8,000,000 or
more, 2.0 to 1.0.
(a) Consolidated Liabilities - Schedule 3 $__________
(b) Consolidated Tangible Net
Worth - Schedule 4 $__________
(c) sum of (a) plus (b) $__________
Actual Ratio of (a) to (c)
Maximum Ratio [3.50 to 1.0]
[3.40 to 1.0]
[3.30 to 1.0]
[3.20 to 1.0]
[2.0 to 1.0]
5. Fixed Charges Coverage (Section 6.21)
At the end of each Fiscal Month, the ratio of Income
Available for Fixed Charges to Consolidated Fixed Charges for
the Fiscal Month just ended and the immediately preceding 11
Fiscal Months shall not have been less than 3.5 to 1.0.
(a) Income Available for Fixed
Charges - Schedule 2 $_________
(b) Consolidated Interest
Expense - Schedule 2 $_________
(c) operating leases and rentals - Schedule 2 $_________
(d) sum of (b) plus (c) $_________
Ratio of (a) to (d) ______ to 1.0
Requirement [GREATER THAN/LESS THAN] 3.5 to 1.0
6. Adjusted Current Ratio (Section 6.22)
At the end of each Fiscal Month, the Adjusted Current Ratio
will not at any time be less than 1.30 to 1.00.
(a) Aggregate Accounts Receivable $_____
(b) Aggregate Inventory $_____
(c) sum of (a) and (b) $_____
(d) Principal amount outstanding under
Syndicated Loans $_____
(e) Principal amount outstanding under
Swing Loans $_____
(f) Aggregate outstanding principal amount
of Letter of Credit Obligations $_____
(g) Aggregate accounts payable $_____
(h) sum of (d) plus (e) plus (f) plus (g) $_____
(i) ratio of (c) to (h) _____ to 1.0
Limitation 1.30 to 1.0
7. Minimum Consolidated Net Income (Section 6.23)
At the end of each Fiscal Quarter, Consolidated Net Income
will not at any time be less than (i) for the Fiscal Quarter
just ended and the immediately preceding 3 Fiscal Quarters,
$5,000,000, except that for the 4 Fiscal Quarters ending
December 31, 1997, Consolidated Net Income will not be less
than $6,500,000 and (ii) for the Fiscal Quarter just ended,
$1,000,000.
(a) Consolidated Net Income for Fiscal
Quarter just ended - Schedule 2 $_____
(b) Consolidated Net Income for immediately
preceding 3 Fiscal Quarters - Schedule 2 $_____
(c) sum of (a) and (b) $_____
Limitations: (a) may not be less than $1,000,000
(c) may not be less than [$5,000,000]
[$6,500,000]
8. Minimum Consolidated Tangible Net Worth (Section 6.24)
Consolidated Tangible Net Worth will at no time be less than
$35,800,000 plus the sum of (i) 100% of the cumulative
Reported Net Income of the Borrowers and the Consolidated
Subsidiaries during any period after the Closing Date (taken
as one accounting period), calculated quarterly at the end of
each Fiscal Quarter but excluding from such calculations of
Reported Net Income for purposes of this clause (i), any
Fiscal Quarter in which the Reported Net Income of the
Borrowers and the Consolidated Subsidiaries is negative, and
(ii) 100% of the cumulative Net Proceeds of Capital Stock
received during any period after the Closing Date, calculated
quarterly at the end of each Fiscal Quarter.
(a) $35,800,000
(b) positive Reported Net Income
after January 24, 1997 $_____
(c) cumulative Net Proceeds of Capital
Stock received after January 24, 1997 $_____
Actual Consolidated Tangible
Net Worth - Schedule 4 $_____
Required Consolidated Tangible Net
Worth (sum of (a) plus (b) plus (c) $_____
COMPLIANCE CHECK LIST
SOUTHERN ELECTRONICS CORPORATION
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
Schedule 1
Consolidated Operating Profits
Consolidated Operating Profits
__ quarter 199__ $_____
__ quarter 199__ $_____
__ quarter 199__ $_____
__ quarter 199__ $_____
Total $_____
COMPLIANCE CHECK LIST
SOUTHERN ELECTRONICS CORPORATION
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
Schedule 2
Income Available for Fixed Charges
Consolidated Net Income for:
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
Total $______
Income taxes for:
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
Total $______
Depreciation expense for:
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
Total $______
Amortization expense for:
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
Total $______
Current Maturities of Long-Term Debt for:
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
Total $______
Capital Expenditures for:
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
Total $______
Consolidated Interest Expense for:
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
Total $______
Operating Leases and Rentals for:
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
__ quarter 199__ $______
Total $______
Total Income Available for Fixed Charges $______
COMPLIANCE CHECK LIST
SOUTHERN ELECTRONICS CORPORATION
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
Schedule 3
Consolidated Liabilities
INTEREST
RATE MATURITY TOTAL
Secured
______________ ___ ___ $___
______________ ___ ___ $___
______________ ___ ___ $___
______________ ___ ___ $___
______________ ___ ___ $___
Total Secured $___
Unsecured
______________ ___ ___ $___
______________ ___ ___ $___
______________ ___ ___ $___
______________ ___ ___ $___
Total Unsecured $___
Guarantees
______________ ___ ___ $___
______________ ___ ___ $___
Total $___
Redeemable Preferred Stock
______________ ___ ___ $___
Total ___ ___ $___
Other Liabilities
______________ ___ ___ $___
______________ ___ ___ $___
______________ ___ ___ $___
Total Consolidated
Liabilities ___ ___ $___
COMPLIANCE CHECK LIST
SOUTHERN ELECTRONICS CORPORATION
SOUTHERN ELECTRONICS DISTRIBUTIORS, INC.
Schedule 4
Consolidated Tangible Net Worth
Stockholders' Equity $______
Less:
Surplus from write-up of assets subsequent
to ______________, 19__ $______
Intangibles $______
Loans to stockholders, directors
officers or employees $______
Capital Stock shown as assets $______
Deferred expenses $______
Consolidated Tangible Net Worth $______
Intangibles Description
(a)___________________________________ $______
(b)___________________________________ $______
(c)___________________________________ $______
Other_________________________________ $______
Total $______
1 To the extent not included above as an Intangible.
EXHIBIT I
SOUTHERN ELECTRONICS CORPORATION
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
CLOSING CERTIFICATE
Reference is made to the Credit Agreement (the "Credit
Agreement") dated as of January 24, 1997, among Southern Electronics
Corporation, Southern Electronics Distributors, Inc., the Banks listed
therein, and Wachovia Bank of Georgia, N.A., as Agent. Capitalized
terms used herein have the meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 4.01(e) of the Credit Agreement,________
______________, the duly authorized ____________________ of Southern
Electronics Corporation, and _______________________, the duly
authorized _____________________ of Southern Electronics Distributors,
Inc., hereby certify to the Agent and the Banks that (i) no Default
has occurred and is continuing as of the date hereof, and (ii) the
representations and warranties contained in Article V of the Credit
Agreement are true on and as of the date hereof.
Certified as of January 24, 1997.
SOUTHERN ELECTRONICS CORPORATION
By:
Printed Name:
Title:
SOUTHERN ELECTRONICS DISTRIBUTORS, INC.
By:
Printed Name:
Title:
EXHIBIT J
[SOUTHERN ELECTRONICS CORPORATION]
[SOUTHERN ELECTRONICS DISTRIBUTORS, INC.]
SECRETARY'S CERTIFICATE
The undersigned, __________________________________,
_______________________, Secretary of [Southern Electronics
Corporation] [Southern Electronics Distributors, Inc.], a Delaware
corporation (the "Borrower"), hereby certifies that [s]he has been
duly elected, qualified and is acting in such capacity and that, as
such, [s]he is familiar with the facts herein certified and is duly
authorized to certify the same, and hereby further certifies, in
connection with the Credit Agreement dated as of January 24, 1997
among Southern Electronics Corporation and Southern Electronics
Distributors, Inc., as the Borrowers, Wachovia Bank of Georgia, N.A.
as Agent and as a Bank, and certain other Banks listed on the
signature pages thereof, that:
1. Attached hereto as Exhibit A is a complete and correct
copy of the Certificate of Incorporation of the Borrower as in full
force and effect on the date hereof as certified by the Secretary of
State of the State of Delaware, the Borrower's state of incorporation.
2. Attached hereto as Exhibit B is a complete and correct
copy of the Bylaws of the Borrower as in full force and effect on the
date hereof.
3. Attached hereto as Exhibit C is a complete and correct
copy of the resolutions duly adopted by the Board of Directors of the
Borrower on January 24, 1997 approving, and authorizing the execution
and delivery of, the Credit Agreement, the Notes, the Letter of Credit
Application Agreements and the other Loan Documents (as such terms are
defined in the Credit Agreement) to which the Borrower is a party.
Such resolutions have not been repealed or amended and are in full
force and effect, and no other resolutions or consents have been
adopted by the Board of Directors of the Borrower in connection
therewith.
4.___________________________, who is ____________________ of
the Borrower signed the Credit Agreement, the Notes [, the Letter of
Credit Application Agreements executed on the Closing Date] and the
other Loan Documents to which the Borrower is a party, was duly
elected, qualified and acting as such at the time [s]he signed the
Credit Agreement, the Notes [, the Letter of Credit Application
Agreements executed on the Closing Date] and other Loan Documents to
which the Borrower is a party, and [his/her] signature appearing on
the Credit Agreement, the Notes [, the Letter of Credit Application
Agreements executed on the Closing Date] and the other Loan Documents
to which the Borrower is a party is [his/her] genuine signature.
IN WITNESS WHEREOF, the undersigned has hereunto set [his/her] hand as
of January 24, 1997.
Schedule 5.08
Subsidiaries of Southern Electronics Corporation
Name Jurisdiction of Incorporation
Southern Electronics
Distributors, Inc. Delaware
Subsidiaries of Southern Electronics Distributors, Inc.
Name Jurisdiction of Incorporation
None.
