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EXHIBIT 10.38
US $150,000,000
CANADIAN CREDIT AGREEMENT
dated as of October 28, 1997,
among
XXXXXX MICRO INC. and
XXXXXX MICRO INC. (CANADA),
as the Borrowers and Guarantors,
CERTAIN FINANCIAL INSTITUTIONS,
as the Lenders,
THE BANK OF NOVA SCOTIA,
as the Administrative Agent for the Lenders,
ROYAL BANK OF CANADA,
as the Syndication Agent for the Lenders,
and
BANK OF TOKYO-MITSUBISHI (CANADA),
as the Co-Agent
PREPARED BY
XXXXXX AND XXXXX, L.L.P., AND
OSLER, XXXXXX & HARCOURT
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TABLE OF CONTENTS
SECTION PAGE
------- ----
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.3 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.4 Accounting and Financial Determinations . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.5 Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
1.6 Amounts in Canadian Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE II COMMITMENTS, ETC.
2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.2 Extensions of the Commitment Termination Date . . . . . . . . . . . . . . . . . . . . . . 29
2.3 Reductions of the Commitment Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.4 Dollars Unavailable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE III PROCEDURES FOR PRO-RATA CREDIT EXTENSIONS AND PROVISIONS FOR
NON-RATA CREDIT EXTENSIONS
3.1 Borrowing Procedure for Pro-Rata Revolving Loans . . . . . . . . . . . . . . . . . . . . . 32
3.2 Pro-Rata Letter of Credit Issuance Procedures . . . . . . . . . . . . . . . . . . . . . . 33
3.2.1 Other Lenders' Participation . . . . . . . . . . . . . . . . . . . . . . . . 33
3.2.2 Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.2.3 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.2.4 Deemed Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.2.5 Nature of Reimbursement Obligations . . . . . . . . . . . . . . . . . . . . . 35
3.2.6 Dollars Unavailable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.3 Pro-Rata Bankers' Acceptance Procedures . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.3.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.3.2 Funding of Bankers' Acceptances . . . . . . . . . . . . . . . . . . . . . . . 36
3.3.3 Notice Irrevocable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.3.4 Payment of Bankers' Acceptances . . . . . . . . . . . . . . . . . . . . . . . 37
3.3.5 Form of Bankers' Acceptances . . . . . . . . . . . . . . . . . . . . . . . . 37
3.3.6 BA Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.3.7 Micro Canada's Right to Market Bankers' Acceptances . . . . . . . . . . . . . 38
3.4 Non-Rata Revolving Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.4.1 Non-Rata Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.4.2 Dollars Unavailable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.4.3 Limitations on Making Non-Rata Revolving Loans . . . . . . . . . . . . . . . 39
3.4.4 Procedure for Making Non-Rata Revolving Loans . . . . . . . . . . . . . . . . 39
3.4.5 Maturity of Non-Rata Revolving Loans . . . . . . . . . . . . . . . . . . . . 39
3.4.6 Non-Rata Revolving Loan Records . . . . . . . . . . . . . . . . . . . . . . . 39
3.4.7 Quarterly Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.5 Non-Rata Letter of Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.5.1 Non-Rata Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.5.2 Dollars Unavailable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.5.3 Limitations on Issuing Non-Rata Letters of Credit . . . . . . . . . . . . . . 40
3.5.4 Procedures for Issuing Non-Rata Letters of Credit . . . . . . . . . . . . . . 40
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3.5.5 Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.5.6 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.6 Reporting of Non-Rata Credit Extensions . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE IV PRINCIPAL, INTEREST, AND FEE PAYMENTS
4.1 Loan Accounts, Notes, Payments, and Prepayments . . . . . . . . . . . . . . . . . . . . . 42
4.1.1 Repayments and Prepayments of Pro-Rata Revolving Loans . . . . . . . . . . . 42
4.2 Interest Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.2.1 Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.2.2 Post-Maturity Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.2.3 Continuation Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.2.4 Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.2.5 Interest Rate Determination . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.2.6 Additional Interest on LIBO Rate Loans . . . . . . . . . . . . . . . . . . . 46
4.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.3.1 Administration and Syndication Fees . . . . . . . . . . . . . . . . . . . . . 46
4.3.2 Facility Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.3.3 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.4 Rate and Fee Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.5 Obligations in Respect of Non-Rata Credit Extensions . . . . . . . . . . . . . . . . . . . 48
ARTICLE V CERTAIN PAYMENT PROVISIONS
5.1 Illegality; Currency Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.2 Deposits Unavailable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.3 Increased Credit Extension Costs, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.4 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.5 Increased Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.6 Discretion of Lenders as to Manner of Funding . . . . . . . . . . . . . . . . . . . . . . 51
5.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.8 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.8.1 Pro-Rata Credit Extensions . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.8.2 Non-Rata Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.9 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.10 Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.11 Judgments, Currencies, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.12 Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.13 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VI CONDITIONS TO MAKING CREDIT EXTENSIONS
6.1 Initial Credit Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.1.1 Resolutions, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.1.2 Effective Date Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.1.3 Guaranties, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.1.4 Financial Information, etc . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.1.5 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.1.6 Consents, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.1.7 Closing Fees, Expenses, etc . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.1.8 Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.1.9 Satisfactory Legal Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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6.2 All Credit Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.2.1 Compliance with Warranties, No Default, etc . . . . . . . . . . . . . . . . . 59
6.2.2 Credit Extension Request . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.2.3 Non-Rata Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.2.4 Non-Rata Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VII REPRESENTATIONS AND WARRANTIES
7.1 Organization, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.2 Due Authorization, Non-Contravention, etc . . . . . . . . . . . . . . . . . . . . . . . . 61
7.3 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.4 Government Approval, Regulation, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.5 Validity, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.6 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.7 No Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.8 Litigation, Labor Controversies, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.9 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.10 Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.12 Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.13 Environmental Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.14 Outstanding Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.15 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.16 Patents, Trademarks, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.17 Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE VIII COVENANTS
8.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.1.1 Financial Information, Reports, Notices, etc . . . . . . . . . . . . . . . . 64
8.1.2 Compliance with Laws, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.1.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.1.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.1.5 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.1.6 Environmental Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.1.7 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.1.8 Pari Passu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.1.9 Guarantee or Suretyship . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.1.10 Additional Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.1.11 Intra-Group Agreement, etc . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.2.1 Restriction on Incurrence of Indebtedness . . . . . . . . . . . . . . . . . . 69
8.2.2 Restriction on Incurrence of Liens . . . . . . . . . . . . . . . . . . . . . 70
8.2.3 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.2.4 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.2.5 Mergers, Consolidations, Substantial Asset Sales, and Dissolutions . . . . . 72
8.2.6 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 72
8.2.7 Limitations on Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.2.8 Limitation on Sale of Trade Accounts Receivable . . . . . . . . . . . . . . . 74
8.2.9 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.2.10 Limitation on Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . 75
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ARTICLE IX EVENTS OF DEFAULT
9.1 Listing of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.1.1 Non-Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.1.2 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.1.3 Non-Performance of Certain Covenants and Obligations . . . . . . . . . . . . 76
9.1.4 Non-Performance of Other Covenants and Obligations . . . . . . . . . . . . . 76
9.1.5 Default on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.1.6 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
9.1.7 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
9.1.8 Ownership; Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . 77
9.1.9 Bankruptcy, Insolvency, etc . . . . . . . . . . . . . . . . . . . . . . . . . 77
9.1.10 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.2 Action if Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.3 Action if Other Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.4 Action by Withdrawing Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.5 Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE X THE ADMINISTRATIVE AGENT AND THE SYNDICATION AGENT
10.1 Authorization and Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.2 Funding Reliance, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.3 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.4 Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.5 Credit Extensions by Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.6 Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.7 Copies, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE XI MISCELLANEOUS PROVISIONS
11.1 Waivers, Amendments, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.3 Payment of Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.5 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.8 Execution in Counterparts, Effectiveness; Entire Agreement . . . . . . . . . . . . . . . . 84
11.9 Governing Law; Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 84
11.10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.11 Assignments and Transfers of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.11.1 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.11.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.12 Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.15 Release of Additional Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.16 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
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SCHEDULES AND EXHIBITS
Schedule I - Disclosure Schedule
- Item 7.8
- Item 7.9
- Item 7.11
- Item 7.12
- Item 7.14
- Item 8.2.1(a)(ii)
- Item 8.2.2(a)
Exhibit A-1 - Revolving Note
Exhibit A-2 - Non-Rata Revolving Note
Exhibit B - Borrowing Request
Exhibit C - Issuance Request
Exhibit D - Continuation Notice
Exhibit E - Compliance Certificate
Exhibit F - Effective Date Certificate
Exhibit G-1 - Coordination Center Guaranty
Exhibit G-2 - Intra-Group Agreement
Exhibit H - Micro Guaranty
Exhibit I-1 - Micro Canada Guaranty (Micro)
Exhibit I-2 - Micro Singapore Guaranty
Exhibit J - Additional Guaranty
Exhibit K - Lender Assignment Agreement
Exhibit L - Quarterly Report
Exhibit M - Opinion of the General Counsel of Micro
Exhibit N - Opinion of Special New York counsel to Micro
Exhibit O - Opinion of Special Canadian counsel to Micro
Canada
Exhibit P - Opinion of Special Belgian counsel to
Coordination Center
Exhibit Q - Opinion of Special Singapore counsel to Micro
Singapore
Exhibit R - Commitment Extension Request
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CANADIAN CREDIT AGREEMENT
THIS CANADIAN CREDIT AGREEMENT is entered into as of October 28, 1997,
among:
- XXXXXX MICRO INC., a corporation organized and existing under the laws
of the State of Delaware, United States of America ("MICRO");
- XXXXXX MICRO INC., a corporation organized and existing under the laws
of the Province of Ontario, Canada ("MICRO CANADA," and collectively
with Micro, "BORROWERS");
- The financial institutions parties hereto (together with their
respective successors and permitted assigns and any branch or
affiliate of a financial institution funding a Loan as permitted by
SECTION 5.6, as a signatory or otherwise, collectively, the
"LENDERS");
- THE BANK OF NOVA SCOTIA ("SCOTIABANK"), as administrative agent for
the Lenders (in such capacity, the "ADMINISTRATIVE AGENT"), and ROYAL
BANK OF CANADA ("ROYAL BANK") as syndication agent for the Lenders (in
such capacity, the "SYNDICATION AGENT," and, collectively with the
Administrative Agent, the "AGENTS"); and
- BANK OF TOKYO-MITSUBISHI (CANADA), as the co-agent (in such capacity,
the "CO-AGENT").
WHEREAS, Micro and its Subsidiaries (such capitalized term and all
other capitalized terms used herein having the meanings provided in SECTION
1.1) are engaged primarily in the business of the wholesale distribution of
microcomputer software and hardware products, multimedia products, customer
financing, assembly and configuration and other related wholesaling,
distribution and service activities; and
WHEREAS, Micro wishes to obtain:
(a) for itself and Micro Canada Commitments from all the
Lenders for Pro-Rata Credit Extensions (with Bankers' Acceptances and
BA Loans being available only to Micro Canada) to be made prior to the
Commitment Termination Date in an aggregate amount in Dollars and
Canadian Dollars, not to exceed the Total Credit Commitment Amount at
any one time outstanding, such Credit Extensions being available on a
committed basis as Pro-Rata Revolving Loans, Pro-Rata Bankers'
Acceptances, and Pro-Rata Letters of Credit, so long as the Letter of
Credit Outstandings never exceed the Letter of Credit Limit; and
(b) for itself and Micro Canada a protocol whereby each
Borrower may, prior to the Commitment Termination Date and to the
extent the aggregate Commitments shall be unused and available from
time to time, request that any Lender make Non-Rata Revolving Loans
and issue Non-Rata Letters of Credit in any Dollars and Canadian
Dollars, so long as (i) the Letter of Credit Outstandings never exceed
the Letter of Credit Limit and (ii) the Outstanding Credit Extensions
consisting of Non-Rata Credit Extensions never exceed the Non-Rata
Limit; and
WHEREAS, each Borrower is willing, subject to SECTION 8.1.10, to
guarantee all Obligations of
CANADIAN CREDIT AGREEMENT
8
the other Borrower on a joint and several basis; and
WHEREAS, the Lenders are willing, pursuant to and in accordance with
the terms of this Agreement:
(a) to extend severally Commitments to make, from time to
time prior to the Commitment Termination Date, Pro-Rata Credit
Extensions in an aggregate amount at any time outstanding not to
exceed the excess of the Total Credit Commitment Amount over the then
Outstanding Credit Extensions; and
(b) to consider from time to time prior to the Commitment
Termination Date, in each Lender's sole and absolute discretion and
without commitment, making Non-Rata Revolving Loans and issuing
Non-Rata Letters of Credit in an aggregate principal amount not to
exceed the difference between the Total Credit Commitment Amount minus
the then Outstanding Credit Extensions, so long as (i) the Letter of
Credit Outstandings never exceed the Letter of Credit Limit and (ii)
the Outstanding Credit Extensions consisting of Non-Rata Credit
Extensions never exceed the Non-Rata Limit; and
WHEREAS, the proceeds of the Credit Extensions will be used for
general corporate purposes (including, working capital and, so long as such
Borrower has complied with SECTION 8.1.7, Acquisitions) of each Borrower and
its Subsidiaries;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency, of which are hereby acknowledged by the parties hereto, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. The following terms (whether or
not in bold or italics type) when used in this Agreement, including its
preamble and recitals, shall, except where the context otherwise requires, have
the following meanings (such meanings to be equally applicable to the singular
and plural forms thereof):
"ACQUISITION" means any transaction, or any series of related
transactions, by which Micro and/or any of its Subsidiaries directly or
indirectly (a) acquires any ongoing business or all or substantially all of the
assets of any Person or division thereof, whether through purchase of assets,
merger or otherwise, (b) acquires (in one transaction or as the most recent
transaction in a series of transactions) control of at least a majority in
ordinary voting power of the securities of a Person which have ordinary voting
power for the election of directors or (c) otherwise acquires control of a more
than 50% ownership interest in any such Person.
"ADDITIONAL GUARANTOR" means each other Subsidiary of Micro as shall
from time to time become a Guarantor in accordance with SECTION 8.1.10.
"ADDITIONAL GUARANTY" means a guaranty, in the form of the attached
EXHIBIT J, duly executed and delivered by an Authorized Person of each
Additional Guarantor, as amended, supplemented,
CANADIAN CREDIT AGREEMENT
9
restated, or otherwise modified from time to time.
"ADDITIONAL PERMITTED LIENS" means, as of any date, Liens securing
Indebtedness and not described in CLAUSES (A) through (L) of SECTION 8.2.2, but
only to the extent that the sum (without duplication) of (a) the Amount of
Additional Liens on such date plus (b) the Total Indebtedness of Subsidiaries
(other than any Subsidiary that is a Guarantor) on such date does not exceed
15% of Consolidated Tangible Net Worth on such date.
"ADJUSTED PERCENTAGE" means -- for any Lender, for any Pro-Rata Credit
Extension (and for the full duration of that Pro-Rata Credit Extension but
which may be different for other Pro-Rata Credit Extensions) -- the quotient
(stated as a percentage) determined by the Administrative Agent (based upon the
information provided to it under SECTION 3.6) equal to (a) that Lender's
Available Credit Commitment at that time divided by (b) the remainder of the
Total Credit Commitment Amount at that time minus the aggregate of all of the
Lenders' Non-Rata Usage at that time.
"ADMINISTRATIVE AGENT" is defined in the preamble and includes each
other Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to SECTION 10.4.
"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be controlled by any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote, in the case of any Lender Party, 10% or more or, in the case of any
other Person, 35% or more, of the securities (on a fully diluted basis) having
ordinary voting power, for the election of directors or managing general
partners, or (b) in the case of any Lender Party or any other Person, to direct
or cause the direction of the management and policies of such Person whether by
contract or otherwise.
"AFFILIATE TRANSACTION" is defined in SECTION 8.2.6.
"AGENTS" is defined in the preamble.
"AGREEMENT" means this Canadian Credit Agreement, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with its terms.
"AMOUNT OF ADDITIONAL LIENS" means, at any date, the aggregate
principal amount of Indebtedness secured by Additional Permitted Liens on such
date.
"APPLICABLE MARGIN" means, for any LIBO Rate Loan, Pro-Rata Letter of
Credit, or Bankers' Acceptance (i) for any day during the period from and
including the Effective Date, through and including the date the Administrative
Agent shall receive the reports and financial statements of Micro and its
Consolidated Subsidiaries required to be delivered pursuant to SECTION 8.1.1(b)
-- together with the Compliance Certificate required to be delivered
contemporaneously therewith pursuant to SECTION 8.1.1(d) -- for the Fiscal
Period ending on the Saturday nearest September 30, 1997, 0.250% per annum and
(ii) for any day subsequent to the date the Administrative Agent shall receive
the reports, financial statements and Compliance Certificate described in the
preceding CLAUSE (I), the corresponding rate per annum set forth in the table
below, determined by reference to (a) the lower of the two highest ratings from
time to time assigned to Micro's long-term senior unsecured debt by S&P,
Xxxxx'x and
3 CANADIAN CREDIT AGREEMENT
10
Fitch and either published or otherwise evidenced in writing by the applicable
rating agency and made available to the Administrative Agent -- including both
"express" and "indicative" or "implied" (or equivalent) ratings -- or (b) the
ratio (calculated pursuant to CLAUSE (c) of SECTION 8.2.3) of Consolidated
Funded Debt to Consolidated EBITDA for the Fiscal Period most recently ended
prior to such day, for which financial statements and reports have been
received by the Administrative Agent pursuant to SECTION 8.1.1(a) or (b),
whichever results in the lower Applicable Margin:
============================================================================================================
MICRO'S LONG-TERM SENIOR UNSECURED RATIO OF CONSOLIDATED FUNDED DEBT TO APPLICABLE MARGIN
DEBT RATINGS BY S&P, XXXXX'X AND CONSOLIDATED EBITDA
FITCH, RESPECTIVELY
============================================================================================================
A-, A3 or A- (or higher) Less than 1.50 0.160%
------------------------------------------------------------------------------------------------------------
BBB+, Baa1 or BBB+ Greater than or equal to 1.50, but less than 0.215%
2.00
------------------------------------------------------------------------------------------------------------
BBB, Baa2 or BBB Greater than or equal to 2.00, but less than 0.250%
2.50
------------------------------------------------------------------------------------------------------------
BBB-, Baa3 or BBB- Greater than or equal to 2.50, but less than 0.275%
3.00
------------------------------------------------------------------------------------------------------------
XXx, Xx0 or BB+ Greater than or equal to 3.00, but less than 0.400%
3.25
------------------------------------------------------------------------------------------------------------
Lower than XXx, Xx0 or BB+ Greater than or equal to 3.25 0.625%
============================================================================================================
Any change in the Applicable Margin pursuant to CLAUSE (ii)(a) above, will be
effective as of the day subsequent to the date on which S&P, Xxxxx'x or Fitch,
as the case may be, releases the applicable change in its rating of Micro's
long-term senior unsecured debt.
"AUTHORIZED PERSON" means those officers or employees of each Obligor
whose signatures and incumbency shall have been certified to the Administrative
Agent pursuant to SECTION 6.1.1.
"AVAILABLE CREDIT COMMITMENT" means, for any Lender and at any time,
the amount (not less than zero) equal to the remainder of (a) an amount equal
to its Percentage of the Total Credit Commitment Amount at that time minus (b)
its Outstanding Credit Extensions at that time.
"BA DISCOUNT RATE" means the BA Schedule I Discount Rate or BA
Schedule II Discount Rate, as the case may be.
"BA DISCOUNTED PROCEEDS" means in respect of any Bankers' Acceptances
to be accepted by a Lender on any day, an amount (rounded to the nearest whole
cent and with one-half of one cent being rounded up), calculated on such day by
multiplying:
(a) the aggregate Face Amount of such Bankers' Acceptances; by
(b) the price, where the price is determined by dividing one
by the sum of one plus the product of:
(i) the BA Discount Rate which is applicable to
such Bankers' Acceptances being issued by such Lender
(expressed as a decimal); and
(ii) a fraction, the numerator of which is the
number of days remaining in
4 CANADIAN CREDIT AGREEMENT
11
the term of such Bankers' Acceptances, and the denominator of
which is 365; with the price as so determined being rounded up
or down to the fifth decimal place, and .000005 being rounded
up.
"BA FEE" means, in respect of a Bankers' Acceptance, a stamping fee
calculated on the Face Amount and maturity of such Bankers' Acceptance at a
rate per annum equal to the Applicable Margin, payable on the date of creation
of such Bankers' Acceptance, calculated on the basis of a year of 365 days or
366 days, as the case may be.
"BA LOAN" is defined in SECTION 3.3.6.
"BANKERS' ACCEPTANCE" means a non-interest bearing xxxx of exchange in
Canadian Dollars having a term of not less than 30 nor more than 180 days and
maturing on a Business Day, drawn by a Borrower, and accepted by a Lender, as
evidenced by such Lender's endorsement thereon at the direction of such
Borrower.
"BA OUTSTANDINGS" means, on any date, the total of the Dollar Amounts
of the Face Amount of all Bankers' Acceptances created by Lenders pursuant to
SECTION 3.3 that have not been repaid by Borrowers, whether or not due and
whether or not held by any Lender. For purposes of this definition, any
Bankers' Acceptances that have been cash collateralized in full in a manner
satisfactory to the Administrative Agent shall not be deemed to be outstanding.
"BA PROCEEDS" means, with respect to a particular Bankers' Acceptance,
the BA Discounted Proceeds with respect thereto less the amount of the BA Fees
in respect of such Bankers' Acceptance.
"BA RATE" means the discount rate per annum, calculated on the basis
of a year of 365 days equal to the arithmetic average of the rates per annum
for Canadian Dollar bankers' acceptances having such term that appear on the
Reuters Screen CDOR Page for the Schedule I Reference Lenders at or about 10:00
a.m., Toronto time, on the first day of such term, as determined by the
Administrative Agent. If such a rate does not appear on such Page for a
particular Schedule I Reference Lender as of such time, such rate for such
Schedule I Reference Lender shall be the arithmetic average of the rates per
annum for Canadian Dollar bankers' acceptances having such term for such
Schedule I Reference Lender which are quoted to such Schedule I Reference
Lender as of such time by three major Canadian investment dealers chosen by
such Schedule I Reference Lender that appear on such Page, provided that such
Schedule I Reference Lender shall act in good faith in order to obtain
representative quotes.
"BA SCHEDULE I DISCOUNT RATE"means, with respect to any Bankers'
Acceptance accepted by a Schedule I Lender, the rate determined by the
Administrative Agent as being the arithmetic average (rounded upward to the
nearest multiple of 0.01%) of the discount rates, calculated on the basis of a
year of 365 days and determined in accordance with normal market practice at or
about 10:00 a.m. Toronto time on the date of issue and acceptance of such
Bankers' Acceptance, for bankers' acceptances of the Schedule I Reference
Lenders having a comparable Face Amount and identical maturity date to the Face
Amount and maturity date of such Bankers' Acceptance.
"BA SCHEDULE II DISCOUNT RATE" means, with respect to an issue of
Bankers' Acceptances to be accepted by a Schedule II Lender hereunder, one of
the two following annual rates, as applicable, namely
5 CANADIAN CREDIT AGREEMENT
12
(a) the annual rate determined by the Administrative Agent as being the
arithmetic average (rounded upwards to the nearest multiple of 0.01%) of the
discount rates of the Schedule II Reference Lenders determined in accordance
with their normal practices at or about 10:00 a.m., Toronto time, on the date
of issue and acceptance of such Bankers' Acceptances, for bankers' acceptances
having a comparable face value and an identical maturity date of such issue of
Bankers' Acceptances, or (b) if the annual rate so determined exceeds by more
than 0.10% per annum the BA Schedule I Discount Rate as at the time of
determination, an annual rate equal to such BA Schedule I Discount Rate plus
0.10%.
"BOARD REPRESENTATION AGREEMENT" means the Board Representation
Agreement dated as of November 6, 1996, among Micro and the "Family
Stockholders" (as defined therein) listed on the signature pages thereof, as in
effect on that date without giving effect to any amendment, waiver, supplement,
or modification thereafter except for any such amendment, waiver, supplement,
or modification that does not materially alter the terms thereof (excluding
from such exception however, any such amendment, waiver, supplement, or
modification that in any way expands the scope of or materially affects the
definition of "Family Stockholders" set forth therein).
"BORROWERS" is defined in the preamble, together with their respective
successors and assigns.
"BORROWING" means the Pro-Rata Revolving Loans of the same Type and,
in the case of any LIBO Rate Loan, having the same Interest Period, made by all
Lenders on the same Business Day, and made pursuant to the same Borrowing
Request in accordance with SECTION 2.1.
"BORROWING REQUEST" means a loan request and certificate for Pro-Rata
Revolving Loans duly completed and executed by an Authorized Person of the
relevant Borrower, substantially in the form of EXHIBIT B hereto.
"BUSINESS DAY" means:
(a) for all purposes and also relative to the making
of any payment in respect of any Credit Extension denominated in
Canadian Dollars or any dealings in respect of Bankers' Acceptances,
any day that is neither a Saturday or Sunday nor a legal holiday on
which banks are authorized or required to be closed in Xxxxxxx,
Xxxxxxx, Xxxxxx;
(b) relative to the making of any payment in respect
of any Credit Extension denominated in Dollars, any day that is
neither a Saturday or Sunday nor a legal holiday on which banks are
authorized or required to be closed in Toronto or New York City;
(c) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day which is a Business Day
described in CLAUSE (a) or (b) above, as the case may be, and which is
also a day on which dealings in Dollars are carried on in the London
interbank eurodollar market; and
(d) with respect to any payment, notice or other
event relating to any Non-Rata Credit Extension, any day on which
banks are open for business in the location of the lending office of
the Lender making such Non-Rata Credit Extension available.
"CANADIAN DOLLARS" and the sign "CDN$" each means lawful currency of
Canada.
6 CANADIAN CREDIT AGREEMENT
13
"CANADIAN PRIME RATE" means, with respect to any Canadian Prime Rate
Loans as of any date of determination, the greater of either (a) the
fluctuating interest rate per annum which Scotiabank has announced as its
reference rate for determining interest chargeable by it on loans denominated
in Canadian Dollars made in Canada, as in effect on such date of determination,
or (b) the BA Discount Rate for such day for Bankers' Acceptances having a term
of 30 days plus 0.50%. As to any Canadian Prime Rate Loan, the Canadian Prime
Rate is a reference rate that varies from time to time and does not necessarily
represent the lowest or best rate actually charged to any customer by
Scotiabank or any Lender for loans denominated in Canadian Dollars. Scotiabank
and Lenders may make commercial loans or other loans denominated in Canadian
Dollars at rates of interest at, above or below the Canadian Prime Rate. The
Canadian Prime Rate shall automatically change, without notice to either
Borrower, upon any date that Scotiabank announces as the effective date of any
change in said reference rate or determines that the prevailing BA Discount
Rate for 30 day Bankers' Acceptances has changed to the extent necessary to
reflect any such change.
"CANADIAN PRIME RATE LOAN" means a Pro-Rata Revolving Loan bearing
interest at a fluctuating rate of interest determined by reference to the
Canadian Prime Rate.
"CAPITALIZED LEASE LIABILITIES" of any Person means, at any time, any
obligation of such Person at such time to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) real and/or personal
property, which obligation is, or in accordance with GAAP (including FASB
Statement 13) is required to be, classified and accounted for as a capital
lease on a balance sheet of such Person at the time incurred; and for purposes
of this Agreement the amount of such obligation shall be the capitalized amount
thereof determined in accordance with such FASB Statement 13.
"CO-AGENT" is defined in the preamble.
"CODE" means the U.S. Internal Revenue Code of 1986, as amended and as
in effect from time to time, and any rules and regulations promulgated
thereunder.
"COMMITMENT" means, relative to each Lender, its obligation under
SECTION 2.1(a) to make Pro-Rata Revolving Loans, under SECTION 2.1(b) to issue
Bankers' Acceptances, and under SECTION 2.1(c) to participate in Pro-Rata
Letters of Credit and drawings thereunder.
"COMMITMENT EXTENSION REQUEST" means a request for the extension of
the Commitment Termination Date duly executed by an Authorized Person of Micro,
substantially in the form of EXHIBIT R attached hereto.
"COMMITMENT TERMINATION DATE" means the fourth anniversary of the date
hereof (as that date may be extended under SECTION 2.2), or the earlier date of
termination in whole of the Commitments pursuant to SECTION 2.3, 9.2, or 9.3.
"COMPLIANCE CERTIFICATE" means a report duly completed, with
substantially the same information as set forth in EXHIBIT E attached hereto,
as such EXHIBIT E may be amended, supplemented, restated or otherwise modified
from time to time.
"CONSOLIDATED" and any derivative thereof each means, with reference
to the accounts or
7 CANADIAN CREDIT AGREEMENT
14
financial reports of any Person, the consolidated accounts or financial reports
of such Person and each Subsidiary of such Person determined in accordance with
GAAP, including principles of consolidation, consistent with those applied in
the preparation of the consolidated financial statements of Micro referred to
in SECTION 7.6.
"CONSOLIDATED ASSETS" means, at any date, the total assets of Micro
and its Consolidated Subsidiaries as at such date in accordance with GAAP.
"CONSOLIDATED CURRENT ASSETS" means, at any date, all amounts which
would be included as current assets on a consolidated balance sheet of Micro
and its Consolidated Subsidiaries as at such date in accordance with GAAP.
"CONSOLIDATED CURRENT LIABILITIES" means, at any date, all amounts
which would be included as current liabilities on a consolidated balance sheet
of Micro and its Consolidated Subsidiaries as at such date in accordance with
GAAP, excluding any such current liabilities constituting Current Maturities of
Funded Debt at such date.
"CONSOLIDATED CURRENT RATIO" means, at any date, the ratio of (a)
Consolidated Current Assets as at such date, to (b) Consolidated Current
Liabilities as at such date.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income
adjusted by adding thereto the amount of Consolidated Interest Charges that
were deducted in arriving at Consolidated Net Income for such period and all
amortization of intangibles, taxes, depreciation and any other non-cash charges
that were deducted in arriving at Consolidated Net Income for such period.
"CONSOLIDATED FUNDED DEBT" means, as of any date of determination, the
total of all Funded Debt of Micro and its Consolidated Subsidiaries outstanding
on such date, after eliminating all offsetting debits and credits between Micro
and its Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of Micro and its
Subsidiaries in accordance with GAAP.
"CONSOLIDATED INTEREST CHARGES" means, with respect to any period, the
sum (without duplication) of the following (in each case, eliminating all
offsetting debits and credits between Micro and its Subsidiaries and all other
items required to be eliminated in the course of the preparation of
consolidated financial statements of Micro and its Subsidiaries in accordance
with GAAP):
(a) aggregate net interest expense in respect of
Indebtedness of Micro and its Subsidiaries (including imputed interest
on Capitalized Lease Liabilities) deducted in determining Consolidated
Net Income for such period plus, to the extent not deducted in
determining Consolidated Net Income for such period, the amount of all
interest previously capitalized or deferred that was amortized during
such period; plus
(b) all debt discount and expense amortized or
required to be amortized in the determination of Consolidated Net
Income for such period; plus
(c) all attributable interest and fees in lieu of
interest associated with any securitizations by Micro or any of its
Subsidiaries.
8 CANADIAN CREDIT AGREEMENT
15
"CONSOLIDATED LIABILITIES" means, at any date, the sum of all
obligations of Micro and its Consolidated Subsidiaries as at such date in
accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the consolidated net
income of Micro and its Consolidated Subsidiaries as reflected on a statement
of income of Micro and its Consolidated Subsidiaries for such period in
accordance with GAAP.
"CONSOLIDATED RETAINED RECEIVABLES" means, at any date, the face
amount (calculated in Dollars but net of any amount allocated to the relevant
Trade Account Receivable with respect to any reserve or similar allowance for
doubtful payment) of all Trade Accounts Receivable of Micro and its
Consolidated Subsidiaries outstanding as at such date (including, in the case
of any receivables that have been sold, assigned or otherwise transferred to a
trust, the amount of such receivables net of any amount of Consolidated
Transferred Receivables determined with respect thereto, it being agreed for
the avoidance of doubt that Consolidated Retained Receivables shall not include
any Consolidated Transferred Receivables).
"CONSOLIDATED STOCKHOLDERS' EQUITY" means, at any date, the remainder
of (a) Consolidated Assets as at such date, minus (b) Consolidated Liabilities
as at such date.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary whose financial
statements are required in accordance with GAAP to be consolidated with the
consolidated financial statements delivered by Micro from time to time in
accordance with SECTION 8.1.1.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date, the remainder of
(a) Consolidated Stockholders' Equity as at such date plus the accumulated
after-tax amount of non-cash charges and adjustments to income and Consolidated
Stockholders' Equity attributable to employee stock options and stock purchases
through such date, minus (b) goodwill and other Intangible Assets of Micro and
its Consolidated Subsidiaries.
"CONSOLIDATED TRANSFERRED RECEIVABLES" means, at any date, the face
amount (calculated in Dollars but net of any amount allocated by Micro or any
of its Consolidated Subsidiaries to the relevant Trade Account Receivable with
respect to any reserve or similar allowance for doubtful payment) of all Trade
Accounts Receivable originally payable to the account of Micro or any of its
Consolidated Subsidiaries, which have not been discharged at such date and in
respect of which Micro's or any such Consolidated Subsidiary's rights and
interests, have, on or prior to such date, been sold, assigned or otherwise
transferred, in whole or in part, to any Person other than Micro or any of its
Consolidated Subsidiaries (either directly or by way of such Person holding an
undivided interest in a specified amount of Trade Accounts Receivable sold,
assigned or otherwise transferred to a trust).
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is
contingently liable (by direct or indirect agreement, contingent or otherwise)
to provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
person, if the primary purpose or intent thereof by the Person incurring the
Contingent Liability is to provide assurance to the obligee of such obligation
of another Person that such obligation
9 CANADIAN CREDIT AGREEMENT
16
of such other Person will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof. The
amount of any Person's obligation under any Contingent Liability shall (subject
to any limitation set forth therein) be deemed to be the outstanding principal
amount of the debt, obligation or other liability guaranteed thereby.
"CONTINUATION NOTICE" means a notice of continuation and certificate
for Pro-Rata Revolving Loans duly completed and executed by an Authorized
Person of the relevant Borrower, substantially in the form of EXHIBIT D hereto.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with Micro,
are treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"COORDINATION CENTER" means Xxxxxx European Coordination Center N.V.,
a company organized and existing under the laws of The Kingdom of Belgium.
"COORDINATION CENTER GUARANTY" means a guaranty, in the form of
EXHIBIT G-1 hereto, duly executed and delivered by an Authorized Person of
Coordination Center, as amended, supplemented, restated or otherwise modified
from time to time.
"CREDIT COMMITMENT AMOUNT" means, relative to any Lender at any time,
such Lender's Percentage multiplied by the then Total Credit Commitment Amount
as in effect at such time.
"CREDIT EXTENSION," as the context may require, means (a) any Pro-Rata
Credit Extension or (b) the making of a Non-Rata Credit Extension by the
relevant Lender.
"CREDIT EXTENSION REQUEST" means, as the context may require, a
Borrowing Request, a Continuation Notice, an Issuance Request, or a Drawing
Notice.
"CURRENT MATURITIES OF FUNDED DEBT" means, at any time and with
respect to any item of Funded Debt, the portion of such Funded Debt outstanding
at such time which by the terms of such Funded Debt or the terms of any
instrument or agreement relating thereto is due on demand or within one year
from such time (whether by sinking fund, other required prepayment or final
payment at maturity) and is not directly or indirectly renewable, extendible or
refundable at the option of the obligor under an agreement or firm commitment
in effect at such time to a date one year or more from such time.
"DEFAULT" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.
"DISBURSEMENT DATE" is defined in SECTION 3.2.2.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as the same may be amended, supplemented or otherwise modified from
time to time by Micro with the consent of the Administrative Agent and the
Required Lenders.
10 CANADIAN CREDIT AGREEMENT
17
"DOLLAR" and the sign "$" each means the lawful currency of the United
States.
"DOLLAR AMOUNT," at any date, means (a) with respect to an amount
denominated in Dollars, such amount as at such date, and (b) with respect to an
amount denominated in Canadian Dollars, the amount of Dollars into which
Canadian Dollars are convertible into Dollars, as at such date and on the terms
herein provided.
"DRAWING DATE" means any Business Day fixed pursuant to SECTION 3.3
for the creation of Bankers' Acceptances.
"DRAWING NOTICE" means a notice given by Borrower under SECTION 3.3.1.
"EFFECTIVE DATE" is defined in SECTION 11.8.
"EFFECTIVE DATE CERTIFICATE" means a certificate duly completed and
executed by an Authorized Person of Micro, substantially in the form of EXHIBIT
F hereto.
"ELIGIBLE ASSIGNEE" means any Person that, on the date that it is to
become a Lender under this Agreement, is (i) a Lender or (ii) any one of the
following:
(a) a bank that is (i) a chartered bank organized
under the Bank Act (Canada), (ii) has (or is owned by a holding
company that on a consolidated basis has) combined capital and surplus
(as established in its most recent report of condition to its primary
regulator) of not less than $250,000,000 (or its equivalent in foreign
currency), and (iii) is reasonably acceptable to the Administrative
Agent and (so long as no Event of Default exists at that time) Micro
(which may take into account, among other things, the creditworthiness
of that bank or financial institution and the holding company, if any,
by which it is owned);
(b) a commercial bank that at that time (i) is
organized under the laws of the United States or any State thereof,
(ii) has outstanding unsecured indebtedness that is rated A- or better
by S&P, A3 or better by Xxxxx'x or A- or better by Fitch (or an
equivalent rating by another nationally recognized credit rating
agency of similar standing if such corporations are no longer in the
business of rating unsecured indebtedness of entities engaged in such
businesses), (iii) has combined capital and surplus (as established in
its most recent report of condition to its primary regulator) of not
less than $250,000,000 (or its equivalent in foreign currency), and
(iv) is reasonably acceptable to the Administrative Agent and (so long
as no Event of Default exists at that time) Micro;
(c) a commercial bank that at that time (i) is
organized under the laws of (A) any other country that is a member of
the Organization for Economic Cooperation and Development or has
concluded special lending arrangements with the International Monetary
Fund associated with its General Arrangements to Borrow or any country
that is a member of the European Community, or (B) political
subdivision of any such country, (ii) in respect of Credit Extensions
to or for Micro Canada, is acting through a branch or agency that is
listed on either Schedule I or Schedule II to the Bank Act (Canada)
(iii) has (unless Micro otherwise agrees) outstanding unsecured
indebtedness that is rated A- or better by S&P, A3 or better by
Xxxxx'x or A- or better by Fitch (or an equivalent rating by another
nationally recognized credit rating agency of similar
11 CANADIAN CREDIT AGREEMENT
18
standing if such corporations are no longer in the business of rating
unsecured indebtedness of entities engaged in such businesses), (iv)
has combined capital and surplus (as established in its most recent
report of condition to its primary regulator) of not less than
$250,000,000 (or its equivalent in foreign currency), and (v) is
reasonably acceptable to the Administrative Agent and (so long as no
Event of Default exists at that time) Micro;
(d) the central bank of any country that at that time
(i) is a member of the Organization for Economic Cooperation and
Development, (ii) has (unless Micro otherwise agrees) outstanding
unsecured indebtedness that is rated A- or better by S&P, A3 or better
by Xxxxx'x or A- or better by Fitch (or an equivalent rating by
another nationally recognized credit rating agency of similar standing
if such corporations are no longer in the business of rating unsecured
indebtedness of entities engaged in such businesses), (iii) has
combined capital and surplus (as established in its most recent report
of condition to its primary regulator) of not less than $250,000,000
(or its equivalent in foreign currency), and (iv) is reasonably
acceptable to the Administrative Agent and (so long as no Event of
Default exists at that time) Micro; or
(e) solely during the occurrence and continuance of
an Event of Default, a finance company, insurance company, or other
financial institution or fund (whether a corporation, partnership, or
other entity) that at that time (i) is engaged generally in making,
purchasing, and otherwise investing in commercial loans in the
ordinary course of its business, (ii) has combined capital and surplus
(as established in its most recent report of condition to its primary
regulator) of not less than $250,000,000 (or its equivalent in foreign
currency), and (iii) is reasonably acceptable to the Administrative
Agent;
so long as, in the case of any Person described in CLAUSES (A) through (E)
above, it must also at that time be (A) in respect of payments by Micro,
entitled to receive payments hereunder free and clear of and without deduction
for or on account of any United States federal income taxes, and (B) in respect
of payments by Micro Canada, entitled to receive payments hereunder and free
and clear without deduction for or on account of any Canadian income taxes.
"ENTERTAINMENT" means Xxxxxx Entertainment Inc., a Tennessee
corporation.
"ENVIRONMENTAL LAWS" means any and all applicable statutes, laws,
ordinances, codes, rules, regulations and binding and enforceable guidelines
(including consent decrees and administrative orders binding on any Obligor or
any of their respective Subsidiaries), in each case as now or hereafter in
effect, relating to human health and safety, or the regulation or protection of
the environment, or to emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals or toxic or hazardous substances or
wastes into the indoor or outdoor environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes issued (presently or in the future) by any
national, federal, state, provincial, territorial, or local authority in any
jurisdiction in which any Obligor or any of their respective Subsidiaries is
conducting its business.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the rules
and regulations promulgated thereunder, in each case as in effect from time to
time. References to sections of ERISA also refer to any successor sections.
12 CANADIAN CREDIT AGREEMENT
19
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the F.R.S. Board, as in effect from time to time.
"EUROPEAN CREDIT AGREEMENT" means the European Credit Agreement dated
as of October 28, 1997, among Micro, Coordination Center, the various financial
institutions parties thereto as lenders, Scotiabank and NationsBank,
respectively, as the administrative agent and the syndication agent for those
lenders, and the arrangers named therein, as renewed, extended, amended, or
restated.
"EVENT OF DEFAULT" is defined in SECTION 9.1.
"EXTENSION PERIOD" is defined in SECTION 2.2(a).
"FACE AMOUNT" means, in respect of a draft or Bankers' Acceptances, as
the case may be, the amount payable to the holder thereof on its maturity.
"FASB" means the Financial Accounting Standards Board.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to:
(a) the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York; or
(b) if such rate is not so published for any day
which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it.
In the case of a day which is not a Business Day, the Federal Funds Rate for
such day shall be the Federal Funds Rate for the next preceding Business Day.
For purposes of this Agreement, any change in the U.S. Base Rate due to a
change in the Federal Funds Rate shall be effective or the effective date of
such change in the Federal Funds Rate.
"FEE LETTER" means that letter agreement dated as of September 4,
1997, between Scotiabank and Micro, relating to certain fees to be paid in
connection with this Agreement.
"FISCAL PERIOD" means a fiscal period of Micro or any of its
Subsidiaries, which shall be either a calendar quarter or an aggregate period
comprised of three consecutive periods of four weeks and five weeks (or, on
occasion, six weeks instead of five), currently commencing on or about each
January 1, April 1, July 1 or October 1.
"FISCAL YEAR" means, with respect to any Person, the fiscal year of
such Person. The term Fiscal Year, when used without reference to any Person,
shall mean a Fiscal Year of Micro, which currently ends on the Saturday nearest
December 31.
13 CANADIAN CREDIT AGREEMENT
20
"FITCH" means Fitch Investors Service, L.P.
"F.R.S. BOARD" is defined in SECTION 7.17.
"FUNDED DEBT" means, with respect to any Person, all Indebtedness of
such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option
of the obligor in respect thereto to a date one year or more (including,
without limitation, an option of such obligor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of one year or more) from, the date of the creation thereof; provided
that Funded Debt shall include, as at any date of determination, Current
Maturities of Funded Debt.
"GAAP" is defined in SECTION 1.4.
"GUARANTEE LETTER OF CREDIT OBLIGATIONS" means any contingent legal
obligations of any Person to reimburse any financial institution for draws on
letters of credit (including those issued pursuant to this Agreement) issued
for the account of such Person to support or ensure payment or performance of
Indebtedness or obligations of some other Person provided no such draws have
been made and such obligation to reimburse is not then due and payable; it
being understood that no obligation with respect to any letter of credit
(including those issued pursuant to this Agreement) may be treated as both a
Reimbursement Obligation and a Guarantee Letter of Credit Obligation.
"GUARANTIES" collectively means (a) the Micro Guaranty, (b) the
Coordination Center Guaranty, (c) the Micro Canada Guaranty (Micro), (d) the
Micro Singapore Guaranty, and (e) each Additional Guaranty.
"GUARANTORS" means, collectively, the Borrowers, Coordination Center,
Micro Singapore, and each Additional Guarantor.
"HAZARDOUS MATERIAL" means (a) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material or substance that is presently
or hereafter becomes defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants," "pollutants," or terms of similar import within the meaning of
any Environmental Law, or (b) any other chemical or other material or
substance, exposure to which is presently or hereafter prohibited, limited or
regulated under any Environmental Law.
"HEREIN," "HEREOF," "HERETO," "HEREUNDER," and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Article, Section, clause, paragraph or provision of this Agreement or such
other Loan Document.
"IMPERMISSIBLE QUALIFICATIONS" means, relative to the opinion of
certification of any independent public accountant engaged by Micro as to any
financial statement of Micro and its Consolidated Subsidiaries, any
qualification or exception to such opinion or certification:
(a) which is of a "going concern" or similar nature;
14 CANADIAN CREDIT AGREEMENT
21
(b) which relates to the limited scope of examination
of matters relevant to such financial statement; or
(c) which relates to the treatment or classification
of any item in such financial statement and which, as a condition to
its removal, would require an adjustment to such item the effect of
which would be to cause Micro to be in default of any of its
obligations under SECTION 8.2.3 or 8.2.8;
provided that (i) qualifications relating to pre-acquisition balance sheet
accounts of Person(s) acquired by Micro or any of its Subsidiaries and (ii)
statements of reliance in the auditor's opinion on another accounting firm (so
long as such other accounting firm has a national reputation in the applicable
country and such reliance does not pertain to any Borrower) shall not be deemed
an Impermissible Qualification.
"INCLUDING" and "INCLUDE" mean including without limiting the
generality of any description preceding such term.
"INDEBTEDNESS" of any Person means and includes the sum of the
following (without duplication):
(a) all obligations of such Person for borrowed
money, all obligations evidenced by bonds, debentures, notes,
investment repurchase agreements or other similar instruments, and all
securities issued by such Person providing for mandatory payments of
money, whether or not contingent;
(b) all obligations of such Person pursuant to
revolving credit agreements or similar arrangements to the extent then
outstanding;
(c) all obligations of such Person to pay the
deferred purchase price of property or services, except (i) trade
accounts payable arising in the ordinary course of business, (ii)
other accounts payable arising in the ordinary course of business in
respect of such obligations the payment of which has been deferred for
a period of 270 days or less, (iii) other accounts payable arising in
the ordinary course of business none of which shall be, individually,
in excess of $200,000, and (iv) leases of real or personal property
not required to be capitalized under FASB Statement 13;
(d) all obligations of such Person as lessee under
Capitalized Lease Liabilities;
(e) all obligations of such Person to purchase
securities (or other property) which arise out of or in connection
with the sale of the same or substantially similar securities or
property excluding any such sales or exchanges for a period of less
than 45 days;
(f) all obligations with respect to letters of credit
(other than trade letters of credit) and bankers' acceptances issued
for the account of such Person;
(g) all Indebtedness of others secured by a Lien of
any kind on any asset of such Person, whether or not such Indebtedness
is assumed by such Person; provided, that the amount
15 CANADIAN CREDIT AGREEMENT
22
of any Indebtedness attributed to any Person pursuant to this CLAUSE
(g) shall be limited, in each case, to the lesser of (i) the fair
market value of the assets of such Person subject to such Lien and
(ii) the amount of the other Person's Indebtedness secured by such
Lien; and
(h) all Guarantees endorsements and other Contingent
Liabilities of or in respect of, or obligations to purchase or
otherwise acquire, the Indebtedness of another Person;
provided that it is understood and agreed that the following are not
"INDEBTEDNESS":
(i) obligations to pay the deferred purchase price
for the acquisition of any business (whether by way of merger, sale of
stock or assets or otherwise), to the extent that such obligations are
contingent upon attaining performance criteria such as earnings and
such criteria shall not have been achieved;
(ii) obligations to repurchase securities (A) issued
to employees pursuant to any Plan or other contract or arrangement
relating to employment upon the termination of their employment or
other events, or (B) that may arise out of the transactions
contemplated by the Transition Agreements;
(iii) obligations to match contributions of employees
under any Plan; and
(iv) guarantees of any Obligor or any of their
respective Subsidiaries that are guarantees of performance,
reclamation or similar bonds or, in lieu of such bonds, letters of
credit used for such purposes issued in the ordinary course of
business for the benefit of any Subsidiary of Micro, which would not
be included on the consolidated financial statements of any Obligor.
"INDEMNIFIED LIABILITIES" is defined in SECTION 11.4.
"INDEMNIFIED PARTIES" is defined in SECTION 11.4.
"INDUSTRIES" means Xxxxxx Industries Inc., a Tennessee corporation.
"INTANGIBLE ASSETS" means, with respect to any Person, that portion of
the book value of the assets of such Person which would be treated as
intangibles under GAAP, including all items such as goodwill, trademarks, trade
names, brands, trade secrets, customer lists, copyrights, patents, licenses,
franchise conversion rights and rights with respect to any of the foregoing and
all unamortized debt or equity discount and expenses.
"INTEREST PERIOD" means, for any LIBO Rate Loan, the period beginning
on (and including) the date on which such LIBO Rate Loan is made, continued or
converted and ending on (but excluding) the last day of the period selected by
the relevant Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, three, or six months from (and including)
the date of such LIBO Rate Loan, ending on (but excluding) the day which
numerically corresponds to such date (or, if such month has no numerically
corresponding day on the last Business Day of such month), as such relevant
Borrower may select in its relevant notice pursuant to SECTION 3.1 or 4.2.3;
provided that:
(a) no Borrower shall be permitted to select Interest
Periods for LIBO Rate
16 CANADIAN CREDIT AGREEMENT
23
Loans to be in effect at any one time which have expiration
dates occurring on more than eight different dates;
(b) Interest Periods commencing on the same date for
Pro-Rata Revolving Loans comprising part of the same Borrowing shall
be of the same duration;
(c) if such Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall end on the
next following Business Day (unless, if such Interest Period applies
to a LIBO Rate Loan, such next following Business Day is the first
Business Day of a calendar month, in which case such Interest Period
shall end on the Business Day next preceding such numerically
corresponding day); and
(d) no Interest Period for any LIBO Rate Loan may
end, with respect to each Lender making a part of such Loan, later
than the Commitment Termination Date.
"INTRA-GROUP AGREEMENT" means the Intra-Group Agreement, in the form
of EXHIBIT G-2 hereto, duly executed and delivered by Authorized Persons of
each Borrower that is a Guarantor, as amended, supplemented, restated or
otherwise modified from time to time.
"ISSUANCE REQUEST" means an issuance request for Pro-Rata Letters of
Credit duly completed and executed by an Authorized Person of Micro,
substantially in the form of EXHIBIT C hereto.
"ISSUER" means any Lender, in its capacity as issuer of a Pro-Rata
Letter of Credit or in its capacity as issuer of a Non-Rata Letter of Credit.
"LENDERS" is defined in the preamble.
"LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement
substantially in the form of EXHIBIT K attached hereto.
"LENDER PARTY" means any of the Lenders, Agents, Co-Agents, or
Issuers.
"LENDING OFFICE" means, for any Lender (a) for Pro-Rata Revolving
Loans to Micro, its Lending Office for Micro designated beside its signature
below, designated in a Lender Assignment Agreement to which it is a party, or
designated in a notice to the Administrative Agent and Micro from time to time
and at any time, (b) for Pro-Rata Revolving Loans to Micro Canada, its Lending
Office for Micro Canada designated beside its signature below, designated in a
Lender Assignment Agreement to which it is a party, or designated in a notice
to the Administrative Agent and Micro from time to time and at any time, and
(c) for any Non-Rata Credit Extension, the office that the Lender shall
designate.
"LETTER OF CREDIT LIMIT" means, on any date, a maximum amount (as such
amount may be reduced from time to time pursuant to SECTION 2.3) equal to 25%
of the Total Credit Commitment Amount.
"LETTER OF CREDIT OUTSTANDINGS" means, on any date, the sum (without
duplication) of the Dollar Amounts of (a) the then aggregate amount which is
undrawn and available under all Letters of Credit issued and outstanding
(assuming that all conditions for drawing have been satisfied), plus (b) the
then aggregate amount of all unpaid and outstanding Reimbursement Obligations.
17 CANADIAN CREDIT AGREEMENT
24
"LETTERS OF CREDIT" means, collectively, all Pro-Rata Letters of
Credit issued and outstanding and Non-Rata Letters of Credit issued and
outstanding.
"LIBO RATE" means, for any Interest Period for a Borrowing, an annual
interest rate (rounded upward to four decimal places) determined by the
Administrative Agent to be either:
(a) the London interbank offered rate for deposits,
in the currency in which that Borrowing is denominated under this
Agreement, at approximately 11:00 a.m. London time two Business Days
before the first day of that Interest Period for a term comparable to
that Interest Period, that appears on Telerate Pages 3740 or 3750; or
(b) if no such display rate is then available, the
average of the rates at which deposits of the currency of the relevant
Borrowing in immediately available funds are offered to each Reference
Lender's LIBOR Office in the London interbank market at or about 11:00
a.m., London time, two Business Days prior to the beginning of such
Interest Period for delivery on the first day of such Interest Period,
and in an amount approximately equal to the amount of each such
Reference Lender's Pro-Rata Revolving Loan that is part of that
Borrowing and for a period approximately equal to such Interest
Period.
"LIBO RATE LOAN" means a Pro-Rata Revolving Loan bearing interest, at
all times during the Interest Period applicable thereto, at a fixed rate of
interest determined by reference to the LIBO Rate.
"LIBOR RESERVE PERCENTAGE" means, for any Lender, relative to any
Interest Period for LIBO Rate Loans, the reserve percentage (expressed as a
decimal) equal to the maximum aggregate reserve requirements (including all
basic, emergency, supplement, marginal and other reserves and taking into
account any transitional adjustments or other scheduled changes in reserve
requirements) specified under regulations issued from time to time by the
F.R.S. Board and then applicable to assets or liabilities consisting of and
including Eurocurrency Liabilities having a term approximately equal or
comparable to such Interest Period.
"LIEN" means any security interest, mortgage, pledge, hypothecation,
hypotecs, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against, valid claim on or interest in property to secure payment of a
debt or performance of an obligation or other priority or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
(a) the lien or retained security title of a conditional vendor, and (b) under
any agreement for the sale of Trade Accounts Receivable, the interest of the
purchaser (or any assignee of such purchaser which has financed the relevant
purchase) in a percentage of receivables of the seller not so sold, held by the
purchaser (or such assignee) as a reserve for (i) interest rate protection in
the event of a liquidation of the receivables sold, (ii) expenses that would be
incurred upon a liquidation of the receivables sold, (iii) losses that might be
incurred in the event the amount actually collected from the receivables sold
is less than the amount represented in the relevant receivables purchase
agreement as collectible, or (iv) any similar purpose (but excluding the
interest of a trust in such receivables to the extent that the beneficiary of
such trust is Micro or a Subsidiary of Micro).
"LOAN" means a Pro-Rata Revolving Loan or a Non-Rata Revolving Loan.
"LOAN DOCUMENT" means this Agreement, each Note (if any), each Credit
Extension Request,
18 CANADIAN CREDIT AGREEMENT
25
each Letter of Credit, each Bankers' Acceptance, each Draft, the Intra-Group
Agreement, each Guaranty, the most recently delivered Compliance Certificate
(specifically excluding any other Compliance Certificate previously delivered),
and any other agreement, document, or instrument (excluding any documents
delivered solely for the purpose of satisfaction disclosure requirements or
requests for information) required in connection with this Agreement or the
making or maintaining of any Credit Extension and delivered by an Authorized
Person.
"MARGIN STOCK" means "margin stock," as such term is defined and used
in Regulation U.
"MATERIAL ADVERSE EFFECT" means an event, act, occurrence or other
circumstance which results in a material adverse effect on the business,
results of operations or financial condition of Micro and its Consolidated
Subsidiaries, taken as a whole.
"MATERIAL ASSET ACQUISITION" (a) means the purchase or other
acquisition (in one transaction or a series of related transactions) from any
Person of property or assets, the aggregate purchase price of which (calculated
in Dollars) paid in cash or property (other than property consisting of equity
shares or interests or other equivalents of corporate stock of, or partnership
or other ownership interests in, any Obligor), equals or exceeds 25% of the sum
(calculated without giving effect to such purchase or acquisition) of (i)
Consolidated Funded Debt (determined as at the end of the then most recently
ended Fiscal Period), plus (ii) Consolidated Stockholders' Equity (determined
as at the end of the then most recently ended Fiscal Period), plus (iii) any
increase thereof attributable to any equity offerings or issuances of capital
stock occurring subsequent to the end of such Fiscal Period and before any such
purchase or acquisition, but (b) does not mean a purchase or acquisition of
property or assets of the character described in and permitted under SECTION
8.2.9(c).
"MATERIAL SUBSIDIARY" means:
(a) with respect to any Subsidiary of Micro as of the
date of this Agreement, a Subsidiary of Micro that, as of any date of
determination, either (i) on an average over the three most recently
preceding Fiscal Years contributed at least 5% to Consolidated Net
Income or (ii) on an average at the end of the three most recently
preceding Fiscal Years owned assets constituting at least 5% of
Consolidated Assets; and
(b) with respect to any Subsidiary of Micro organized
or acquired subsequent to the date of this Agreement, a Subsidiary of
Micro that as of:
(i) the date it becomes a Subsidiary of Micro,
would have owned (on a pro forma basis if such Subsidiary had
been a Subsidiary of Micro at the end of the preceding Fiscal
Year) assets constituting at least 5% of Consolidated Assets
at the end of the Fiscal Year immediately prior to the Fiscal
Year in which it is organized or acquired; or
(ii) any date of determination thereafter,
either (A) on an average over the three most recently
preceding Fiscal Years (or, if less, since the date such
Person became a Subsidiary of Micro) contributed at least 5%
to Consolidated Net Income, or (B) on an average at the end of
the three (or, if less, such number of Fiscal Year-ends as
have occurred since such Person became a Subsidiary of Micro)
most recently preceding
19 CANADIAN CREDIT AGREEMENT
26
Fiscal Years owned assets constituting at least 5% of
Consolidated Assets;
provided that Xxxxxx Funding Inc., Distribution Funding Corporation, and any
other special purpose financing vehicle shall not be Material Subsidiaries.
"MATURITY" of any of the Obligations means the earliest to occur of:
(a) the date on which such Obligations expressly
become due and payable pursuant hereto or any other Loan Document or,
in the case of any Obligations incurred in respect of any Non-Rata
Revolving Loan, pursuant to the arrangements entered into by the
relevant Borrower and the relevant Lender in connection therewith but
in no event beyond the then Commitment Termination Date with respect
to such Lender;
(b) the Stated Maturity Date (in the case of Pro-Rata
Revolving Loans) where no such due date is specified; and
(c) the date on which such Obligations become due and
payable pursuant to SECTIONS 9.2, 9.3, or 9.4.
"MICRO" is defined in the preamble.
"MICRO CANADA" is defined in the preamble.
"MICRO CANADA GUARANTY (MICRO)" means a guaranty, in the form of
EXHIBIT I-1 hereto, duly executed and delivered by an Authorized Person of
Micro Canada, as amended, supplemented, restated or otherwise modified from
time to time.
"MICRO GUARANTY" means the Guaranty, in the form of EXHIBIT H hereto,
duly executed and delivered by an Authorized Person of Micro, as amended,
supplemented, restated or otherwise modified from time to time.
"MICRO SINGAPORE" means Xxxxxx Micro Singapore Pte Ltd., a corporation
organized and existing under the laws of Singapore.
"MICRO SINGAPORE GUARANTY" means the Guaranty, in the form of EXHIBIT
I-2 hereto, duly executed and delivered by an Authorized Person of Micro
Singapore, as amended, supplemented, restated or otherwise modified from time
to time.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NON-RATA CREDIT EXTENSION" collectively means (a) the making of a
Non-Rata Revolving Loan by any Lender and (b) the issuance by any Lender of a
Non-Rata Letter of Credit.
"NON-RATA DISBURSEMENT DATE" is defined in SECTION 3.5.5.
"NON-RATA LETTER OF CREDIT" is defined in SECTION 3.5.1.
20 CANADIAN CREDIT AGREEMENT
27
"NON-RATA LIMIT" means, on any date, a maximum amount (as such amount
may be reduced from time to time pursuant to SECTION 2.3) equal to 75% of the
Total Credit Commitment Amount.
"NON-RATA REIMBURSEMENT OBLIGATIONS" is defined in SECTION 3.5.6.
"NON-RATA REVOLVING LOANS" is defined in SECTION 3.4.1.
"NON-RATA REVOLVING NOTE" means a promissory note of a Borrower,
payable to a Lender who has requested it under SECTION 4.1, in the form of
EXHIBIT A-2 hereto (as such promissory note may be amended, endorsed, or
otherwise modified from time to time), evidencing the aggregate Indebtedness of
such Borrower to such Lender resulting from outstanding Non-Rata Revolving
Loans, together with all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"NON-RATA USAGE" means, for any Lender and at any time, that portion
of its Outstanding Credit Extensions consisting of Non-Rata Credit Extensions,
if any, that equals but does not exceed the remainder of (a) its Percentage of
the Total Credit Commitment Amount at that time minus (b) its Outstanding
Credit Extensions consisting of Pro-Rata Credit Extensions at that time.
"NOTE" means, as the context may require, a Revolving Note or a
Non-Rata Revolving Note.
"OBLIGATIONS" means, individually and collectively (a) the Loans, (b)
all Letter of Credit Outstandings, (c) all BA Outstandings, and (d) all other
indebtedness, liabilities, obligations, covenants and duties of any Borrower
owing to the Agents or the Lenders of every kind, nature and description, under
or in respect of this Agreement or any of the other Loan Documents including,
without limitation, any fees, whether direct or indirect, absolute or
contingent, due or not due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note.
"OBLIGORS" means, collectively, the Borrowers and Guarantors.
"ORGANIC DOCUMENTS" means, relative to any Obligor, any governmental
filing or proclamation pursuant to which such Person shall have been created
and shall continue in existence (including a charter or certificate or articles
of incorporation or organization, and, with respect to Coordination Center, the
Royal Decree) and its by-laws (or, if applicable, partnership or operating
agreement) and all material shareholder agreements, voting trusts and similar
arrangements to which such Obligor is a party that are applicable to the voting
of any of its authorized shares of capital stock (or, if applicable, other
ownership interests therein).
"OUTSTANDING CREDIT EXTENSIONS" means, relative to any Lender at any
date and without duplication, the sum of the Dollar Amounts of (a) the
aggregate principal amount of all outstanding Loans of such Lender at such
date, plus (b) such Lender's applicable Adjusted Percentages of the aggregate
Stated Amount of all Pro-Rata Letters of Credit that are outstanding and
undrawn (or drawn and unreimbursed) at such date, plus (c) the aggregate Stated
Amount of all Non-Rata Letters of Credit issued by such Lender that are
outstanding and undrawn (or drawn and unreimbursed) at such date, plus (d) the
BA Outstandings owed to that Lender.
"PARTICIPANT" is defined in SECTION 11.11.2.
21 CANADIAN CREDIT AGREEMENT
28
"PAYING LENDER PARTY" is defined in SECTION 5.9.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means a "pension plan," as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(3) of ERISA) and to which any
Obligor or any corporation, trade or business that is, along with Obligor, a
member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor within the meaning of Section 4069 of
ERISA.
"PERCENTAGE" of any Lender means in the case of (a) each Lender which
is a signatory to this Agreement, the percentage set forth opposite such
Lender's signature hereto under the caption "Percentage," subject to any
modification necessary to give effect to any sale, assignment, or transfer made
pursuant to SECTION 11.11.1, or (b) any Transferee Lender, effective upon the
occurrence of the relevant purchase by, or assignment to, such Transferee
Lender, the portion of the Percentage of the selling, assigning or transferring
Lender allocated to such Transferee Lender.
"PERSON" means any natural person, company, partnership, firm, limited
liability company or partnership, association, trust, government, government
agency or any other entity, whether acting in an individual, fiduciary or other
capacity.
"PLAN" means any Pension Plan or Welfare Plan.
"PRO-RATA CREDIT EXTENSION" collectively means (a) the making of
Pro-Rata Revolving Loans by the Lenders, (b) the issuance by any Issuer of a
Pro-Rata Letter of Credit, and (c) the creation by Lenders of Bankers'
Acceptances under SECTION 3.3.
"PRO-RATA DISTRIBUTION EVENT" means, at any time, the existence of
either (a) an Event of Default under SECTION 9.1.1 or 9.1.9 or (b) any Default
for which the Required Lenders have notified the Administrative Agent
(whereupon the Administrative Agent shall promptly notify Micro and the
Lenders) that (i) such Default exists and (ii) the Required Lenders elect to
cause all payment to be applied under SECTION 5.9 as if a Pro-Rata Distribution
Event exists.
"PRO-RATA LETTER OF CREDIT" means an irrevocable letter of credit
issued pursuant to SECTION 3.2.
"PRO-RATA LETTER OF CREDIT COMMITMENT" means, with respect to any
Issuer of Pro-Rata Letters of Credit, such Issuer's obligations to issue
Pro-Rata Letters of Credit pursuant to SECTION 3.2 and, with respect to each of
the other Lenders, the obligations of each such Lender to participate in
Pro-Rata Letters of Credit pursuant to such Section.
"PRO-RATA REVOLVING LOANS" is defined in CLAUSE (a) of SECTION 2.1.
"PRO-RATA REIMBURSEMENT OBLIGATION" is defined in SECTION 3.2.3.
22 CANADIAN CREDIT AGREEMENT
29
"QUARTERLY PAYMENT DATE" means the last day of March, June, September
and December of each calendar year or, if any such day is not a Business Day,
the next succeeding Business Day.
"QUARTERLY REPORT" means a report duly completed, substantially in the
form of EXHIBIT L attached hereto (including, in addition to the information
expressly described in EXHIBIT L hereto, information (including calculations in
accordance with the provisions of the last sentence of SECTION 2.1) regarding
the value of Canadian Dollars of all Outstanding Credit Extensions consisting
of Non-Rata Credit Extensions as of the end of the applicable Fiscal Period),
as such EXHIBIT L may be amended, supplemented, restated or otherwise modified
from time to time.
"REFERENCE LENDERS" means Schedule I Reference Lenders and Schedule II
Reference Lenders.
"REGULATION U" is defined in SECTION 7.17.
"REGULATORY CHANGE" means any change after the date hereof in any (or
the promulgation after the date hereof of any new):
(a) law applicable to any class of banks (of which
any Lender Party is a member) issued by (i) any competent authority in
any country or jurisdiction, or (ii) any competent international or
supra-national authority; or
(b) regulation, interpretation, directive or request
(whether or not having the force of law) applicable to any class of
banks (of which any Lender Party is a member) of any court, central
bank or governmental authority or agency charged with the
interpretation or administration of any law referred to in CLAUSE (a)
of this definition or of any fiscal, monetary or other authority
having jurisdiction over any Lender Party.
"REIMBURSEMENT OBLIGATIONS" collectively means all Pro-Rata
Reimbursement Obligations and Non-Rata Reimbursement Obligations.
"RELEASE" means a "release," as such term is defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended and as in effect from time to time (00 Xxxxxx Xxxxxx Code Section
9601 et seq.), and any rules and regulations promulgated thereunder.
"REMAINING LENDER" is defined in CLAUSE (a) of SECTION 2.2.
"REQUIRED CURRENCY" is defined in SECTION 5.8.1(a).
"REQUIRED LENDERS" means (a) at any time when the Commitments of the
Lenders have expired or been terminated, those Lenders holding at least 65% of
the total Outstanding Credit Extensions of all of the Lenders at that time, and
(b) at any other time, those Lenders whose Percentages total at least 65% at
that time.
"REVOLVING NOTE" means a promissory note of a Borrower, payable to a
Lender who has requested it under SECTION 4.1, in the form of EXHIBIT A-1
hereto (as such promissory note may be amended, endorsed, or otherwise modified
from time to time), evidencing the aggregate Indebtedness of that Borrower to
such Lender resulting from outstanding Pro-Rata Revolving Loans, together with
all
23 CANADIAN CREDIT AGREEMENT
30
other promissory notes accepted from time to time in substitution therefor or
renewal thereof.
"ROYAL DECREE" means the Royal Decree of The Kingdom of Belgium
recognizing Coordination Center as a coordination center under Belgian law, as
the same may from time to time be amended, supplemented or otherwise modified
by any new Royal Decree relating to the recognition of the Coordination Center
as a coordination center under Belgium law.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SCHEDULE I LENDERS" means those Lenders listed on Schedule I to the
Bank Act (Canada).
"SCHEDULE II LENDERS" means those Lenders listed on Schedule II to the
Bank Act (Canada).
"SCHEDULE I REFERENCE LENDERS" means Scotiabank, Royal Bank, and Bank
of Montreal.
"SCHEDULE II REFERENCE LENDERS" means Bank of Tokyo-Mitsubishi
(Canada), Credit Lyonnais Canada, and The Industrial Bank of Japan (Canada).
"SCOTIABANK" is defined in the preamble.
"STATED AMOUNT" for any Letter of Credit on any day means the amount
which is undrawn and available under such Letter of Credit on such day (after
giving effect to any drawings thereon on such day).
"STATED EXPIRY DATE" is defined in SECTION 3.2.
"STATED MATURITY DATE" means, for each Lender, in the case of any
Pro-Rata Revolving Loan, then-effective Commitment Termination Date.
"SUBJECT LENDER" is defined in SECTION 5.12.
"SUBSIDIARY" means, with respect to any Person, any corporation,
company, partnership or other entity of which more than 50% of the outstanding
shares or other ownership interests having by the terms thereof ordinary voting
power to elect a majority of the board of directors of, or other persons
performing similar functions for, such corporation, company, partnership or
other entity (irrespective of whether at the time shares or other ownership
interests of any other class or classes of such corporation, company,
partnership or other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person.
"SYNDICATION AGENT" is defined in the preamble and includes each other
Person as shall have subsequently been appointed as the successor Syndication
Agent pursuant to SECTION 10.4.
"TAX CREDIT" is defined in SECTION 5.7.
24 CANADIAN CREDIT AGREEMENT
31
"TAX PAYMENT" is defined in SECTION 5.7.
"TAXES" is defined in SECTION 5.7.
"TOTAL CREDIT COMMITMENT AMOUNT" means, at any time, $150,000,000, as
such amount may be reduced from time to time pursuant to SECTION 2.3.
"TOTAL INDEBTEDNESS" means, at any date, the aggregate of all
Indebtedness on such date of Micro and its Subsidiaries, without duplication
and after eliminating all offsetting debits and credits between Micro and its
Subsidiaries and all other items required to be eliminated in accordance with
GAAP.
"TOTAL INDEBTEDNESS OF SUBSIDIARIES" means, at any date, the aggregate
of all Indebtedness on such date of all the Subsidiaries of Micro, without
duplication and after eliminating all offsetting debits and credits between
each of such Subsidiaries or between such a Subsidiary and Micro and all other
items required to be eliminated in accordance with GAAP, excluding (a) all
Indebtedness of any Subsidiary of Micro outstanding on October 30, 1996, or
incurred pursuant to any commitment or line of credit in its favor in effect on
October 30, 1996, and any renewals or replacements thereof, so long as such
renewals or replacements do not increase the amount of such Indebtedness or
such commitments or lines of credit and (b) any Indebtedness of Xxxxxx Funding
Inc., Distribution Funding Corporation, or any other special purpose financing
vehicle incurred in connection with their purchase, directly or indirectly,
from Micro or any of Micro's other Subsidiaries, of Trade Accounts Receivable
or interests therein.
"TRADE ACCOUNTS RECEIVABLE" means, with respect to any Person, all
rights of such Person to the payment of money arising out of any sale, lease or
other disposition of goods or rendition of services by such Person.
"TRANSFEREE LENDER" is defined in SECTION 11.11.1.
"TRANSITION AGREEMENTS" means the following -- which were entered into
by Micro, Industries, Entertainment, and certain other Persons in connection
with a series of related transactions through which Micro and Entertainment
ceased to be Subsidiaries of Industries -- each as in effect on the date as of
which it was entered into or, as stated below, amended and restated, without
giving effect to any amendment, modification, or supplement after that date
other than any amendment, modification, or supplement (individually or with all
amendments, modifications, and supplements to any of the following taken as a
whole) does not materially alter the terms of any of the following or adversely
affect Micro or any of its Subsidiaries:
(a) Amended and Restated Exchange Agreement dated as
of September 4, 1996, as amended and restated as of October 17, 1996,
among Industries, Micro, Entertainment, and each other Person listed
on its signature pages.
(b) Amended and Restated Reorganization Agreement
dated as of September 4, 1996, as amended and restated as of October
17, 1996, among Industries, Micro, and Entertainment.
(c) Registration Rights Agreement dated as of
November 6, 1996, among Micro
25 CANADIAN CREDIT AGREEMENT
32
and the other Persons listed on its signature pages.
(d) Board Representation Agreement.
(e) Amended and Restated Stock Option, SAR and ISU
Conversion and Exchange Agreement dated as of September 4, 1996, as
amended and restated as of October 17, 1996, among Industries, Micro,
and Entertainment, and each other Person listed on its signature
pages.
(f) Master Services Agreement dated as of November 6,
1996, between Industries and Micro.
(g) Data Center Services Agreement dated as of
November 6, 1996, among Micro, Xxxxxx Book Company (a division of
Industries), and Entertainment.
(h) Tax Sharing and Tax Services Agreement dated as
of November 6, 1996, among Industries, Entertainment, and Micro.
(i) Employee Benefits Transfer and Assumption
Agreement dated as of November 6, 1996, among Industries, Micro, and
Entertainment.
(j) Risk Management Agreement dated as of November 6,
1996, between among Industries and Micro.
(k) Thrift Plan Liquidity Agreement dated as of
November 6, 1996, between Micro and the Ingram Thrift Plan.
"TYPE" means, relative to any (a) Dollar Loan, the portion thereof, if
any, being maintained as a U.S. Base Rate Loan or a LIBO Rate Loan or (b)
Canadian Dollar Loan, any portion thereof, if any, being maintained as a
Canadian Prime Rate Loan or a BA Loan.
"U.S. BASE RATE" means, on any date and with respect to all U.S. Base
Rate Loans:
(a) made to Micro Canada, a fluctuating rate of
interest per annum equal (i) at all times other than the last five
Business Days of each calendar quarter, either (A) the simple average
rate (rounded upward to the nearest whole multiple of 1/16th% if
necessary) per annum announced and adjusted from time to time by the
Schedule I Reference Lenders as their respective reference rates then
in effect for determining interest rates on Dollar commercial loans
made by them in Canada, or (B) if the Administrative Agent is the only
Schedule I Reference Lender, such reference rate of the Administrative
Agent; and (ii) during the last five Business Days of each calendar
quarter, the higher of either the rate set forth in the preceding
CLAUSE (I) preceding or the Federal Funds Rate plus 0.50%; and
(b) made to Micro, a fluctuating rate of interest per
annum equal (i) at all times other than the last five Business Days of
each calendar quarter, the rate of interest most recently announced or
established by Scotiabank as the reference rate for Dollar loans in
the U.S.; and (ii) during the last five Business Days of each calendar
quarter, the higher of either the rate set forth
26 CANADIAN CREDIT AGREEMENT
33
in the preceding CLAUSE (i) or the Federal Funds Rate plus 0.50%.
The U.S. Base Rate is not necessarily intended to be the lowest rate of
interest determined by and Lender in connection with extensions of credit.
Changes in the rate of interest on that portion of any Pro-Rata Revolving Loans
maintained as U.S. Base Rate Loans will take effect simultaneously with each
change in the applicable U.S. Base Rate. The Administrative Agent will give
notice promptly to Micro and the Lenders of changes in the U.S. Base Rate.
"U.S. BASE RATE LOAN" means a Pro-Rata Revolving Loan bearing interest
at a fluctuating rate of interest determined by reference to the U.S. Base
Rate.
"U.S. CREDIT AGREEMENT" means the Credit Agreement dated as of October
30, 1996, among Micro, Coordination Center, Micro Singapore, Micro Canada, the
various financial institutions parties thereto as lenders, NationsBank and
Scotiabank, respectively, as the administrative agent and the syndication agent
for those lenders, and the co-agents named therein, as renewed, extended,
amended, or restated.
"UNITED STATES" or "U.S." means the United States of America, its
fifty States, and the District of Columbia.
"VOTING STOCK" means, (a) with respect to a corporation, the stock of
such corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect members of the board of directors (or other
governing body) of such corporation, (b) with respect to any partnership, the
partnership interests in such partnership the owners of which are entitled to
manage the affairs of the partnership or vote in connection with the management
of the affairs of the partnership or the designation of another Person as the
Person entitled to manage the affairs of the partnership, and (c) with respect
to any limited liability company, the membership interests in such limited
liability company the owners of which are entitled to manage the affairs of
such limited liability company or entitled to elect managers of such limited
liability company (it being understood that, in the case of any partnership or
limited liability company, "shares" of Voting Stock shall refer to the
partnership interests or membership interests therein, as the case may be).
"WELFARE PLAN" means a "welfare plan," as such term is defined in
Section 3(l) of ERISA.
"WITHDRAWING LENDER" is defined in CLAUSE (a) of SECTION 2.2.
SECTION 1.2 USE OF DEFINED TERMS. Unless otherwise defined or
the context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meaning as when used in the Disclosure Schedule and
in each Credit Extension Request, each other Loan Document, and each notice and
other communication delivered from time to time in connection with this
Agreement or any other Loan Document.
SECTION 1.3 CROSS-REFERENCES. Unless otherwise specified,
references in this Agreement and in each other Loan Document to any Article,
Section, clause or definition are references to such clause or definition of
this Agreement or such other Loan Document, as the case may be, and, unless
otherwise specified, references in any Article, Section, clause or definition
to any section are references to such section of such Article, Section, clause
or definition.
27 CANADIAN CREDIT AGREEMENT
34
SECTION 1.4 ACCOUNTING AND FINANCIAL DETERMINATIONS.
(a) Unless otherwise specified, all accounting terms
used herein or in any other Loan Document shall be interpreted, and
all accounting determinations and computations hereunder or thereunder
(including under SECTION 8.2.3) shall be made, in accordance with
those U.S. generally accepted accounting principles ("GAAP") as
applied in the preparation of the financial statements of Micro and
its Consolidated Subsidiaries delivered pursuant to CLAUSE (a) of
SECTION 6.1.5; provided that the financial statements required to be
delivered pursuant to CLAUSES (a) and (b) of SECTION 8.1.1 shall be
prepared in accordance with GAAP as in effect from time to time and
the quarterly financial statements required to be delivered pursuant
to CLAUSE (b) of SECTION 8.1.1 are not required to contain footnote
disclosures required by GAAP and shall be subject to ordinary year-end
adjustments.
(b) If, after the date hereof, there shall be any
change to Micro's Fiscal Year, or any modification in GAAP used in the
preparation of the financial statements delivered pursuant to CLAUSE
(A) of SECTION 6.1.5 (whether such modification is adopted or imposed
by FASB, the American Institute of Certified Public Accountants or any
other professional body) which changes result in a change in the
method of calculation of financial covenants, standards or terms found
in this Agreement, the parties hereto agree promptly to enter into
negotiations in order to amend such financial covenants, standards or
terms so as to reflect equitably such changes, with the desired result
that the evaluations of Micro's financial condition shall be the same
after such changes as if such changes had not been made; provided
that, until the parties hereto have reached a definitive agreement on
such amendments, Micro's financial condition shall continue to be
evaluated on the same principles as those used in the preparation of
the financial statements delivered pursuant to CLAUSE (a) of SECTION
6.1.5.
SECTION 1.5 CALCULATIONS. Unless otherwise expressly stated
to the contrary in this Agreement or in any other Loan Document, all
calculations made for purposes of this Agreement, each other Loan Document and
the transactions contemplated hereby and thereby shall be made to two decimal
places.
SECTION 1.6 AMOUNTS IN CANADIAN DOLLARS. Unless otherwise
specifically stated in this Agreement or any other Loan Document, each
requirement that Credit Extensions, repayments, and reductions in Commitments
be in certain Dollar minimums and integral multiples shall, in respect of
dealings in Canadian Dollars, be deemed to be amounts (not the Dollar Amount)
stated in Canadian Dollars.
ARTICLE II
COMMITMENTS, ETC.
SECTION 2.1 COMMITMENTS. On the terms and subject to the
conditions of this Agreement (including ARTICLE VI), each Lender severally
agrees that it will, from time to time on any Business Day occurring prior to
the Commitment Termination Date:
(a) make loans in Dollars or Canadian Dollars
("PRO-RATA REVOLVING LOANS")
28 CANADIAN CREDIT AGREEMENT
35
to either Borrower equal to such Lender's Adjusted Percentage of the
aggregate amount of the Borrowing to be made on such Business Day, all
in accordance with SECTION 3.1; provided that no Lender shall be
permitted or required to make any Pro-Rata Revolving Loan if, after
giving effect thereto:
(i) such Lender's Outstanding Credit Extensions
consisting of Pro-Rata Credit Extensions would exceed an
amount equal to such Lender's Percentage multiplied by the
then Total Credit Commitment Amount; or
(ii) the aggregate outstanding Credit Extensions
of all the Lenders would exceed the then Total Credit
Commitment Amount;
(b) issue Bankers' Acceptances in Canadian Dollars to
Micro Canada equal to such Lender's Adjusted Percentage of such Credit
Extensions consisting of Bankers' Acceptances in accordance with
SECTION 3.3; and
(c) purchase participation interests in Dollars or
Canadian Dollars equal to its Adjusted Percentage in each Pro-Rata
Letter of Credit issued upon the application of either Borrower
pursuant to SECTION 3.1; provided that no Issuer (with respect to Pro-
Rata Letters of Credit) shall issue a Pro-Rata Letter of Credit if,
after giving effect thereto:
(i) the aggregate Letter of Credit Outstandings
would exceed the then Letter of Credit Limit; or
(ii) the aggregate Outstanding Credit Extensions
of all the Lenders would exceed the then Total Credit
Commitment Amount.
On and subject to the conditions hereof, the Borrowers may from time to time
borrow, prepay and reborrow Pro-Rata Revolving Loans and may apply for,
extinguish or reimburse drawings made under and re-apply for Pro-Rata Letters
of Credit. For purposes of this SECTION 2.1 and SECTION 3.4.3, the Dollar
Amount on any date of any Credit Extension denominated in Canadian Dollars
shall be calculated based upon the spot rate at which Dollars are offered on
such day for Canadian Dollars that appears on Telerate Page 261 at
approximately 11:00 a.m. (Toronto time) (and if such spot rate is not available
on Telerate Page 261 as of such time, such spot rate as quoted by Scotiabank,
in Toronto at approximately 11:00 a.m. Toronto time).
SECTION 2.2 EXTENSIONS OF THE COMMITMENT TERMINATION DATE.
(a) If the Commitment Termination Date has not
occurred, Micro may -- on any Business Day occurring after May 1st and
before June 30th of the year (for purposes of this SECTION 2.2, the
"THEN-CURRENT YEAR") immediately preceding the year in which the
then-effective Commitment Termination Date occurs -- deliver to each
Lender (with a copy to the Administrative Agent) three counterparts of
a Commitment Extension Request appropriately completed. That
Commitment Extension Request may be for a one-year (365- day or, if
appropriate, 366-day) period, for a two-year (730-day or, if
appropriate 731-day) period, or for one or both in the same Commitment
Extension Request (each a requested "EXTENSION PERIOD"). The
Commitment Extension Request shall be delivered in accordance with
SECTION 11.2, except
29 CANADIAN CREDIT AGREEMENT
36
that acknowledgment of receipt by the recipient is required before it
is deemed to have been delivered.
(i) By July 31st of the then-current year, each
Lender shall (by appropriately completing, executing, and
delivering to Micro and the Administrative Agent the
Commitment Extension Request delivered to it) indicate whether
or not it intends to extend its Commitment pursuant to this
SECTION 2.2 in respect of either of the one or two Extension
Periods requested by Micro. Any Lender failing to return its
Commitment Extension Request to Micro as provided in the
preceding sentence shall be deemed to have declined the
extension of its Commitment as contemplated by this SECTION
2.2 in respect of each of the Extension Periods requested by
Micro.
(ii) By August 15th of the then-current year,
the Administrative Agent shall notify (for purposes of this
SECTION 2.2, the "LENDER BALLOT NOTICE") all of the Lenders as
to (A) the identity of each Lender who has indicated its
intention not to extend its Commitment in respect of either of
the one or two Extension Periods requested by Micro
("WITHDRAWING LENDER"), (B) each Lender who has agreed to
extend its Commitment in respect of one or both of the
Extension Periods requested by Micro ("REMAINING LENDER"), and
(C) which Remaining Lender has agreed to which Extension
Period if two were requested by Micro.
(b) If, as of the date the Administrative Agent
delivers the Lender ballot notice, neither Scotiabank nor Royal Bank
shall be a Remaining Lender and the Remaining Lenders in respect of
each Extension Period requested by Micro shall hold less than a total
of 65% of the Commitments, then, by August 31st of the then-current
year, each Remaining Lender may revoke (by delivering written notice
thereof to Micro and the Administrative Agent) its consent to
extension of its Commitment for each of the Extension Periods
requested by Micro, thereby becoming a Withdrawing Lender as of the
day of that revocation.
(i) After the date that the Administrative
Agent delivers the Lender ballot notice and by September 15th
of the then-current year, the Remaining Lenders may assume any
Withdrawing Lender's Commitment in proportion to their
respective share of those Remaining Lenders' Commitments.
(ii) If, as of September 30th of the
then-current year, the Remaining Lenders in respect of each
Extension Period requested by Micro hold less than a total of
65% of the Commitments (after giving effect to any assumptions
of any Withdrawing Lenders' Commitment under the preceding
sentence on or before that date), then (A) all of the
Lenders' Commitments shall terminate and (B) any Outstanding
Credit Extensions shall mature and be payable in full on the
then- effective Commitment Termination Date.
(iii) A one-year Extension Period does not
automatically become effective if a Commitment Extension
Request for a two-year period fails to become effective as
provided in this CLAUSE (B), and vice versa.
(c) If, as of September 30th of the then-current
year, the Remaining Lenders in respect of an Extension Period
requested by Micro hold a total of at least 65% of the Commitments
(after giving effect to any assumptions of the Commitments of any
Withdrawing
30 CANADIAN CREDIT AGREEMENT
37
Lenders' Commitments under CLAUSE (b) above on or before that date),
THEN each Remaining Lender's Commitment (including any Commitments
assumed by any Remaining Lender under CLAUSE (b) above) shall be
extended for that Extension Period from the then-effective Commitment
Termination Date, subject to CLAUSE (f) below.
(i) If the requirements for extension of the
Commitments shall be satisfied, then -- after October 1st of
the then-current year but by 30 days before the then-effective
Commitment Termination Date -- Micro may enter into an
agreement with one or more new financial institutions
reasonably acceptable to the Agents or with any Remaining
Lender to assume the Withdrawing Lenders' Commitments that
have not been assumed under CLAUSE (b) above.
(ii) Any Commitments assumed by Remaining
Lenders or new financial institutions under CLAUSE (i) above
shall be extended for the foregoing Extension Period from the
then-effective Commitment Termination Date, subject to CLAUSE
(f) below.
(iii) If Micro requests both a one-year and a
two-year Extension Period and both would become effective
under this section, then the two-year Extension Period shall
become effective under this section; provided that any Lender
that did not agree to a two-year Extension Period but that did
agree to a one-year Extension Period shall then become a
Withdrawing Lender.
(d) If the Commitments are extended in accordance
with this section, then Outstanding Credit Extensions made by any
Withdrawing Lender that are not assumed or purchased under CLAUSE (b)
or (c) above shall mature and be payable in full on the then-
effective Commitment Termination Date, and the Commitments of each
such Withdrawing Lender shall thereupon terminate.
(i) On the then-effective Commitment
Termination Date, the Total Credit Commitment Amount shall be
automatically reduced by an amount equal to the product of (A)
the total Percentages of all the Withdrawing Lenders that were
not assumed or purchased under CLAUSES (b) or (c) above times
(B) the Total Credit Commitment Amount on that Commitment
Termination Date immediately before that calculation.
(ii) The Percentages of the Remaining Lenders
shall be adjusted by the Administrative Agent based upon each
such Remaining Lender's pro rata share of the remaining Total
Credit Commitment Amount.
(e) Each Lender's decision to extend its Commitment
or assume or purchase any Withdrawing Lender's Commitment shall be
exercised by it in its sole and absolute discretion without reference
to any stated desires of any other Lender Party or Micro. All
assignments made under this SECTION 2.2 shall be made in accordance
with SECTION 11.11.1, except that any such assignment (i) may be in
any minimum or multiple amount resulting from the operation of this
SECTION 2.2 and (ii) shall not require the consent of Micro or the
Administrative Agent.
(f) Any extension of Commitments under this SECTION
2.2 shall become effective only upon (i) the satisfaction of the
requirements for extension stated above and (ii) the delivery by Micro
to the Administrative Agent and each Lender, on or before the
then-effective
31 CANADIAN CREDIT AGREEMENT
38
Commitment Termination Date, of copies of such other legal opinions,
approvals, instruments, or documents as the Agents may reasonably
request.
SECTION 2.3 REDUCTIONS OF THE COMMITMENT AMOUNTS. Micro may,
from time to time on any Business Day, voluntarily reduce the Total Credit
Commitment Amount; provided that:
(a) All such reductions shall require at least three
and not more than five Business Days' prior notice to the
Administrative Agent and shall be permanent, and any partial reduction
thereof shall be in a minimum amount of $10,000,000 and in an integral
multiple of $1,000,000 (or, if less, in an amount equal to the Total
Credit Commitment Amount at such time);
(b) Micro shall not voluntarily reduce the Total
Credit Commitment Amount, pursuant to this section to an amount which,
on the date of proposed reduction, is less than the aggregate
Outstanding Credit Extensions of all the Lenders; and
(c) Once so reduced, the Total Commitment Amount may
not be increased.
SECTION 2.4 DOLLARS UNAVAILABLE. Notwithstanding any other
provision in this Agreement, if, at any time before the Commitment Termination
Date, the Administrative Agent determines that Dollars have ceased to be freely
convertible into Canadian Dollars, then the Administrative Agent may (in its
sole discretion) at any time so notify the relevant Borrower and the Lenders of
any Borrowing denominated in Dollars, and (b) the Commitments of the Lenders to
make Pro-Rata Revolving Loans in Dollars shall be suspended unless and until
the Administrative Agent determines that Dollars are once again freely
convertible into Canadian Dollars. Promptly after receiving that notice (but
not earlier than the last day of the applicable Interest Period, if any), the
relevant Lenders shall convert that Borrowing into Canadian Dollars or any
other currency as the Administrative Agent may have selected for which there is
an active foreign exchange and deposit market in Toronto or New York City. The
conversion shall be effected at the relevant spot rate at which Dollars are
offered on the relevant day for Canadian Dollars (or that other selected
currency) that appears on Telerate Page 261 at approximately 11:00 a.m. Toronto
time (and if such spot rate is not available on Telerate Page 261 as of that
time, the spot rate as quoted by Scotiabank in Toronto at approximately 11:00
a.m. Toronto time) or, if that spot rate shall not exist, such other rate of
exchange as the Administrative Agent shall reasonably determine.
ARTICLE III
PROCEDURES FOR PRO-RATA CREDIT EXTENSIONS AND
PROVISIONS FOR NON-RATA CREDIT EXTENSIONS
SECTION 3.1 BORROWING PROCEDURE FOR PRO-RATA REVOLVING LOANS.
(a) On any Business Day occurring on or prior to the
Commitment Termination Date, either Borrower may from time to time
irrevocably request, by delivering on or prior to 1:00 p.m., Toronto
time, on such Business Day a Borrowing Request to the Administrative
Agent (i) in the case of LIBO Rate Loans, not less than three nor more
than five Business Days before
32 CANADIAN CREDIT AGREEMENT
39
the date of the proposed Borrowing, or (ii) in the case of U.S. Base
Rate Loans and Canadian Prime Rate Loans, on or before the Business
Day of but not more than three Business Days before the date of the
proposed Borrowing, that a Borrowing be made in a minimum amount of
$10,000,000 and an integral multiple of $1,000,000, or if less, in the
unused amount of the Total Credit Commitment Amount. Each Borrowing
Request shall also contain a summary of the then total of all
Outstanding Credit Extensions consisting of Non-Rata Credit
Extensions. Upon the receipt of each Borrowing Request, the
Administrative Agent shall give prompt notice thereof to each Lender
on the same day such Borrowing Request is received. On the terms and
subject to the conditions of this Agreement, each Borrowing shall be
comprised of the Types of Loans and shall be made on the Business Day
specified in such Borrowing Request, provided that Credit Extensions
of Canadian Dollars must be by way of Canadian Prime Rate Loans or
Bankers' Acceptances and Credit Extensions in Dollars must be by way
of U.S. Base Rate Loans or LIBO Rate Loans. On or before 2:30 p.m.,
Toronto time, on such Business Day, each Lender shall deposit with the
Administrative Agent (to an account specified by the Administrative
Agent to each Lender from time to time) same day funds in an amount
equal to such Lender's Adjusted Percentage of the requested Borrowing.
(b) To the extent funds are received from the Lenders
(except as otherwise provided in SECTION 10.2), the Administrative
Agent shall make such funds available to the relevant Borrower by wire
transfer of same day funds to the accounts the relevant Borrower shall
have specified in its Borrowing Request. No Lender's obligation to
make any Pro-Rata Revolving Loan shall be affected by any other
Lender's failure to make any Pro-Rata Revolving Loan.
SECTION 3.2 PRO-RATA LETTER OF CREDIT ISSUANCE PROCEDURES.
By delivering to the Administrative Agent an Issuance Request on or before 1:00
p.m., Toronto time, on any Business Day occurring prior to the Commitment
Termination Date, either Borrower may from time to time request that an Issuer
issue a Pro-Rata Letter of Credit. Each such request shall be made on not less
than two Business Days' notice (or such shorter period as may be agreed to by
the Administrative Agent), and not less than 30 days prior to the Commitment
Termination Date. Upon receipt of an Issuance Request, the Administrative
Agent shall promptly on the same day notify the applicable Issuer and each
Lender thereof. Each Pro-Rata Letter of Credit shall by its terms be
denominated in Dollars or Canadian Dollars and be stated to expire (whether
originally or after giving effect to any extension) on a date (its "STATED
EXPIRY DATE") no later than three days prior to the Commitment Termination
Date. The relevant Borrower and the relevant Issuer may amend or modify any
issued Pro-Rata Letter of Credit upon written notice to the Administrative
Agent only; provided that (A) any amendment constituting an extension of such
Pro-Rata Letter of Credit's Stated Expiry Date shall comply with the provisions
of the immediately preceding sentence and may be made only if the Commitment
Termination Date has not occurred and (B) any amendment constituting an
increase in the Stated Amount of such Pro-Rata Letter of Credit shall be deemed
a request for the issuance of a new Pro-Rata Letter of Credit and shall comply
with the foregoing provisions of this paragraph. Upon satisfaction of the
terms and conditions hereunder, the relevant Issuer will issue each Pro-Rata
Letter of Credit to be issued by it and will make available to the beneficiary
thereof the original of such Pro-Rata Letter of Credit.
SECTION 3.2.1 OTHER LENDERS' PARTICIPATION. Automatically, and
without further action, upon the issuance of each Pro-Rata Letter of Credit,
each Lender (other than the Issuer of such Pro-Rata Letter of Credit) shall be
deemed to have irrevocably purchased from the relevant Issuer, to the extent of
33 CANADIAN CREDIT AGREEMENT
40
such Lender's Adjusted Percentage, a participation interest in such Pro-Rata
Letter of Credit (including any Pro-Rata Reimbursement Obligation and any other
Contingent Liability with respect thereto), and such Lender shall, to the
extent of its Adjusted Percentage, be responsible for reimbursing promptly (and
in any event within one Business Day after receipt of demand for payment from
the Issuer, together with accrued interest from the day of such demand) the
relevant Issuer for any Pro-Rata Reimbursement Obligation which has not been
reimbursed in accordance with SECTION 3.2.3. In addition, such Lender shall,
to the extent of its Adjusted Percentage, be entitled to receive a ratable
portion of the Pro-Rata Letter of Credit participation fee payable pursuant to
CLAUSE (a) of SECTION 4.3.3 with respect to each Pro-Rata Letter of Credit and
a ratable portion of any interest payable pursuant to SECTIONS 3.2.2 and 4.2.
SECTION 3.2.2 DISBURSEMENTS. Subject to the terms and
provisions of each Pro-Rata Letter of Credit and this Agreement, upon
presentment under any Pro-Rata Letter of Credit to the Issuer thereof for
payment, such Issuer shall make such payment to the beneficiary (or its
designee) of such Pro-Rata Letter of Credit on the date designated for such
payment (the "DISBURSEMENT DATE"). Such Issuer will promptly notify the
relevant Borrower and each of the Lenders of the presentment for payment of any
such Pro-Rata Letter of Credit, together with notice of the Disbursement Date
thereof. Prior to 12:00 noon, Toronto time, on the next Business Day following
the Disbursement Date, the relevant Borrower will reimburse the Administrative
Agent, for the account of such Issuer, for all amounts disbursed under such
Pro-Rata Letter of Credit, together with all interest accrued thereon since the
Disbursement Date. To the extent the Administrative Agent does not receive
payment in full, on behalf of the relevant Issuer on the Disbursement Date, the
relevant Borrower's Pro-Rata Reimbursement Obligation shall accrue interest,
payable on demand, at an annual rate equal to the U.S. Base Rate (for a Letter
of Credit denominated in Dollars) or the Canadian Prime Rate (for a Letter of
Credit denominated in Canadian Dollars) through the first Business Day
following the Disbursement Date and equal to the sum of the U.S. Base Rate (for
a Letter of Credit denominated in Dollars) or the Canadian Prime Rate (for a
Letter of Credit denominated in Canadian Dollars) plus 0.50% thereafter. In
the event the relevant Borrower fails to notify the Administrative Agent and
the relevant Issuer prior to 1:00 p.m., Toronto time, on the Disbursement Date
that the relevant Borrower intends to pay the Administrative Agent, for the
account of such Issuer, for the amount of such drawing with funds other than
proceeds of Pro-Rata Revolving Loans, or the Administrative Agent does not
receive such reimbursement payment from the relevant Borrower prior to 1:00
p.m., Toronto time on the Disbursement Date (or if the relevant Issuer must for
any reason return or disgorge such reimbursement), the Administrative Agent
shall promptly notify the Lenders, and the relevant Borrower shall be deemed to
have given a timely Borrowing Request as of the Disbursement Date for Pro-Rata
Revolving Loans in an aggregate principal amount equal to such Pro-Rata
Reimbursement Obligation and the Lenders (including the relevant Issuer) shall,
on the terms and subject to the conditions of this Agreement (including,
without limitation, SECTIONS 6.1 and 6.2 hereof), make Pro-Rata Revolving Loans
in the amount of such Pro-Rata Reimbursement Obligation as provided in SECTION
3.1; provided that, for the purpose of determining the availability of any
unused Total Credit Commitment Amount immediately prior to giving effect to the
application of the proceeds of such Pro-Rata Revolving Loans, such Pro-Rata
Reimbursement Obligation shall be deemed not to be outstanding at such time.
In the event that the conditions precedent to any Pro-Rata Revolving Loans
deemed requested by the relevant Borrower as provided in the preceding sentence
shall not be satisfied at the time of such deemed request, the Lenders
(including the relevant Issuer) shall make demand loans on such date for the
benefit of the relevant Borrower, ratably, in accordance with their respective
Adjusted Percentages, which loans shall: (a) aggregate in principal amount an
amount equal to the applicable Pro-Rata Reimbursement Obligations; (b) be
applied solely to the prompt satisfaction of such Pro-Rata Reimbursement
Obligations; (c) be payable by the relevant Borrower upon demand; and (d)
accrue
34 CANADIAN CREDIT AGREEMENT
41
interest on the unpaid principal amount thereof from (and including) the date
on which such demand loan is made until the date such loan is paid by the
relevant Borrower in full, at an annual rate equal to the U.S. Base Rate (for a
Letter of Credit denominated in Dollars) or the Canadian Prime Rate (for a
Letter of Credit denominated in Canadian Dollars) plus 2%.
SECTION 3.2.3 REIMBURSEMENT. The obligation (the "PRO-RATA
REIMBURSEMENT OBLIGATION") of the relevant Borrower under SECTION 3.2.2 to
reimburse the relevant Issuer with respect to each disbursement under a
Pro-Rata Letter of Credit (including interest thereon), and, upon the failure
of the relevant Borrower to reimburse such Issuer, the obligation of each
Lender to reimburse such Issuer, shall be absolute and unconditional under any
and all circumstances and irrespective of any set-off, counterclaim or defense
to payment which the relevant Borrower or such Lender, as the case may be, may
have or have had against the relevant Issuer or any Lender, including any
defense based upon the failure of any disbursement under a Pro-Rata Letter of
Credit to conform to the terms of the applicable Pro-Rata Letter of Credit (if,
in the relevant Issuer's good faith opinion, such disbursement is determined to
be appropriate) or any non-application or misapplication by the beneficiary of
the proceeds of such Pro-Rata Letter of Credit; provided that nothing herein
shall require the relevant Borrower or such Lender, as the case may be, to
reimburse an Issuer for any wrongful disbursement made by such Issuer under a
Pro-Rata Letter of Credit as a result of acts or omissions finally determined
by a court of competent jurisdiction to constitute gross negligence or willful
misconduct on the part of such Issuer.
SECTION 3.2.4 DEEMED DISBURSEMENTS. Upon the occurrence and
during the continuation of any Event of Default of the type described in
SECTION 9.1.9 or, with notice from the Administrative Agent given at the
direction of the Required Lenders, upon the occurrence and during the
continuation of any other Event of Default, an amount equal to the then
aggregate amount of all Letters of Credit (including Non-Rata Letters of
Credit) which are undrawn and available under all issued and outstanding
Letters of Credit shall, without demand upon or notice to any Borrower, be
deemed to have been paid or disbursed by the Issuer under such Letters of
Credit (notwithstanding that such amount may not in fact have been so paid or
disbursed) and the Borrowers shall be immediately obligated to pay to the
Issuer of each Letter of Credit an amount equal to such amount. Any amounts so
payable by the relevant Borrower pursuant to this section shall be deposited in
cash with the Administrative Agent and held in trust (for the sole benefit of
the relevant Issuer and the Lenders) for payment of the Obligations arising in
connection with such Letters of Credit. If such Event of Default shall have
been cured or waived (and provided no other Default has occurred and is
continuing and the Obligations have not been accelerated pursuant to SECTION
9.2 or 9.3), the Administrative Agent shall promptly return to the relevant
Borrower all amounts deposited by it with the Administrative Agent pursuant to
this clause (together with accrued interest thereon at the Federal Funds Rate
or such other interest rate based upon a cash equivalent investment (in the
form of obligations issued by or guaranteed by the U.S. or any Canadian federal
or provincial government, commercial paper of a domestic corporation rated A-1
by S&P or a comparable rating from another nationally recognized rating agency
or certificates of deposit of a U.S. or Canadian bank with (x) a credit rating
of Aa or better by S&P or a comparable rating from another nationally
recognized rating agency and (y) a combined capital and surplus greater than
$250,000,000) which is agreed to between the relevant Issuer and the relevant
Borrower), net of any amount (which may include accrued interest) applied to
the payment of any Obligations with respect to the Pro-Rata Letters of Credit.
SECTION 3.2.5 NATURE OF REIMBURSEMENT OBLIGATIONS. Each
Borrower and, to the extent set forth in SECTION 3.2.1, each Lender shall
assume all risks of the acts, omission or misuse of any Letter of Credit by the
beneficiary thereof. No Issuer (with respect to Pro-Rata Letters of Credit and
Non-Rata
35 CANADIAN CREDIT AGREEMENT
42
Letters of Credit) or any Lender (except to the extent of its own gross
negligence or willful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for an issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or
the rights or benefits thereunder or the proceeds thereof in whole or
in part, which may prove to be invalid or ineffective for any reason:
(c) failure of the beneficiary to comply fully with
conditions required in order to demand payment under a Letter of
Credit; provided that, if a payment is made pursuant to such Letter of
Credit when a beneficiary has failed to comply with the conditions
therefor and such failure to comply is manifest on the face of such
Letter of Credit or the documents submitted by the beneficiary in
connection therewith, the relevant Borrower shall be required to
indemnify the Issuer in connection therewith only if, and to the
extent, the relevant Borrower or any of its Subsidiaries has received
the benefit of such payment on such Letter of Credit by one or more of
their obligations being satisfied, either in whole or in part;
(d) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, telecopy or
otherwise; or
(e) any loss or delay in the transmission or
otherwise of any document or draft required in order to make a
disbursement under a Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Lender hereunder. In furtherance
and extension and not in limitation or derogation of any of the foregoing (but
subject to the limitations set forth in CLAUSE (c) above), any action taken or
omitted to be taken by an Issuer in good faith (and not constituting gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction) shall be binding upon the relevant Borrower and, with respect to
Pro- Rata Letters of Credit, each Lender, and shall not put such Issuer under
any resulting liability to either Borrower or, with respect to Pro- Rata
Letters of Credit, any Lender.
SECTION 3.2.6 DOLLARS UNAVAILABLE. Notwithstanding any other
provision contained in this Agreement, if, at any time prior to the Commitment
Termination Date, any Lender determines that Dollars have ceased to be freely
convertible into Canadian Dollars, then such Lender may (in its sole
discretion) at any time notify the Administrative Agent and the Borrowers of
the same, and the Administrative Agent shall then promptly notify each other
Lender. The relevant Borrower shall use reasonable efforts to cause the
beneficiary of each Pro-Rata Letter of Credit denominated in Dollars to accept
a substitution for such Pro-Rata Letter of Credit with another Pro-Rata Letter
of Credit denominated in Canadian Dollars.
SECTION 3.3 PRO-RATA BANKERS' ACCEPTANCE PROCEDURES.
36 CANADIAN CREDIT AGREEMENT
43
SECTION 3.3.1 NOTICE. Micro Canada may pursuant to this
SECTION 3.3, on any Business Day prior to the Commitment Termination Date
notify the Administrative Agent, in writing not later than 11:00 a.m., Toronto
time, two Business Days prior to the requested Credit Extension, that it
requests the issuance of, a rollover of, or a conversion into, Bankers'
Acceptances. If the Administrative Agent receives a request for the issuance
of, a rollover of, or a conversion into, Bankers' Acceptances, the
Administrative Agent shall notify each of the Lenders, prior to 11:00 a.m.,
Toronto time, on the first Business Day prior to the date of such Credit
Extension of such request and of each Lender's Percentage of such Credit
Extension. The Administrative Agent shall also at such time notify the
relevant Borrower of each Lenders' Percentage of such Credit Extension. Micro
Canada shall not request a Bankers' Acceptance Credit Extension, and no Lender
shall be permitted or required to create, any Bankers' Acceptances if, after
giving effect thereto:
(a) such Lender's Outstanding Credit Extensions would
exceed an amount equal to such Lender's Percentage multiplied by the
then Total Credit Commitment Amount; or
(b) the aggregate outstanding Credit Extensions of
all the Lenders would exceed the then Total Credit Commitment Amount.
SECTION 3.3.2 FUNDING OF BANKERS' ACCEPTANCES. Each Lender
shall, not later than 11:00 a.m., Toronto time, on the date of each Credit
Extension by way of Bankers' Acceptance, accept drafts of Micro Canada which
are presented to it for acceptance and which have an aggregate face amount
equal to such Lender's Adjusted Percentage of the total Credit Extension being
made available by way of Bankers' Acceptances on such date. With respect to
each issuance of, rollover of, or conversion into, Bankers' Acceptances, each
Lender shall not be required to accept any draft which has a Face Amount which
is not in an integral multiple of $100,000. At any given time, outstanding
Bankers' Acceptances shall not have more than four different terms. Each
Lender shall purchase the Bankers' Acceptances which it has accepted for a
purchase price equal to the BA Discounted Proceeds therefor. Each Lender may
at any time and from time to time hold, sell, rediscount, or otherwise dispose
of any and all Bankers' Acceptances accepted and purchased by it. In the case
of an issuance, each Lender shall, upon retention of the Bankers' Acceptances
as aforesaid, make available to the Administrative Agent its Percentage of the
BA Proceeds with respect to such Credit Extension. The Administrative Agent
shall make such BA Proceeds available to Micro Canada by wire transfer to the
accounts the relevant Borrower shall have specified in its Drawing Notice.
Notwithstanding any other provision among the Lenders, the Bankers' Acceptances
to be issued in such manner and amounts as the Administrative Agent may, in its
sole and unfettered discretion acting reasonably, consider necessary, rounding
up or down, so as to ensure that no Lender is required to accept a Bankers'
Acceptance for a fraction of $100,000 and, in such event, the Lenders' Adjusted
Percentages with respect to such Bankers' Acceptances shall be adjusted
accordingly.
SECTION 3.3.3 NOTICE IRREVOCABLE. Each Drawing Notice shall be
irrevocable and binding on Micro Canada.
SECTION 3.3.4 PAYMENT OF BANKERS' ACCEPTANCES. Micro Canada
shall provide for payment to each Lender of the Face Amount of each Bankers'
Acceptance accepted by it at such Bankers' Acceptance's maturity, either by
payment of such amount or through a Credit Extension hereunder or through a
combination of both. Micro Canada hereby waives presentment by each Lender and
any defense to payment of amounts due to such Lender in respect of the Bankers'
Acceptances which
37 CANADIAN CREDIT AGREEMENT
44
might exist by reason of such Bankers' Acceptances being held at maturity by
such Lender and agrees not to claim from such Lender any days of grace for the
payment at maturity of Bankers' Acceptances.
SECTION 3.3.5 FORM OF BANKERS' ACCEPTANCES. Any Bankers'
Acceptance may, at the option of Micro Canada, be executed in advance by Micro
Canada by mechanically reproduced or facsimile signatures of any two officers
of Micro Canada who are properly so designated and authorized to sign by Micro
Canada from time to time. Any Bankers' Acceptance so executed and delivered by
Micro Canada to a Lender shall be valid and shall bind Micro Canada and may be
dealt with by the Administrative Agent or any Lender with all intents and
purposes as if the Bankers' Acceptance had been signed in the executing
officers' own handwriting.
SECTION 3.3.6 BA LOANS. If, in the sole judgment of a Lender,
such Lender is unable, as a result of applicable law or customary market
practice, to extend credit by way of Bankers' Acceptance (including, without
limitation, by way of rollover of Bankers' Acceptances or conversion into
Bankers' Acceptances) in accordance with this Agreement, such Lender shall give
notice to such effect to the Administrative Agent and Micro Canada prior to
10:00 a.m., Toronto time, on the date of the requested Credit Extension (which
notice may if so stated therein, remain in effect with respect to subsequent
requests for Credit Extension by way of Bankers' Acceptance until revoked by
notice to the Administrative Agent and Micro Canada) and shall make available
to the Borrowers prior to 11:00 a.m., Toronto time, on the date of the
requested Credit Extension a Canadian Dollar loan (a "BA LOAN") in the
principal amount equal to such Lender's Adjusted Percentage of the total amount
of credit requested to be extended by way of Bankers' Acceptance, such BA Loan
to be funded in the same manner as a Bankers' Acceptance issued pursuant to
SECTION 3.3.2. Such BA Loan shall have the same term as the Bankers'
Acceptances for which it is a substitute and shall permit such Lender to obtain
the same effective rate as if such Lender had accepted and purchased a Bankers'
Acceptance at the same acceptance fee rate received by the other Lenders and at
a discount from the Face Amount of such Bankers' Acceptance calculated at a
discount rate per annum equal to the BA Schedule II Discount Rate if such
Lender is a Schedule II Lender), or the BA Schedule I Discount Rate (if such
Lender is not a Schedule II Lender), as the case may be, for the term of such
Bankers' Acceptance, on the basis that, and Micro Canada hereby agrees that,
for such a BA Loan, interest shall be payable in advance on the date of such
extension of credit by such Lender deducting the interest payable in respect
thereof from the principal amount of such BA Loan. For greater certainty, the
net amount to be made available by each such Lender on any date in respect of a
BA Loan made by it on such date shall be the same as the amount that such
Lender would have been required to make available to Micro Canada as its
Adjusted Percentage of BA Discounted Proceeds had such Lender been able to
extend credit by way of Bankers' Acceptance on such date.
SECTION 3.3.7 MICRO CANADA'S RIGHT TO MARKET BANKERS'
ACCEPTANCES. Micro Canada shall have the option to market Bankers' Acceptances
independently. In doing so, Micro Canada shall, in its Drawing Notice notify
the Administrative Agent of the information required for Credit Extensions by
way of Bankers' Acceptances hereunder, and on the proposed date of any such
Credit Extension, the identity of the purchasers of such Bankers' Acceptances,
and the settlement instructions in connection therewith. The right of Micro
Canada to market its own Bankers' Acceptances shall be in addition to, and not
in substitution of, the obligation of the Lenders to purchase Bankers'
Acceptances if and when requested by Micro Canada. Each Lender may at any time
and from time to time hold, sell, rediscount, or otherwise dispose of any or
all Bankers' Acceptances accepted and purchased by it.
38 CANADIAN CREDIT AGREEMENT
45
SECTION 3.4 NON-RATA REVOLVING LOAN FACILITY.
SECTION 3.4.1 NON-RATA REVOLVING LOANS. Any Borrower may from
time to time, on any Business Day prior to the Commitment Termination Date,
request that any Lender make a Loan under this Agreement (relative to such
Lender, a "NON-RATA REVOLVING LOAN") denominated in Dollars or Canadian
Dollars. The Borrower shall make such request to the applicable office of such
Lender set forth on that Lender's signature page to this Agreement or to such
other office as a Lender may notify the Borrowers pursuant to SECTION 11.2.
Such Lender may in its sole and absolute discretion agree to make or not make
such Non-Rata Revolving Loan, it being understood and agreed that the Lenders'
Commitments only require the making by them of Pro-Rata Revolving Loans,
participation in or issuance of Pro-Rata Letters of Credit, and create Bankers'
Acceptance (subject to the terms and conditions contained herein). Except as
otherwise provided herein and subject in each case to the satisfaction of the
applicable conditions precedent set forth in SECTIONS 6.1 and 6.2 hereof, each
Non-Rata Revolving Loan shall be made on the terms and conditions agreed to
between the relevant Borrower and the relevant Lender; provided that the direct
and contingent Obligations of each Borrower with respect to each Pro-Rata
Credit Extension shall rank pari passu with the direct and contingent
Obligations of each Borrower with respect to each Non-Rata Revolving Loan.
SECTION 3.4.2 DOLLARS UNAVAILABLE. Notwithstanding any other
provision contained in this Agreement, if, at any time before the Commitment
Termination Date, the relevant Lender of a Non-Rata Revolving Loan denominated
in Dollars determines that Dollars are no longer freely convertible into
Canadian Dollars, then that Lender may (in its sole discretion) at any time
notify the relevant Borrower of the same. Promptly after giving that notice
that Lender shall convert that Non-Rata Revolving Loan into Canadian Dollars.
The conversion shall be effected at the relevant spot rate at which Dollars are
offered on that day for Canadian Dollars that appears on Telerate Page 261 at
approximately 11:00 a.m. Toronto time (and if the spot rate is not available on
Telerate Page 261 as of that time, the spot rate as quoted by Scotiabank in
Toronto at approximately 11:00 a.m. Toronto time) or, if that spot rate shall
not exist, such other rate of exchange as the relevant Lender shall reasonably
determine.
SECTION 3.4.3 LIMITATIONS ON MAKING NON-RATA REVOLVING LOANS.
No Lender shall be permitted to make any Non-Rata Revolving Loan if, after
giving effect thereto (with the Dollar Amounts being calculated as provided in
the last sentence of SECTION 2.1):
(a) the aggregate Outstanding Credit Extensions of
all the Lenders would exceed the then Total Credit Commitment Amount;
or
(b) the aggregate Outstanding Credit Extensions
consisting of Non-Rata Credit Extensions would exceed the Non-Rata
Limit.
SECTION 3.4.4 PROCEDURE FOR MAKING NON-RATA REVOLVING LOANS.
Subject to the terms and conditions of this Agreement, including SECTION 3.4.1,
the terms of each Non-Rata Revolving Loan shall be mutually agreed upon between
the relevant Borrower and the relevant Lender. If the relevant Borrower and
the relevant Lender agree to an interest rate for a Non-Rata Revolving Loan by
reference to a fixed rate of interest (such as, for example, the LIBO Rate) to
be subsequently determined and such Lender subsequently determines (which
determination shall be conclusive and binding on the relevant Borrower and such
Lender) on or prior to the scheduled date of making such Non-Rata Revolving
Loan and promptly notifies the relevant Borrower that such interest rate is
unascertainable or that deposits in
39 CANADIAN CREDIT AGREEMENT
46
the relevant interbank market are not available to such Lender in Canadian
Dollars, then such Lender (except to the extent otherwise agreed between such
Lender and the relevant Borrower) shall not be obligated to make such Non-Rata
Revolving Loan. In connection with each Lender agreeing to make a Non-Rata
Revolving Loan calculated based upon a fixed rate of interest, such Lender
shall, in accordance with its customary practices, attempt to determine the
relevant interest rate or obtain the relevant deposits in Canadian Dollars
necessary to make such Non-Rata Revolving Loan.
SECTION 3.4.5 MATURITY OF NON-RATA REVOLVING LOANS. Subject to
SECTION 3.4.2, each Non-Rata Revolving Loan shall be repaid in the currency in
which such Loan was made on the Maturity thereof or on any earlier date agreed
upon by the relevant Borrower and the relevant Lender or required by the other
terms and conditions of this Agreement. Each Borrower may prepay any Non-Rata
Revolving Loan on such terms and conditions as such Borrower and the relevant
Lender may agree.
SECTION 3.4.6 NON-RATA REVOLVING LOAN RECORDS. Subject to
SECTION 3.4.7, each Lender's Non-Rata Revolving Loans shall be evidenced by a
loan account maintained by such Lender. Each Borrower hereby irrevocably
authorizes the relevant Lender to make (or cause to be made) appropriate
account entries, which account entries, if made, shall evidence, inter alia,
the date of, the type of, the currency of, the advance period (if applicable)
of, the Maturity of, the outstanding principal of, interest payable on and any
repayments of Non-Rata Revolving Loans made by such Lender to such Borrower
pursuant hereto. Any such account entries indicating the outstanding principal
amount of such Lender's Non-Rata Revolving Loans and interest payable thereon
shall be prima facie evidence of the principal amount thereof owing and unpaid
and interest payable thereon, but the failure to make any such entry shall not
limit or otherwise affect the obligations of any Borrower hereunder to make
payments of principal of or interest on such Non-Rata Revolving Loans when due.
SECTION 3.4.7 QUARTERLY REPORT. During the period commencing
on the date hereof and ending on the Commitment Termination Date, Micro shall
submit (together with each set of reports and financial statements of Micro and
its Consolidated Subsidiaries delivered pursuant to SECTION 8.1.1 (A) and (B))
a Quarterly Report to the Administrative Agent in respect of the most recently
ended Fiscal Period. In addition, Micro agrees to provide to the
Administrative Agent updates with respect to the information provided in the
Quarterly Reports at such other times as the Administrative Agent may
reasonably request from time to time.
SECTION 3.5 NON-RATA LETTER OF CREDIT FACILITY.
SECTION 3.5.1 NON-RATA LETTERS OF CREDIT. Any Borrower may
from time to time, on any Business Day prior to the Commitment Termination
Date, request that any Lender issue a letter of credit (relative to such
Lender, a "NON-RATA LETTER OF CREDIT") denominated in Dollars or Canadian
Dollars. Such Lender may in its sole and absolute discretion agree to issue or
not issue such Non-Rata Letter of Credit, it being understood and agreed that
the Lenders' Commitments only require the making by them of Pro-Rata Revolving
Loans and participation in or issuance of Pro-Rata Letters of Credit (subject
to the terms and conditions contained herein). Except as, otherwise provided
herein and subject in each case to the satisfaction of the applicable
conditions precedent set forth in SECTIONS 6.1 and 6.2 hereof, each Non-Rata
Letter of Credit shall be issued on the terms and conditions agreed to between
the relevant Borrower and the relevant Lender; provided that the direct and
contingent Obligations of Borrowers with respect to each Pro-Rata Credit
Extension shall rank pari passu with the direct and contingent Obligations of
each Borrower with respect to each Non-Rata Letter of Credit.
40 CANADIAN CREDIT AGREEMENT
47
SECTION 3.5.2 DOLLARS UNAVAILABLE. Notwithstanding any other
provision contained in this Agreement, if, at any time prior to the Commitment
Termination Date, the relevant Issuer of a Non-Rata Letter of Credit
denominated in Dollars determines that Dollars have ceased to be freely
convertible into Canadian Dollars, then such Issuer may (in its sole
discretion) at any time notify the relevant Borrower of the same. Such
Borrower shall use reasonable efforts to cause the beneficiary of such Non-Rata
Letter of Credit to accept a substitution for such Non-Rata Letter of Credit
with another Non-Rata Letter of Credit denominated in Canadian Dollars.
SECTION 3.5.3 LIMITATIONS ON ISSUING NON-RATA LETTERS OF
CREDIT. Subject to the last sentence of SECTION 2.1, no Lender shall be
permitted to issue any Non-Rata Letters of Credit if, after giving effect
thereto:
(a) the aggregate Outstanding Credit Extensions of
all the Lenders would exceed the then Total Credit Commitment Amount;
or
(b) the aggregate Outstanding Credit Extensions
consisting of Non-Rata Credit Extensions would exceed the Non-Rata
Limit.
SECTION 3.5.4 PROCEDURES FOR ISSUING NON-RATA LETTERS OF
CREDIT. Subject to the terms and conditions of this Agreement, including
SECTION 3.5.1, the terms of each Non-Rata Letter of Credit shall be mutually
agreed upon between the relevant Borrower and the relevant Issuer.
SECTION 3.5.5 DISBURSEMENTS. Subject to the terms and
provisions of each Non-Rata Letter of Credit and this Agreement, upon
presentment of any Non-Rata Letter of Credit to the relevant Issuer thereof for
payment, such Issuer shall make such payment to the beneficiary (or its
designee) of such Non-Rata Letter of Credit on the date designated for such
payment (the "NON-RATA DISBURSEMENT DATE"). Such Issuer will promptly notify
the relevant Borrower of the presentment for payment of any such Non-Rata
Letter of Credit, together with notice of the Non-Rata Disbursement Date
thereof. Prior to 12:00 noon, Toronto time, on the next Business Day following
the Non-Rata Disbursement Date, the relevant Borrower will reimburse such
Issuer for all amounts disbursed under such Non-Rata Letter of Credit, together
with all interest, if any, that such Borrower shall have agreed to pay that
shall have accrued thereon since the Non-Rata Disbursement Date.
SECTION 3.5.6 REIMBURSEMENT. The obligation (the "NON-RATA
REIMBURSEMENT OBLIGATION") of the relevant Borrower under SECTION 3.5.5 to
reimburse an Issuer with respect to each disbursement under a Non-Rata Letter
of Credit (including interest thereon) issued by such Issuer, shall be absolute
and unconditional under any and all circumstances and irrespective of any
set-off, counterclaim or defense to payment which such Borrower or any other
Borrower may have or have had against such Issuer, including any defense based
upon the failure of any disbursement under a Non-Rata Letter of Credit to
conform to the terms of the applicable Non-Rata Letter of Credit (if, in the
applicable Issuer's good faith opinion, such disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of the
proceeds of such Non-Rata Letter of Credit; provided that nothing herein shall
require such Borrower to reimburse the applicable Issuer for any wrongful
disbursement made by such Issuer under a Non-Rata Letter of Credit as a result
of acts or omissions finally determined by a court of competent jurisdiction to
constitute gross negligence or willful misconduct on the part of such Issuer.
Subject to SECTION 3.5.2, each Non-Rata Letter of Credit shall be
41 CANADIAN CREDIT AGREEMENT
48
reimbursed in the currency in which such Non-Rata Letter of Credit was issued.
SECTION 3.6 REPORTING OF NON-RATA CREDIT EXTENSIONS.
(a) Each Borrower agrees to provide to (or cause to
be provided to) the Administrative Agent notice of each Non-Rata
Credit Extension made to or for it concurrently with or promptly after
the making of such Non-Rata Credit Extension, which notice shall set
forth (i) the date thereof, (ii) the principal amount thereof stated
in the relevant currency (and, if denominated in Canadian Dollars, the
corresponding Dollar Amount thereof as of such date), (iii) the
Interest Period, if any, applicable thereto, (iv) the aggregate Dollar
Amount of the relevant Lender's outstanding or undrawn Non-Rata Credit
Extensions as of such date, and (v) the identity of the relevant
Lender.
(b) Each Lender agrees to provide to the
Administrative Agent notice, by 12:00 p.m. Toronto time on the
Business Day immediately after the date of any Non-Rata Credit
Extension made by it, of the Outstanding Credit Extensions comprised
of Non-Rata Credit Extensions made by such Lender, which notice shall
set forth (i) the date of each such Non-Rata Credit Extension, (ii)
the principal amount or Stated Amount, as the case may be, of each
such Non-Rata Credit Extension stated in the relevant currency (and
the corresponding Dollar Amount thereof as of such date), and the
aggregate Dollar Amount of all such Non-Rata Credit Extensions as of
such date, (iii) the respective Interest Periods applicable thereto,
and (iv) the identity of such Lender.
ARTICLE IV
PRINCIPAL, INTEREST, AND FEE PAYMENTS
SECTION 4.1 LOAN ACCOUNTS, NOTES, PAYMENTS, AND PREPAYMENTS.
The Outstanding Credit Extensions shall be evidenced by one or more loan
accounts or records maintained by (a) the Administrative Agent in respect of
Pro-Rata Credit Extensions and (b) each Lender in respect of its Non-Rata
Credit Extensions, which loan accounts or records, in each case, shall be
conclusive evidence, absent manifest error, of the amount of those Outstanding
Credit Extensions and the interest and principal payments thereon. Any failure
to so record or any error in doing so shall not, however, limit or otherwise
affect the Obligations of the relevant Borrower under the Loan Documents to pay
any amount owing with respect to the Obligations. Upon the request of any
Lender made at any time through the Administrative Agent, the relevant
Borrowers shall promptly execute and deliver to that Lender the relevant one or
more Notes.
SECTION 4.1.1 REPAYMENTS AND PREPAYMENTS OF PRO-RATA REVOLVING
LOANS. The relevant Borrower shall make all payments and prepayments of each
Pro-Rata Revolving Loan made to it in currency in which it was originally
denominated and shall repay in full the unpaid principal amount of each
Pro-Rata Revolving Loan outstanding to it at the Maturity thereof. Before that
Maturity:
(a) the relevant Borrower may, from time to time on
any Business Day, make a voluntary prepayment, in whole or in part, of
the outstanding principal amount of any Pro-Rata Revolving Loan;
provided that:
42 CANADIAN CREDIT AGREEMENT
49
(i) any such prepayment of any Pro-Rata
Revolving Loan shall be allocated to each Lender pro rata
according to such Lender's Adjusted Percentage (calculated on
the date such Pro-Rata Revolving Loans were made) of the
Pro-Rata Revolving Loans so prepaid (and, for the avoidance of
doubt, no such prepayment shall be allocated to any Lender
which did not participate in the making of the Pro-Rata
Revolving Loans to be prepaid);
(ii) no such prepayment of any Pro-Rata
Revolving Loan that is a LIBO Rate Loan may be made on any day
other than the last day of the Interest Period then applicable
to such LIBO Rate Loan unless all the losses or expenses
incurred by the Lenders in connection therewith pursuant to
SECTION 5.4 are paid in full contemporaneously with such
prepayments;
(iii) no such prepayment of any Pro-Rata
Revolving Loan that is by way of Bankers' Acceptance may be
made on any day other than the day of its maturity unless all
the losses or expenses incurred by the Lenders in connection
therewith pursuant to SECTION 5.4 are paid in full
contemporaneously, with such prepayment;
(iv) all such voluntary prepayments shall
require prior notice to the Administrative Agent of (i) at
least three but no more than five Business Days in the case of
LIBO Rate Loans and Bankers' Acceptances and (ii) not more
than three Business Days but no later than the date of such
voluntary prepayment in the case of U.S. Base Rate Loans and
Canadian Prime Rate Loans; and
(v) all such voluntary prepayments shall, if
other than a prepayment in whole, be in an aggregate minimum
amount of $10,000,000 and an integral multiple of $1,000,000;
(b) Micro shall determine if the aggregate
Outstanding Credit Extensions of all the Lenders exceed the Total
Credit Commitment Amount (i) at the end of each Fiscal Period and (ii)
on the date of each request for a Credit Extension (excluding any
request submitted in respect of any continuation or conversion of any
Borrowing previously made hereunder), and promptly thereafter -- and
in any event (A) in respect of any determination made pursuant to
CLAUSE (i) above, no later than the next date on which Micro shall be
required to submit a Quarterly Report in accordance with SECTION 3.4.7
or (B) in respect of any determination made pursuant to CLAUSE (ii)
above, prior to the proposed date of such requested Credit Extension
-- Micro shall (or shall cause Micro Canada to) make a mandatory
prepayment of the outstanding principal amount of such Loans as Micro
may select in an amount equal to such excess, such prepayment to be
allocated to the Lenders in such manner as Micro may elect (provided
that a prepayment of a Pro-Rata Revolving Loan shall be allocated to
the Lenders in the manner set forth in CLAUSE (a)(i) above); and
(c) Micro shall (and shall cause Micro Canada to), on
each date when any reduction or termination in the Total Credit
Commitment Amount shall become effective, including pursuant to
SECTION 2.3, make a mandatory prepayment of all Pro-Rata Revolving
Loans equal to the excess, if any, of the then aggregate Outstanding
Credit Extensions of all the
43 CANADIAN CREDIT AGREEMENT
50
Lenders over the Total Credit Commitment Amount as so reduced, such
prepayment to be allocated to the Lenders in the manner set forth in
CLAUSE (a)(i) above.
SECTION 4.2 INTEREST PROVISIONS. Each Pro-Rata Revolving
Loan shall bear interest from and including the day when made until (but not
including) the day such Pro-Rata Revolving Loan shall be paid in full, and such
interest shall accrue and be payable in accordance with this SECTION 4.2.
SECTION 4.2.1 RATES.
(a) PRO-RATA REVOLVING LOANS. Subject to SECTION
4.2.2, and pursuant to an appropriately completed and delivered
Borrowing Request or Continuation Notice, the relevant Borrower may
elect that Pro-Rata Revolving Loans comprising a Borrowing accrue
interest at the following rates per annum:
(i) U.S. BASE RATE LOANS. On that portion of
such Borrowing maintained from time to time as a U.S. Base
Rate Loan, equal to the U.S. Base Rate from time to time in
effect.
(ii) LIBO RATE LOANS. On that portion of such
Borrowing maintained from time to time as a LIBO Rate Loan,
during each Interest Period applicable thereto, the sum of the
LIBO Rate for such Interest Period plus the Applicable Margin.
(iii) CANADIAN PRIME RATE LOANS. On that portion
of such Borrowing maintained from time to time as a Canadian
Prime Rate Loan, equal to the Canadian Prime Rate from time to
time in effect.
(b) NON-RATA REVOLVING LOANS. Pursuant to the terms
agreed to between the relevant Borrower and the relevant Lender, each
Borrower shall pay interest on the aggregate principal amount of any
Non-Rata Revolving Loan outstanding to any Lender from time to time
prior to and at Maturity at a rate agreed between each such Borrower
and such Lender pursuant to SECTION 3.4 in connection with the making
of such Non-Rata Revolving Loan. Such interest rate shall include any
compensation for reserves or similar costs incurred in connection with
such Non-Rata Revolving Loan.
SECTION 4.2.2 POST-MATURITY RATES. After the date any
principal amount of any Loan is due and payable (whether at Maturity, upon
acceleration or otherwise), or after any other monetary Obligation of Micro or
any other Borrower shall have become due and payable, Micro or each such other
Borrower shall pay, but only to the extent permitted by law, interest (after as
well as before judgment) on such amounts at an annual rate equal to the U.S.
Base Rate (for Obligations denominated in Dollars) or the Canadian Prime Rate
(for Obligations denominated in Canadian Dollars) plus 2%.
SECTION 4.2.3 CONTINUATION ELECTIONS. The relevant Borrower
may from time to time by delivering a Continuation Notice to the Administrative
Agent on or before 1:00 p.m., Toronto time, on a Business Day, irrevocably
elect
(a) in the case of LIBO Rate Loans or Bankers'
Acceptances, on not less than three nor more than five Business Days'
notice, and
44 CANADIAN CREDIT AGREEMENT
51
(b) in the case of U.S. Base Rate Loans and Canadian
Prime Rate Loans, on such Business Day,
that all, or any portion in an aggregate minimum amount of $10,000,000 and an
integral multiple of $1,000,000 of the Loans, be
(i) in the case of U.S. Base Rate Loans, converted
into Canadian Prime Rate Loans, LIBO Rate Loans, or Bankers'
Acceptances,
(ii) in the case of Canadian Prime Rate Loans,
converted into U.S. Base Rate Loans, or LIBO Rate Loans, or Bankers'
Acceptances,
(iii) in the case of LIBO Rate Loans, converted into
U.S. Base Rate Loans, Canadian Prime Rate Loans, or Bankers'
Acceptances or continued as LIBO Rate Loans (in the absence of
delivery of a Continuation Notice with respect to any LIBO Rate Loan,
at least three Business Days (but not more than five Business Days)
before the last day of the then current Interest Period with respect
thereto, each such LIBO Rate Loan shall, on such last day,
automatically convert to a U.S. Base Rate Loan),
(iv) in the case of Bankers' Acceptances, converted
into U.S. Base Rate Loans, Canadian Base Rate Loans, or LIBO Rate
Loans or continued as Bankers' Acceptance (in the absence of delivery
of a Continuation Notice with respect to any Bankers' Acceptance, at
least three Business Days (but not more than five Business Days)
before the maturity of such Bankers' Acceptances, each such Bankers'
Acceptance shall on such maturity, automatically convert to a Canadian
Prime Rate Loan;
provided that (1) each such conversion or continuation shall be pro rated among
the applicable outstanding Pro-Rata Revolving Loans of all Lenders, and (2) no
portion of the outstanding principal amount of any Pro-Rata Revolving Loans may
be continued as or be converted into, a LIBO Rate Loan with an Interest Period
longer than one month or a Bankers' Acceptance with a term of more than 30 days
while any Default has occurred and is continuing.
SECTION 4.2.4 PAYMENT DATES.
(a) PRO-RATA REVOLVING LOANS. Interest accrued on
each Pro-Rata Revolving Loan shall be payable, without duplication, in
the currency in which it is respectively denominated:
(i) on the Stated Maturity Date therefor;
(ii) on the date of any payment or prepayment,
in whole or in part, of principal outstanding on such Pro-Rata
Revolving Loan (but only on the principal amount so paid or
prepaid);
(iii) with respect to each U.S. Base Rate Loan
and Canadian Prime Rate Loan, on each Quarterly Payment Date;
45 CANADIAN CREDIT AGREEMENT
52
(iv) with respect to each U.S. Base Rate Loan
and Canadian Prime Rate Loan that is converted into a LIBO
Rate Loan on a day when interest would not otherwise have been
payable pursuant to CLAUSE (iii), on the date of such
conversion;
(v) with respect to each LIBO Rate Loan, on the
last day of each applicable Interest Period (and, if such
Interest Period shall exceed three months, on each three month
anniversary of the date of the commencement of such Interest
Period); and
(vi) on that portion of any Loans the Stated
Maturity Date of which is accelerated pursuant to SECTION 9.2
or 9.3, immediately upon such acceleration.
Interest accrued on Pro-Rata Revolving Loans or other monetary
Obligations arising under this Agreement or any other Loan Document
after the date such Pro-Rata Revolving Loans or other Obligations are
due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
(b) NON-RATA REVOLVING LOANS. Subject to SECTION
3.4.2, each Borrower shall pay interest on the aggregate principal
amount of any Non-Rata Revolving Loan outstanding in the currency in
which such Loan was made to the relevant Lender from time to time
prior to and at Maturity on such dates agreed between such Borrower
and such Lender pursuant to SECTION 3.4 in connection with the making
of such Non-Rata Revolving Loan.
SECTION 4.2.5 INTEREST RATE DETERMINATION. The Administrative
Agent and, if and when applicable, the Reference Lenders shall, in accordance
with each of their customary practices, attempt to determine the relevant
interest rates applicable to each Pro-Rata Revolving Loan requested to be made
pursuant to each Borrowing Request duly completed and delivered by a Borrower,
and, if and when applicable, each Reference Lender agrees to furnish the
Administrative Agent timely information for the purpose of determining the LIBO
Rate. If any Reference Lender fails, if and when applicable, to timely furnish
such information to the Administrative Agent for any such interest rate, the
Administrative Agent shall determine such interest rate on the basis of the
information shared by the other Reference Lenders.
SECTION 4.2.6 ADDITIONAL INTEREST ON LIBO RATE LOANS. For so
long as the cost to a Lender of making or maintaining its LIBO Rate Loans is
increased as a result of any imposition or modification after the date of this
Agreement of any reserve required to be maintained by such Lender against
Eurocurrency Liabilities (or any other category of liabilities which includes
deposits by reference to which the interest rate on LIBO Rate Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of such Lender to United States
residents), then such Lender may require the Borrowers to pay,
contemporaneously with each payment of interest on the LIBO Rate Loans,
additional interest on the related LIBO Rate Loan of such Lender at a rate per
annum up to but not exceeding the excess of (i) (A) the applicable LIBO Rate
divided by (B) one minus the LIBOR Reserve Percentage over (ii) the applicable
LIBO Rate. Any Lender wishing to require payment of such additional interest
shall so notify the Borrowers and the Administrative Agent (which notice shall
set forth the amount (as determined by such Lender) to which such Lender is
then entitled under this SECTION 4.2.6 (which amount shall be consistent with
such Lender's good faith estimate of the level at which the related reserves
are maintained by it and which determination shall be conclusive and binding
for all purposes, absent demonstrable error) and shall be accompanied by such
information as to
46 CANADIAN CREDIT AGREEMENT
53
the computation set forth therein as either Borrower may reasonably request),
in which case such additional interest on the LIBO Rate Loans of such Lender
shall be payable on the last day of each Interest Period thereafter (commencing
with the Interest Period beginning at least three Business Days after the
giving of such notice) to such Lender at the place indicated in such notice.
Each Lender that receives any payment in respect of increased costs pursuant to
this section shall promptly notify the Borrowers of any change with respect to
such costs which affects the amount of additional interest payable pursuant to
this section in respect thereof.
SECTION 4.3 FEES. Micro (and, in the case of SECTION
4.3.3(D), each relevant Borrower) agrees to pay the fees set forth in this
SECTION 4.3. All such fees shall be nonrefundable and shall be paid in Dollars
to each such Lender or the relevant Issuer at its office specified for such
purpose on the signature pages hereof.
SECTION 4.3.1 ADMINISTRATION AND SYNDICATION FEES. Micro
agrees to pay directly to the Administrative Agent and the Syndication Agent,
for their own accounts, the administration and syndication fees, respectively,
in the amounts and on the dates set forth in the Fee Letter.
SECTION 4.3.2 FACILITY FEES. As provided below, the Borrowers
agree to pay to the Administrative Agent for the account of each Lender
(including, any portion thereof when the Lenders may not extend any Credit
Extensions by reason of the inability of the Borrowers to satisfy any condition
of SECTION 6.1 or 6.2 (a) for each day during the period commencing on the date
hereof and continuing through and including the date the Administrative Agent
shall receive the reports and financial statements of Micro and its
Consolidated Subsidiaries required to be delivered pursuant to SECTION 8.1.1(B)
hereof -- together with the Compliance Certificate required to be delivered
contemporaneously therewith pursuant to SECTION 8.1.1(D) hereof -- for the
Fiscal Period ending on the Saturday nearest September 30, 1997, a fee to each
Lender on its Credit Commitment Amount on such day (without taking into account
usage) at a rate of 0.125% per annum, and (b) for each day during the period
commencing on the date immediately following the date the Administrative Agent
shall receive the reports, financial statements and Compliance Certificate
referred to in CLAUSE (a) above, until but excluding the Commitment Termination
Date, a fee to each Lender on its Credit Commitment Amount on such day (without
taking into account usage) at the corresponding rate per annum set forth below,
determined by reference to: (i) the lower of the two highest ratings from time
to time assigned to Micro's long-term senior unsecured debt by S&P, Xxxxx'x and
Fitch and either published or otherwise evidenced in writing by the applicable
rating agency and made available to the Administrative Agent (including both
"express" and "indicative" or "implied" (or equivalent) ratings) or (ii) the
ratio (calculated pursuant to CLAUSE (c) of SECTION 8.2.3) of Consolidated
Funded Debt to Consolidated EBITDA for the Fiscal Period most recently ended
prior to such day for which financial statements and reports have been received
by the Administrative Agent pursuant to SECTION 8.1(a) or (b), whichever
results in the lower rate:
============================================================================================================
MICRO'S LONG-TERM UNSECURED DEBT RATIO OF CONSOLIDATED FUNDED FACILITY FEE
RATINGS BY S&P, XXXXX'X DEBT TO CONSOLIDATED EBITDA
OR FITCH, RESPECTIVELY
------------------------------------------------------------------------------------------------------------
A-, A3 or A- (or higher) Less than 1.50 0.090%
------------------------------------------------------------------------------------------------------------
BBB+, Baal or BBB+ Greater than or equal to 1.50, but less than 0.110%
2.00.
------------------------------------------------------------------------------------------------------------
BBB, Baa2 or BBB Greater than or equal to 2.00, but less than 0.125%
2.50.
============================================================================================================
47 CANADIAN CREDIT AGREEMENT
54
============================================================================================================
BBB-, Baa3 or BBB- Greater than or equal to 2.50, but less than 0.150%
3.00
------------------------------------------------------------------------------------------------------------
XXx, Xx0 or BB+ Greater than or equal to 3.00, but less than 0.200%
3.25.
------------------------------------------------------------------------------------------------------------
Lower than XXx, Xx0 or BB+ Greater than or equal to 3.25. 0.250%
============================================================================================================
Such fee shall be calculated by the Borrowers as at each Quarterly Payment
Date, commencing on the first Quarterly Payment Date to occur after the date
hereof, and on the Commitment Termination Date and shall be payable by the
Borrowers in arrears on each Quarterly Payment Date and on the Commitment
Termination Date. Upon the advice of the Administrative Agent (a) Micro Canada
shall pay the portion of the fee under this section allocated by the
Administrative Agent to the Lending Offices for Micro Canada and (b) Micro
shall pay the portion of the fee under this section allocated by the
Administrative Agent to the Lending Offices for Micro. The Administrative
Agent shall allocate that fee between those Lending Offices as follows: (a) the
Lending Offices for Micro shall be entitled to receive a portion of that fee
allocated by the Administrative Agent based upon the ratio that the weighted
daily average Outstanding Credit Extensions owed by Micro during the previous
quarterly period that consisted of Pro-Rata Credit Extensions (based upon
amount and number of days outstanding) bears to the Total Credit Commitment
Amount; and (b) the Lending Offices for Micro Canada shall be entitled to
receive the balance of that fee.
SECTION 4.3.3 LETTER OF CREDIT FEES.
(a) Micro agrees to pay to the Administrative Agent
for the account of each Lender (including the relevant Issuer) a
Pro-Rata Letter of Credit participation fee equal to each Lender's
Adjusted Percentage of the average daily Stated Amount of each Pro-
Rata Letter of Credit during the applicable period multiplied by the
Applicable Margin then in effect for any Pro-Rata Revolving Loan.
Such participation fee shall accrue from the date of issuance of any
Pro-Rata Letter of Credit until the date such Pro-Rata Letter of
Credit is drawn in full or terminated, and shall be payable in arrears
on each Quarterly Payment Date and on the date that the Commitments
terminate in their entirety.
(b) Micro agrees to pay to the Administrative Agent
for the account of the Issuer of each Pro-Rata Letter of Credit a
Pro-Rata Letter of Credit issuance fee of 0.125 of 1% per annum of the
average daily Stated Amount of such Pro-Rata Letter of Credit during
the applicable period, such fee to be payable for the account of the
relevant Issuer in quarterly installments in arrears on each Quarterly
Payment Date and on the date that the Commitments terminate in their
entirety, Micro agrees to reimburse each Issuer, on demand, for all
usual out-of-pocket costs and expenses incurred in connection with the
issuance or maintenance of any Pro-Rata Letter of Credit issued by
such Issuer.
(c) The Administrative Agent shall pay to each Lender
and each Issuer fees paid for its account under CLAUSE (a) or (b)
above promptly after receipt by the Administrative Agent.
(d) Each Borrower agrees to pay directly to the
relevant Issuer of each Non-Rata Letter of Credit requested by such
Borrower a letter of credit fee equal to such amount and at such times
as such Borrower and the applicable Issuer shall agree in connection
with the issuance of such Non-Rata Letter of Credit.
48 CANADIAN CREDIT AGREEMENT
55
SECTION 4.4 RATE AND FEE DETERMINATIONS.
(a) Interest on each LIBO Rate Loan shall be computed
on the basis of a year consisting of 360 days, and interest on each
U.S. Base Rate Loan and each Canadian Prime Rate Loan and fees shall
be computed on the basis of a year consisting of 365 or 366 days, as
the case may be, in each case paid for the actual number of days
elapsed, calculated as to each period from and including the first day
thereof to but excluding the last day thereof. All determinations by
the Administrative Agent of the rate of interest payable with respect
to any Pro-Rata Revolving Loan shall be conclusive and binding in the
absence of demonstrable error.
(b) For purposes of the Interest Act (Canada),
whenever interest payable pursuant to this Agreement is calculated on
the basis of a period other than a calendar year (the "RELEVANT
PERIOD"), the rate of interest expressed as an annual rate is the rate
so determined multiplied by the actual number of days in the calendar
year in which the same is to be ascertained and divided by the number
of days in relevant period.
SECTION 4.5 OBLIGATIONS IN RESPECT OF NON-RATA CREDIT
EXTENSIONS. Each Borrower hereby acknowledges and agrees that notwithstanding
any provision hereof or of any other Loan Document to the contrary, all
Obligations of the Obligors in respect of any Non-Rata Credit Extensions shall
be the joint and several liabilities of each Borrower.
ARTICLE V
CERTAIN PAYMENT PROVISIONS
SECTION 5.1 ILLEGALITY; CURRENCY RESTRICTIONS.
(a) If, as the result of any Regulatory Change, any
Lender shall determine (which determination shall, in the absence of
demonstrable error, be conclusive and binding on each Borrower), that
it is unlawful for such Lender to make any LIBO Rate Loan, issue any
Letter of Credit or continue any LIBO Rate Loan previously made by it
hereunder, as the case may be, the obligations of such Lender to make
any such LIBO Rate Loan, issue any such Letter of Credit or continue
any such LIBO Rate Loan, as the case may be, shall, upon the giving of
notice thereof to the Administrative Agent, Micro and any other
applicable Borrower, forthwith be suspended, and each applicable
Borrower shall, if requested by such Lender and if required by such
Regulatory Change, on such date as shall be specified in such notice,
prepay to such Lender in full all of such LIBO Rate Loans or convert
all of such LIBO Rate Loans into a Loan of another Type that is not
unlawful, in each case on the last day of the Interest Period
applicable thereto (unless otherwise required by applicable law) and
without any penalty whatsoever (but subject to SECTION 5.4); provided
that such Lender shall make as U.S. Base Rate Loans all Loans that
such Lender would otherwise be obligated to make as LIBO Rate Loans
and convert into or continue as U.S. Base Rate Loans all Loans that
such Lender would otherwise be required to convert into or continue as
LIBO Rate Loans, in each case during the period any such suspension is
effective. Such suspension shall continue to be effective until such
Lender shall notify the Administrative Agent and Micro that the
circumstances causing such suspension no longer exist, at which time
the obligations of such Lender to make any such LIBO Rate Loan, issue
any Non-
49 CANADIAN CREDIT AGREEMENT
56
Rata Letter of Credit, or continue any LIBO Rate Loan, as the case may
be, shall be reinstated.
(b) If any central bank or other governmental
authorization in the country of the proposed currency of any proposed
Loan is required to permit the use of such currency by a Lender
(through its Lending Office) for such Loan and such authorization has
not been obtained (provided that such Lender has used reasonable
endeavors to obtain such authorization) or is not in full force and
effect, the obligation of such Lender to provide such Loans shall be
suspended so long as such authorization is required and has not been
obtained by such Lender.
SECTION 5.2 DEPOSITS UNAVAILABLE. If, before the date on
which all or any portion of any LIBO Rate Loan is to be made, maintained, or
continued the Administrative Agent shall have determined (which determination
shall be conclusive and binding), with respect to that LIBO Rate Loan that:
(a) Dollar deposits in the relevant amount and for
the relevant Interest Period are available, if and when applicable, to
none of the Reference Lenders in the relevant market, or
(b) by reason of circumstances affecting the London
interbank market adequate means do not exist for ascertaining the
interest rate applicable hereunder to such LIBO Rate Loan,
then, upon notice from the Administrative Agent to Micro and the Lenders, the
obligations of the Lenders to make or continue any LIBO Rate Loan under
SECTIONS 3.1 and 4.2.3 shall forthwith be suspended until the Administrative
Agent shall notify Micro and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 5.3 INCREASED CREDIT EXTENSION COSTS, ETC. Each
Borrower agrees to reimburse each Lender within 30 days after any demand for
any increase in the cost to such Lender of, or any reduction in the amount of
any sum receivable by such Lender in respect of, making, maintaining,
participating, issuing or extending (or of its obligation to make, maintain,
participate, issue or extend) any Credit Extension to the extent such increased
cost or reduced amount is due to a Regulatory Change. Such Lender shall
provide to the Administrative Agent and the relevant Borrower a certificate
stating, in reasonable detail, the reasons for such increased cost or reduced
amount and the additional amount required fully to compensate such Lender for
such increased cost or reduced amount. Such additional amounts shall be
payable by the relevant Borrower directly to such Lender upon its receipt of
such notice, and such notice shall be rebuttable, presumptive evidence of the
additional amounts so owing. In determining such amount, such Lender shall act
reasonably and in good faith and may use any method of averaging and
attribution that it customarily uses for its other borrowers with a similar
credit rating as Micro. Such Lender may demand reimbursement for such
increased cost or reduced amount only for the 360-day period immediately
preceding the date of such written notice, and Borrowers shall have liability
only for such period.
SECTION 5.4 FUNDING LOSSES. If any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue, or extend any portion of the principal amount of any Loan)
as a result of:
(a) any repayment or prepayment of the principal
amount of any Loan on a date
50 CANADIAN CREDIT AGREEMENT
57
other than the scheduled last day of the Interest Period or the
scheduled maturity of a Bankers' Acceptance or, in the case of any
Non- Rata Revolving Loan, other relevant funding period applicable
thereto, whether pursuant to SECTION 4.1 or otherwise;
(b) any conversion of a LIBO Rate Loan or a Bankers'
Acceptance into a U.S. Base Rate Loan or a Canadian Prime Rate Loan on
a date other than the scheduled last day of the Interest Period
applicable thereto or the scheduled maturity thereof, as the case may
be;
(c) any conversion of the currency of any Pro-Rata
Revolving Loan on a date other than the scheduled last day of the
Interest Period; or
(d) any Loan not being made, continued, or converted
or Bankers' Acceptance not being issued in accordance with the Credit
Extension Request therefor in the case of any Pro-Rata Credit
Extension Request, the instructions of the relevant Borrower to the
relevant Lender in the case of any Non-Rata Credit Extension, or the
Drawing Notice in the case of any Bankers' Acceptance as a consequence
of any action taken, or failed to be taken, by any Obligor,
then, upon the written notice of such Lender to the relevant Borrower (with a
copy to the Administrative Agent), such Borrower shall, within five days of its
receipt thereof, pay directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss or
expense. Such written notice (which shall include calculations in reasonable
detail) shall be rebuttable presumptive evidence of the amount of any such loss
or expense that has been so incurred.
SECTION 5.5 INCREASED CAPITAL COSTS. If any Regulatory
Change affects or would affect the amount of capital required or expected to be
maintained by any Lender or any Person controlling such Lender, and such Lender
determines (in its sole and absolute discretion) that the rate of return on its
or such controlling Person's capital as a consequence of its participation in
this Agreement or the making, continuing, participating in or extending of any
Credit Extension is reduced to a level below that which such Lender or such
controlling Person could have achieved but for the occurrence of any such
circumstance, then, in any such case, upon the relevant Borrower's receipt of
written notice thereof from such Lender (with a copy to the Administrative
Agent), such Borrower shall pay directly to such Lender additional amounts
sufficient to compensate such Lender or such controlling Person for such
reduction in rate of return. A statement of such Lender as to any such
additional amounts (including calculations thereof in reasonable detail) shall
be rebuttable, presumptive evidence of the additional amounts so owing. In
determining such amount, such Lender may use any method of averaging and
attribution that it shall deem applicable. Such Lender may demand payment for
such additional amounts that have accrued only during the 360-day period
immediately preceding the date of such written notice, and Borrowers shall have
liability only for such period.
SECTION 5.6 DISCRETION OF LENDERS AS TO MANNER OF FUNDING.
Notwithstanding any provision of this Agreement to the contrary, the Lenders
shall be entitled to fund and maintain their funding of all or any part of
their Loans and other Credit Extensions in any manner they elect, it being
understood, however, that for the purposes of this Agreement all determinations
hereunder with respect to a Pro-Rata Revolving Loan shall be made as if each
Lender had actually funded and maintained each Loan through its applicable
Lending Office and through the purchase of deposits having a maturity
corresponding to the maturity of such Pro-Rata Revolving Loan. Any Lender may,
if it so elects, fulfill any commitment or obligation to make or maintain Loans
or other Credit Extensions by causing a branch
51 CANADIAN CREDIT AGREEMENT
58
or affiliate to make or maintain such Loans or other Credit Extensions;
provided that, in such event, such Loans or other Credit Extensions shall be
deemed for the purposes of this Agreement to have been made by such Lender
through its applicable Lending Office, and the obligation of Micro to repay
such Loans shall nevertheless be to such Lender at its Lending Office and shall
be deemed held by such Lender through its applicable Lending Office, to the
extent of such Loan, for the account of such branch or affiliate.
Notwithstanding the foregoing or the fact that different Affiliates for a
Lender under this Agreement may have executed this Agreement or the Lender
Assignment Agreement by which it has become a Lender under this Agreement, all
of those Lending Offices and signatories shall be treated under the Loan
Documents as but one Lender for purposes of calculations of Adjusted
Percentage, Percentage, Commitment, Required Lenders, and modifications,
amendments, waivers, consents, and approvals under SECTION 11.1 and other
provisions of the Loan Documents.
SECTION 5.7 TAXES.
(a) All payments by any Obligor of principal of, and
interest and fees on, any Credit Extension and all other amounts
payable hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes, and other taxes, fees, duties,
withholdings, or other charges of any nature whatsoever imposed by any
taxing authority with respect to such payments, but excluding first,
franchise taxes and taxes imposed on or measured by any Lender Party's
net income, profits, or receipts, or capital taxes or large
corporation taxes, and, second, taxes, or other charges of any nature
imposed by any taxing authority on any Lender Party that do not result
from any Regulatory Change and that are not imposed on any class of
bank having the same general characteristics as such Lender Party
(such non-excluded items being called "TAXES"). In the event that any
withholding or deduction from any payment to be made by any Obligor
hereunder is required in respect of any Taxes pursuant to any
applicable law, rule, or regulation, then such Obligor will:
(i) pay directly to the relevant authority the
full amount required to be so withheld or deducted;
(ii) promptly forward to the relevant Lender
Party an official receipt or other documentation satisfactory
to such Lender Party evidencing such payment to such
authority; and
(iii) pay directly to the relevant Lender Party
for its own account such additional amount or amounts as is or
are necessary to ensure that the net amount actually received
by such Lender Party will equal the full amount such Lender
Party would have received had no such withholding or deduction
been required.
(b) Moreover, if any Taxes are directly asserted
against any Lender Party with respect to any payment received by such
Lender Party hereunder, such Lender Party may pay such Taxes and the
relevant Obligor will promptly pay such additional amounts (including
any penalties, interest or expenses) as is necessary in order that the
net amount received by such Lender Party after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the
amount such Lender Party would have received had not such Taxes been
asserted.
52 CANADIAN CREDIT AGREEMENT
59
(c) If the relevant Obligor fails to pay any Taxes
when due to the appropriate taxing authority or fails to remit to the
relevant Lender Parties entitled thereto the required receipt or other
required documentary evidence, such Obligor shall indemnify such
Lender Parties for any incremental Taxes, interest or penalties that
may become payable by any Lender Party as a result of any such
failure.
(d) The following provisions govern exceptions to the
tax indemnification provisions of this SECTION 5.7 and related
matters.
(i) In respect of its Credit Extensions to
Micro, each Lender Party organized under the laws of a
jurisdiction outside the United States -- on or before the
date of its execution and delivery of this Agreement (if an
original signatory to this Agreement) or the date on which it
otherwise becomes a Lender Party, on or before the date of any
change in any its Lending Office, and from time to time
thereafter if requested in writing by Micro (but only so long
as that Lender Party remains lawfully liable to do so) --
shall provide Micro and the Administrative Agent with a
properly completed and duly executed U.S. Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor
form prescribed by the U.S. Internal Revenue Service.
(ii) In respect of its other Credit Extensions
and by its execution and delivery of this Agreement or of a
Lender Assignment Agreement, as the case may be, each Lender
Party (A) represents and warrants to the Borrowers and the
Administrative Agent that, in respect of payments under the
Loan Documents by Micro Canada, such Lender Party is entitled
to receive those payments free and clear without any
obligation on the part of Micro Canada or the Administrative
Agent to make deduction for or on account of any income taxes
imposed by Canada, and (B) covenants and agrees with the
Borrowers and the Administrative Agent that it shall promptly
notify Micro and the Administrative Agent if it becomes aware
that the foregoing representation and warranty is incorrect.
(iii) A Lender Party is not entitled to
indemnification under this SECTION 5.7 with respect to the
applicable Taxes for any period during which either (i) the
Lender Party has failed to provide Micro and the
Administrative Agent with the applicable U.S. Internal Revenue
Service form if required under CLAUSE (i) above (unless that
failure is due to a change in treaty, law, or regulation
occurring after the date on which the applicable form
originally was required to be provided) in respect of U.S.
withholding taxes, or (ii) the representation and warranty by
it in CLAUSE (ii)(A) above is incorrect in respect of Canadian
withholding taxes.
(iv) Notwithstanding CLAUSE (iii) above to the
contrary, if a Lender Party that is otherwise exempt from or
subject to a reduced rate of withholding tax becomes subject
to United States withholding tax because of its failure to
deliver an Internal Revenue Service form required hereunder,
then Micro shall take such steps as that Lender Party shall
reasonably request to assist that Lender Party to recover the
applicable withholding tax.
(e) If any Obligor pays any additional
amount under this SECTION 5.7 (a "TAX
53 CANADIAN CREDIT AGREEMENT
60
PAYMENT") and any Lender Party or Affiliate thereof effectively
obtains a refund of tax or credit against tax by reason of the Tax
Payment (a "TAX CREDIT") and such Tax Credit is, in the reasonable
judgment of such Lender Party or Affiliate, attributable to the Tax
Payment, then such Lender Party, after actual receipt of such Tax
Credit or actual receipt of the benefits thereof, shall promptly
reimburse such Obligor for such amount as such Lender Party shall
reasonably determine to be the proportion of the Tax Credit as will
leave such Lender Party (after that reimbursement) in no better or
worse position than it would have been in if the Tax Payment had not
been required; provided that no Lender Party shall be required to make
any such reimbursement if it reasonably believes the making of such
reimbursement would cause it to lose the benefit of the Tax Credit or
would adversely affect in any other respect its tax position. Subject
to the other terms hereof, any claim by a Lender Party for a Tax
Credit shall be made in a manner, order and amount as such Lender
Party determines in its sole and absolute discretion. Except to the
extent necessary for Micro to evaluate any Tax Credit, no Lender Party
shall be obligated to disclose information regarding its tax affairs
or computations to any Obligor, it being understood and agreed that in
no event shall any Lender Party be required to disclose information
regarding its tax position that it deems to be confidential (other
than with respect to the Tax Credit).
SECTION 5.8 PAYMENTS. All payments by an Obligor pursuant to
this Agreement or any other Loan Document, whether in respect of principal,
interest, fees or otherwise, shall be made as set forth in this SECTION 5.8.
SECTION 5.8.1 PRO-RATA CREDIT EXTENSIONS.
(a) All payments (whether in respect of principal,
interest or otherwise) pursuant to this Agreement or any other Loan
Document with respect to Pro-Rata Credit Extensions or any other
amount payable hereunder shall be made by the relevant Borrower in the
currency in which the Obligation was denominated (the "REQUIRED
CURRENCY"). All such payments (other than amounts payable with
respect to Non-Rata Revolving Loans, Non-Rata Reimbursement
Obligations, fees payable pursuant to SECTION 4.3 -- which fees shall
be paid by Micro or the relevant Borrower to the Administrative Agent
for the account of the relevant payee -- 11.3 or 11.4 and payments
made to a Withdrawing Lender pursuant to SECTION 9.4, shall be made by
the relevant Borrower to the Administrative Agent for the account of
each Lender based upon its Adjusted Percentage in the case of Pro-Rata
Letters of Credit and its Adjusted Percentage in the case of any
Pro-Rata Revolving Loan (such Adjusted Percentage to be calculated on
the date each such Pro-Rata Revolving Loan was made). All such
payments required to be made to the Administrative Agent shall be
made, without set-off, deduction or counterclaim, not later than 1:00
p.m., Toronto time, on the date when due, in same day or immediately
available funds, to such account as the Administrative Agent shall
specify from time to time by notice to the relevant Borrower. Funds
received after that time shall be deemed to have been received by the
Administrative Agent on the next succeeding Business Day. The
Administrative Agent shall promptly remit in same day funds to each
Lender its share, if any, of such payments received by the
Administrative Agent for the account of such Lender. Whenever any
payment hereunder shall be stated to be due on a day other than a
Business Day, such payment shall, except as otherwise required
pursuant to CLAUSE (d) of the definition of Interest Period, be made
on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of interest or
fees, as the case may be.
54 CANADIAN CREDIT AGREEMENT
61
(b) In the case of any payment made pursuant to the
preceding CLAUSE (a) by a Borrower to the Administrative Agent, unless
the Administrative Agent will have received notice from that Borrower
prior to the date on which any such payment is due hereunder that such
Borrower will not make such payment in full, the Administrative Agent
may assume that such Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender
on such due date an amount equal to the amount then due to such
Lender. If that Borrower shall not have so made such payment in full
to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand any such amount distributed
to the Lender to the extent that such amount was not paid by that
Borrower to the Administrative Agent together with interest thereon,
for each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
SECTION 5.8.2 NON-RATA OBLIGATIONS. All payments (whether in
respect of principal, interest, fees or otherwise) by any Borrower pursuant to
this Agreement or any other Loan Document with respect to the Non-Rata Credit
Extensions shall be made by such Borrower, in the Required Currency and in same
day or immediately available funds, to the relevant Lender or Issuer, as the
case may be (for its own account), at an account specified by such Lender or
Issuer, as the case may be, from time to time by notice to the relevant
Borrower. All such payments on account of Non-Rata Revolving Loans or Non-Rata
Reimbursement Obligations shall be made on the date due, without set-off,
deduction or counterclaim and at the times agreed to between the relevant
Borrower and the relevant Lender or Issuer, as the case may be. Each Lender
that has made a Non-Rata Revolving Loan agrees to give the Administrative Agent
prompt notice of any payment or failure to pay when due of any amounts owing
with respect to each such Non-Rata Revolving Loan. Each Issuer that has issued
a Non-Rata Letter of Credit agrees to give the Administrative Agent prompt
notice of any payment or failure to pay when due any Non-Rata Reimbursement
Obligations or any other amounts owing with respect to such Non-Rata Letter of
Credit.
SECTION 5.9 SHARING OF PAYMENTS.
(a) While no Pro-Rata Distribution Event exists (i)
the Administrative Agent shall remit payments made by the Borrowers to
it pursuant to SECTION 5.8.1, and (ii) and each Lender shall retain
for its own account all payments received by it pursuant to SECTION
5.8.2.
(b) From and after the occurrence (and during the
continuance) of a Pro-Rata Distribution Event:
(i) the Lenders shall share all collections and
recoveries in respect of the Credit Extensions and Obligations
hereunder on a pro rata basis, based on the respective
Outstanding Credit Extensions of each Lender, including unpaid
principal, interest, indemnities, and fees payable with
respect thereto;
(ii) each Borrower shall make payment of all
amounts owing under this Agreement (whether in respect of
principal, interest, fees, or otherwise or on account of any
Pro-Rata Credit Extension or Non-Rata Credit Extension) to the
Administrative
55 CANADIAN CREDIT AGREEMENT
62
Agent for the account of the Lenders as provided in CLAUSE
(b)(i) above, and the Administrative Agent shall promptly
remit in same day funds to each Lender its share, if any, of
all payments received by the Administrative Agent for the
account of such Lender; and
(iii) If any Lender Party ever receives or
recovers (whether by set-off or otherwise) any amount in
excess of its share of payments in accordance with CLAUSE
(b)(i) above, then that Lender Party shall within ten days pay
to the Administrative Agent an amount equal to that excess,
which the Administrative Agent shall promptly share with each
other Lender Party so that each Lender Party has thereafter
received the portion of that receipt or recovery to which it
was entitled under CLAUSE (b)(i) above.
(c) Upon the occurrence of a Pro-Rata Distribution
Event (i) if (A) the Outstanding Credit Extensions consisting of
Pro-Rata Extensions of any Lender Party is less than (B) that Lender
Party's Percentage of the then total Outstanding Credit Extensions
consisting of Pro-Rata Credit Extensions owed to all Lender Parties,
then (ii) that Lender Party shall within ten days pay to the
Administrative Agent an amount equal to that deficiency, which the
Administrative Agent shall promptly share with each other Lender Party
so that each Lender Party is thereafter owed its Percentage of all
Outstanding Credit Extensions consisting of Pro-Rata Credit Extensions
owed to all Lender Parties.
(d) In respect of the payments made by a Lender Party
(a "PAYING LENDER PARTY") to the Administrative Agent that are in turn
paid to other Lender Parties under CLAUSES (b)(iii) and (c)(ii) above:
(i) the Administrative Agent shall treat such
payment as if it were a payment by the relevant Obligor to the
Lender Parties who receive payments made by a Paying Lender
under those clauses in respect of amounts owed to those
receiving Lender Parties;
(ii) as between (A) the relevant Obligor and the
Paying Lender Party, the amount paid by the Paying Lender
Party shall be treated as not having been paid, but (B) that
Obligor and the Lender Parties receiving payment under those
clauses, the amount paid by the Paying Lender Party shall been
treated as having been paid to those receiving Lender Parties
to the extent received by them under those clauses; and
(iii) if a Paying Lender Party is subsequently
required to repay to any Obligor any amount received or
recovered by it and paid to the other Lender Parties pursuant
to this CLAUSE (c), then each relevant Lender Party shall
promptly repay to the Administrative Agent for the account of
the Paying Lender Party the portion of such amount distributed
to it pursuant to this CLAUSE (c), together with interest
thereon at a rate sufficient to reimburse the Paying Lender
Party for any interest which it has been required to pay to
such Obligor in respect of such portion of such amount.
SECTION 5.10 RIGHT OF SET-OFF. Upon the occurrence and during
the continuance of any Event of Default, each Lender Party is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
56 CANADIAN CREDIT AGREEMENT
63
provisional or final but excluding, for the avoidance of doubt, any payment
received pursuant to this Agreement by the Administrative Agent in its capacity
qua Administrative Agent on behalf of the Lenders) at any time held and other
indebtedness at any time due and owing by such Lender Party (in any currency
and at any branch or office) to or for the credit or the account of any Obligor
against any and all of the Obligations of such Obligor now or hereafter
existing under this Agreement or any other Loan Document that are at such time
due and owing, irrespective of whether or not such Lender Party shall have made
any demand under this Agreement or such other Loan Document (other than any
notice expressly required hereby). The rights of each Lender Party under this
SECTION 5.10 are in addition to other rights and remedies (including other
rights of set-off) which such Lender Party may have.
SECTION 5.11 JUDGMENTS, CURRENCIES, ETC. The obligation of
each Obligor to make payment of all Obligations in the Required Currency shall
not be discharged or satisfied by any tender, or any recovery pursuant to any
judgment, which is expressed in or converted into any currency other than the
Required Currency, except to the extent such tender or recovery shall result in
the actual receipt by the recipient at the office required hereunder of the
full amount of the Required Currency expressed to be payable under this
Agreement or any other Loan Document. Without limiting the generality of the
foregoing, each Obligor authorizes the Administrative Agent (or in the case of
a Non-Rata Revolving Loan or any other amount required to be paid to any Lender
directly, the relevant Lender) on any tender or recovery in a currency other
than the Required Currency to purchase in accordance with normal banking
procedures the Required Currency with the amount of such other currency so
tendered or recovered. The obligation of each Obligor to make payments in the
Required Currency shall be enforceable as an alternative or additional cause of
action for the purpose of recovery in the Required Currency of the amount (if
any) by which such actual receipt shall fall short of the full amount of the
Required Currency expressed to be payable under this Agreement or any other
Loan Document, and shall not be affected by judgment being obtained for any
other sums due under this Agreement or such other Loan Document.
SECTION 5.12 REPLACEMENT OF LENDERS. Each Lender hereby
severally agrees that if such Lender (a "SUBJECT LENDER") makes demand upon any
Borrower for (or if any Borrower is otherwise required to pay) amounts pursuant
to SECTION 4.2.6, 5.3, 5.5 or 5.7, or if the obligation of such Lender to make
Loans is suspended pursuant to SECTION 5.1(A), such Borrower may, so long as no
Event of Default shall have occurred and be continuing, replace such Subject
Lender with another financial institution pursuant to an assignment in
accordance with SECTION 11.11.1; provided that (i) unless such financial
institution is a Lender or an Affiliate of a Lender, such financial institution
shall become a Lender only with the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld, and (ii) the purchase
price paid by such designated financial institution shall be in the amount of
such Subject Lender's Loans and its applicable Adjusted Percentage of
outstanding Reimbursement Obligations, together with all accrued and unpaid
interest and fees in respect thereof, plus all other amounts (including the
amounts demanded and unreimbursed under SECTIONS 4.2.6, 5.3, 5.5 and 5.7),
owing to such Subject Lender hereunder. Upon the effective date of such
assignment, such designated financial institution shall become a Lender for all
purposes of this Agreement and the other Loan Documents.
SECTION 5.13 CHANGE OF LENDING OFFICE. If Micro or any other
Obligor is required to pay additional amounts to or for the account of any
Lender Party pursuant to SECTION 4.2.6, 5.3, 5.5, or 5.7, or if the obligation
of any Lender to make or continue Loans is suspended pursuant to SECTION
5.1(A), then such Lender Party will change the jurisdiction of its Lending
Office if, in the judgment of such Lender Party, such change (a) will eliminate
or reduce any such additional payment which may thereafter accrue
57 CANADIAN CREDIT AGREEMENT
64
or will avoid such suspension and (b) is not otherwise disadvantageous to such
Lender Party.
ARTICLE VI
CONDITIONS TO MAKING CREDIT EXTENSIONS
SECTION 6.1 INITIAL CREDIT EXTENSION. The obligation of each
Lender and, if applicable, any Issuer to make the initial Credit Extension
shall be subject to the prior or concurrent satisfaction of each of the
conditions precedent set forth in this SECTION 6.1.
SECTION 6.1.1 RESOLUTIONS, ETC. The Administrative Agent will
have received from each Obligor a certificate, dated the Effective Date and
with counterparts for each Lender, duly executed and delivered by the
Secretary, Assistant Secretary, or other authorized representative of such
Obligor as to:
(a) resolutions of its Board of Directors or its
Executive Committee, as the case may be, then in full force and effect
authorizing the execution, delivery and performance of this Agreement
and the Guaranty and each other Loan Document to be executed by it,
(b) the incumbency and signatures of those of its
officers authorized to act as Authorized Persons for it with respect
to this Agreement and the Guaranty and each other Loan Document to be
executed by it; and
(c) the Organic Documents of such Obligor (including,
without limitation, with respect to Micro, any amendments,
modifications, or supplements to the Board Representation Agreement
since October 30, 1996),
upon which certificate each Lender may conclusively rely until the
Administrative Agent shall have received a further certificate of the Secretary
of the relevant Obligor canceling or amending such prior certificate. In
addition, each Obligor shall, where applicable, have delivered to the
Administrative Agent a good standing or equivalent certificate from the
relevant governmental regulatory institution of its jurisdiction of
incorporation, each such certificate to be dated a date reasonably near (but
prior to) the date of the initial Credit Extension.
SECTION 6.1.2 EFFECTIVE DATE CERTIFICATE. The Administrative
Agent shall have received, with counterparts for each Lender, the Effective
Date Certificate, dated the Effective Date and duly executed and delivered by
the chief executive officer, an Authorized Person or the Treasurer of Micro.
All documents and agreements required to be appended to the Effective Date
Certificate shall be in form and substance satisfactory to the Lenders.
SECTION 6.1.3 GUARANTIES, ETC. The Administrative Agent shall
have received, with counterparts for each Lender (a) each of the Guaranties in
effect as of the Effective Date, dated the date hereof, duly executed and
delivered by an Authorized Person of the relevant Guarantor and (b) the
Intra-Group Agreement, dated the date hereof and duly executed by each Borrower
that is a Guarantor.
SECTION 6.1.4 FINANCIAL INFORMATION, ETC. The Administrative
Agent shall have received true and correct copies for each Lender, of
(a) audited consolidated financial statements of
Micro and its Consolidated
58 CANADIAN CREDIT AGREEMENT
65
Subsidiaries for its last Fiscal Year, prepared in accordance with GAAP
free of any Impermissible Qualifications; and
(b) unaudited consolidated financial statements for
Micro and its Consolidated Subsidiaries for the first two Fiscal
Periods of the 1997 Fiscal Year, prepared in accordance with GAAP.
SECTION 6.1.5 COMPLIANCE CERTIFICATE. The Administrative Agent
shall have received, with counterparts for each Lender, an initial Compliance
Certificate, dated as of the Effective Date.
SECTION 6.1.6 CONSENTS, ETC. The Administrative Agent shall
have received evidence satisfactory to it as to the receipt by each Obligor of
any necessary consents or waivers under any agreement applicable to such
Obligor in order to enable such Obligor to enter into this Agreement and any
other Loan Document, to perform its obligations hereunder and thereunder and,
in the case of each Borrower, to obtain Credit Extensions hereunder.
SECTION 6.1.7 CLOSING FEES, EXPENSES, ETC. The Agents, its
counsel, and each Lender shall have received payment in full of all fees,
costs, and expenses under SECTIONS 4.3 and 11.3 to the extent (a) then due and
payable and (b) unless an amount is otherwise provided by the Loan Documents or
the Fee Letter and without waiving the right for subsequent reimbursement in
accordance with the Loan Documents, to the extent that a reasonably detailed
invoice is presented to Micro by October 23, 1997.
SECTION 6.1.8 OPINIONS OF COUNSEL. The Administrative Agent
shall have received opinions of counsel, dated the Effective Date and addressed
to the Agents and all the Lenders, from:
(a) Xxxxx X. Xxxxxxxx, General Counsel of Micro,
covering the matters set forth in EXHIBIT M hereto,
(b) Xxxxx Xxxx & Xxxxxxxx, special counsel to Micro,
covering the matters set forth in EXHIBIT N hereto;
(c) Fogler, Rubinoff, special Canadian counsel to
Micro Canada, covering the matters set forth in EXHIBIT O hereto;
(d) Xxxxx & XxXxxxxx, special Belgian counsel to
Coordination Center, covering the matters set forth in EXHIBIT P
hereto; and
(e) Xxxxx & Xxxxxxxx, special Singapore counsel to
Micro Singapore, covering the matters set forth in EXHIBIT Q hereto.
SECTION 6.1.9 SATISFACTORY LEGAL FORM. All documents executed
or submitted pursuant to this ARTICLE VI by or on behalf of each Obligor shall
be satisfactory in form and substance to the Administrative Agent (who may rely
upon the advice of its legal counsel with respect to legal matters in making
such determination), and the Administrative Agent shall have received such
additional information, approvals, opinions, documents, or instruments as the
Administrative Agent or the Required Lenders may reasonably request.
59 CANADIAN CREDIT AGREEMENT
66
SECTION 6.2 ALL CREDIT EXTENSIONS. The obligation of each
Lender to make any Credit Extension (including the initial Credit Extension)
shall be subject to the satisfaction of each of the additional conditions
precedent set forth in this SECTION 6.2.
SECTION 6.2.1 COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC.
Both before and after giving effect to such Credit Extension other than any
continuation or conversion (except as otherwise set forth in the initial
proviso to this section) of a Borrowing (but, if any Default of the nature
referred to in SECTION 9.1.5 shall have occurred with respect to any other
Indebtedness, without giving effect to the application, directly or indirectly,
of the proceeds of such Credit Extension to such other Indebtedness), the
following statements shall be true and correct:
(a) the representations and warranties of each
Obligor set forth in ARTICLE VII (excluding, however, those contained
in SECTION 7.8) and in any other Loan Document shall be true and
correct with the same effect as if then made (unless stated to relate
solely to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date);
provided that if any of the financial statements delivered pursuant to
CLAUSE (B) of SECTION 8.1.1 do not present fairly the consolidated
financial condition of the Persons covered thereby as of the dates
thereof and the results of their operations for the periods then ended
and Micro subsequently delivers one or more financial statements
pursuant to CLAUSE (A) or (B) of SECTION 8.1.1 which, in the opinion
of the Required Lenders, effectively cures any omission or
misstatement contained in such prior delivered financial statement,
then the representation and warranty contained in SECTION 7.6 as it
relates to such prior delivered financial statement shall be deemed
satisfied for purposes hereof (it being understood and agreed that
such subsequent delivered financial statements shall be deemed to have
cured such earlier delivered inaccurate financial statements unless
the Required Lenders raise an objection with respect thereto);
(b) except as disclosed in ITEM 7.8 (Litigation) of
the Disclosure Schedule:
(i) no labor controversy, litigation,
arbitration or governmental investigation or proceeding shall
be pending or, to the knowledge of any Obligor, threatened
against any Obligor, or any of their respective Consolidated
Subsidiaries in respect of which there exists a reasonable
possibility of an outcome that would result in a Material
Adverse Effect or that would affect the legality, validity or
enforceability of this Agreement or any other Loan Document;
and
(ii) no development shall have occurred in any
labor controversy, litigation, arbitration or governmental
investigation or proceeding so disclosed in respect of which
there exists a reasonable possibility of an outcome that would
result in a Material Adverse Effect;
(c) no Default shall have occurred and be continuing,
and no Obligor, nor any of their respective Subsidiaries, shall be in
violation of any law or governmental regulation or court order or
decree which, singly or in the aggregate, results in, or would
reasonably be expected to result in, Material Adverse Effect; and
(d) the Outstanding Credit Extensions of all the
Lenders do not exceed the Total Credit Commitment Amount (as such
amount may be reduced from time to time pursuant to
60 CANADIAN CREDIT AGREEMENT
67
SECTION 2.3);
provided that, in the case of any continuation or conversion of a Borrowing, no
Event of Default shall have occurred and be continuing.
SECTION 6.2.2 CREDIT EXTENSION REQUEST. In the case of any
Pro-Rata Credit Extension the Administrative Agent shall have received the
relevant Credit Extension Request in a timely manner as herein provided for
such Pro-Rata Credit Extension. Delivery of a Credit Extension Request and the
acceptance by Micro or any other Borrower of the proceeds of any Pro-Rata
Credit Extension shall constitute a representation and warranty by each Obligor
that, on the date of making such Pro-Rata Credit Extension (both immediately
before and after giving effect to the making of such Pro-Rata Credit Extension
and the application of the proceeds thereof), the statements made in SECTION
6.2.1 are true and correct.
SECTION 6.2.3 NON-RATA REVOLVING LOANS. In the case of any
requested Non-Rata Revolving Loan, each of the applicable conditions set forth
in SECTIONS 3.3 and 6.2 or otherwise specified by the relevant Lender in
connection with such Non-Rata Revolving Loan shall have been satisfied.
SECTION 6.2.4 NON-RATA LETTERS OF CREDIT. In the case of any
requested Non-Rata Letter of Credit, each of the applicable conditions set
forth in SECTIONS 3.4 and 6.2 or otherwise specified by the relevant Issuer
(with respect to Non-Rata Letters of Credit) in connection with such Non-Rata
Letter of Credit shall have been satisfied.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender Parties to enter into this Agreement and
to make Credit Extensions hereunder, each Borrower represents and warrants unto
the Administrative Agent and each Lender with respect to itself and the other
Obligors as set forth in this ARTICLE VII.
SECTION 7.1 ORGANIZATION, ETC. Each of the Obligors and each
of the respective Subsidiaries is a company or corporation, as the case may be,
validly organized and existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the nature of its business requires such qualification and where the
failure to so qualify and to maintain such good standing, singularly or in the
aggregate, has resulted in, or would reasonably be expected to result in, a
Material Adverse Effect, and has full power and authority and holds all
requisite governmental licenses, permits, authorizations and other approvals to
enter into and perform its Obligations under this Agreement and each other Loan
Document to which it is a party and to own and hold under lease its property
and to conduct its business substantially as currently conducted by it,
excluding any such governmental licenses, permits or other approvals in respect
of which the failure to so obtain, hold or maintain has not caused, and would
not reasonably be expected to result in, a Material Adverse Effect.
SECTION 7.2 DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The
execution, delivery, and performance by each Obligor of this Agreement and each
other Loan Document executed or to be
61 CANADIAN CREDIT AGREEMENT
68
executed by it are within such Obligor's corporate powers, have been duly
authorized by all necessary corporate action, and do not
(a) contravene such Obligor's Organic Documents;
(b) contravene any law or governmental regulation or
court decree or order binding or affecting such Obligor; or
(c) result in, or require the creation or imposition
of, any Lien on any of such Obligor's properties.
SECTION 7.3 NO DEFAULT. None of the Obligors, nor any of
their respective Subsidiaries, is in Default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note, or
in any indenture, loan agreement, or other agreement, in connection with or as
a result of which Default there exists a reasonable possibility that a Material
Adverse Effect could arise. The execution, delivery and performance by each
Obligor of this Agreement and each other Loan Document executed or to be
executed by such Obligor will not conflict with, or constitute a breach of, or
a Default under, any such bond, debenture, note, indenture, loan agreement or
other agreement to which any Obligor or any of their respective Subsidiaries is
a party or by which it is bound, in connection with, or as a result of which,
conflict, breach or Default, there exists a reasonable possibility that a
Material Adverse Effect could arise.
SECTION 7.4 GOVERNMENT APPROVAL, REGULATION, ETC. No action
by, and no notice to or filing with, any governmental authority or regulatory
body or other Person and no payment of any stamp or similar tax, is required
for the due execution, delivery, or performance by any Obligor of this
Agreement or any other Loan Document to which it is a party. No Obligor (nor
any of its Subsidiaries) is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT"), or 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," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 7.5 VALIDITY, ETC. This Agreement constitutes, and
each other Loan Document executed by any Obligor will, on the due execution and
delivery thereof, constitute, the legal, valid and binding obligations of each
Obligor party thereto, enforceable against such Obligor in accordance with
their respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors' rights generally or by general principles of equity.
SECTION 7.6 FINANCIAL INFORMATION. The financial statements
of Micro and its Consolidated Subsidiaries to be delivered pursuant to SECTION
6.1.5 will have been prepared in accordance with GAAP and present fairly
(subject, in the case of such financial statements delivered pursuant to CLAUSE
(b) thereof (which financial statements, in accordance with SECTION 1.4(a)
hereof, are not required to contain certain footnote disclosures required by
GAAP), to ordinary year-end adjustments) the consolidated financial condition
of the Persons covered thereby as at the dates thereof and the results of their
operations for the periods then ended. All the financial statements delivered
pursuant to CLAUSES (a) and (b) of SECTION 8.1.1 have been and will be prepared
in accordance with GAAP consistently applied, and do or will present fairly
(subject, in the case of such financial statements
62 CANADIAN CREDIT AGREEMENT
69
delivered pursuant to CLAUSE (b) thereof (which financial statements, in
accordance with SECTION 1.4(a) hereof, are not required to contain certain
footnote disclosures required by GAAP), to ordinary year-end adjustments) the
consolidated financial condition of the Persons covered thereby as of the dates
thereof and the results of their operations for the periods then ended.
SECTION 7.7 NO MATERIAL ADVERSE EFFECT. Since December 31,
1996, there has been no event or events which, singly or in the aggregate, have
resulted in a Material Adverse Effect.
SECTION 7.8 LITIGATION, LABOR CONTROVERSIES, ETC. Except as
disclosed in ITEM 7.8 (Litigation) of the Disclosure Schedule, there is no
pending or, to the knowledge of any Obligor, threatened litigation, action,
proceeding or labor controversy affecting any Obligor, or any of their
respective Subsidiaries, or any of their respective properties, businesses,
assets or revenues, in respect of which there exists a reasonable possibility
of an outcome that would result in a Material Adverse Effect or that would
affect the legality, validity or enforceability of this Agreement or any other
Loan Document.
SECTION 7.9 SUBSIDIARIES. As of the date hereof, Micro has
no Subsidiaries, except those Subsidiaries which are identified in ITEM 7.9
(Existing Subsidiaries) of the Disclosure Schedule and certain other
Subsidiaries that are shell corporations that do not conduct any business and
do not in the aggregate have a net worth exceeding $1,000,000.
SECTION 7.10 OWNERSHIP OF PROPERTIES. Each Obligor and each
of their respective Subsidiaries owns good and marketable title (or their
respective equivalents in any applicable jurisdiction) to all of its properties
and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear of all Liens, charges or claims except as permitted
pursuant to SECTION 8.2.2, except where such failure or failures to own, singly
or in the aggregate, has not resulted in, or would not reasonably be expected
to result in, a Material Adverse Effect.
SECTION 7.11 TAXES. Each Obligor and each of their respective
Subsidiaries has filed all material tax returns and reports it reasonably
believes are required by law to have been filed by it and has paid all taxes
and governmental charges thereby shown to be owing, except as disclosed in ITEM
7.11 (Taxes) of the Disclosure Schedule and except for any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books; provided that, with respect to any Subsidiary that
is not a Material Subsidiary, this representation and warranty shall be
satisfied if the tax returns or reports not so filed or the taxes or
governmental charges owing by each such Subsidiary are not with respect to any
income, sales or use tax and the amount so owing (or which would be so owing if
such tax returns or reports were duly filed) with respect to all such
Subsidiaries, does not exceed in the aggregate $1,000,000 at any time.
SECTION 7.12 PENSION AND WELFARE PLANS. Except to the extent
that any such termination, liability, penalty or fine would not (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect (a) during the twelve-consecutive-month period prior to the date
hereof and prior to the date of any Credit Extension hereunder, except as
disclosed in ITEM 7.12 (Employee Benefit Plans) of the Disclosure Schedule, no
steps have been taken to terminate any Pension Plan, and no contribution
failure has occurred with respect to any
63 CANADIAN CREDIT AGREEMENT
70
Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA,
(b) no condition exists or event or transaction has occurred with respect to
any Pension Plan which might result in the incurrence by any Obligor or any
member of the related Controlled Group of any material liability with respect
to any contribution thereto, fine or penalty, and (c) except as disclosed in
ITEM 7.12 (Employee Benefit Plans) of the Disclosure Schedule, neither any
Obligor nor any member of the related Controlled Group has any material
contingent liability with respect to any post-retirement benefit under a
Welfare Plan, other than liability for continuation coverage described in Part
6 of Title I of ERISA.
SECTION 7.13 ENVIRONMENTAL WARRANTIES.
(a) Each Obligor and each of their respective
Subsidiaries has obtained all environmental, health and safety
permits, licenses and other authorizations required under all
Environmental Laws to carry on its business as now being or as
proposed to be conducted, except to the extent failure to have any
such permit, license or authorization would not (either individually
or in the aggregate) reasonably be expected to have a Material Adverse
Effect. Each of such permits, licenses and authorizations is in full
force and effect and each Obligor and each of their respective
Subsidiaries is in compliance with the terms and conditions thereof,
and is also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law
or in any plan, judgment, injunction, notice or demand letter issued,
entered or approved thereunder, except to the extent failure to comply
therewith would not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.
(b) No notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint
has been filed, no penalty has been assessed and no investigation or
review is pending or, to the knowledge of any Obligor, threatened by
any governmental or other entity with respect to any alleged failure
by any Obligor or any of their respective Subsidiaries to have any
environmental, health or safety permit, license or other authorization
required under any Environmental Law in connection with the conduct of
the business of any Obligor or any of their respective Subsidiaries or
with respect to any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any Release of any Hazardous
Materials generated by any Obligor or any of their respective
Subsidiaries, except to the extent failure to have any such permit,
license or authorization would not (either individually or in the
aggregate) reasonably be expected to have a Material Adverse Effect.
SECTION 7.14 OUTSTANDING INDEBTEDNESS. As of June 27, 1997,
neither Micro nor any of its Subsidiaries had any outstanding Indebtedness
other than Indebtedness disclosed in ITEM 7.14 (Outstanding Indebtedness) of
the Disclosure Schedule and Indebtedness that could be incurred pursuant to
SECTION 8.2.1 (a)(ii).
SECTION 7.15 ACCURACY OF INFORMATION.
(a) Except as provided in CLAUSE (b) below, all
factual information furnished by or on behalf of any Obligor to any
Lender Party for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, when taken as a whole, to the
best of the knowledge of each Borrower, and all other factual
information hereafter furnished by or on behalf of any Obligor to any
Lender Party will be, when taken as a whole, to the best of the
knowledge of each Borrower, true and accurate in all material respects
on the date as of which
64 CANADIAN CREDIT AGREEMENT
71
such information is dated or certified and (in the case of any such
information furnished prior to the date hereof) as of the date hereof
(unless such information relates to an earlier date, in which case
such information, when taken as a whole, shall be true and accurate in
all material respects as of such earlier date), and is not, or shall
not be, as the case may be, when taken as a whole, incomplete by
omitting to state any material fact necessary to make such information
not misleading.
(b) The information (i) in any financial projections
furnished under this Agreement is and will be based upon assumptions
and information believed by Micro to be reasonable and (ii) furnished
with express written disclaimers with regard to the accuracy of that
information, is and shall be subject to those disclaimers.
SECTION 7.16 PATENTS, TRADEMARKS, ETC. Each Obligor and each
of their respective Subsidiaries owns and possesses, or has a valid and
existing license of, or other sufficient interest in, all such patents, patent
rights, trademarks, trademark rights, trade names, trade name rights, service
marks, service xxxx rights and copyrights as is necessary for the conduct of
the business of each such Obligor or its Subsidiaries as now conducted,
without, to the best of the knowledge of each such Obligor, any infringement
upon rights of other Persons, which infringement results in or would reasonably
be expected to result in a Material Adverse Effect, and there is no license or
other interest or right, the loss of which results in, or would reasonably be
expected to result in, a Material Adverse Effect.
SECTION 7.17 MARGIN STOCK. No part of the proceeds of any
Credit Extension shall be used at any time by any Obligor or any of their
respective Subsidiaries for the purpose, whether immediate, incidental or
ultimate, of buying or carrying Margin Stock (within the meaning of Regulation
U (as amended, modified, supplemented or replaced and in effect from time to
time, "REGULATION U") promulgated by the F.R.S. Board of Governors of the
Federal Reserve System (together with any successor thereto, the "F.R.S.
BOARD") or to extend credit to others for the purpose of purchasing or carrying
any Margin Stock if any such use or extension of credit described in this
SECTION 7.17 would cause any of the Lender Parties to violate the provisions of
Regulation U. Neither any Obligor nor any of their respective Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purposes of purchasing or carrying any such Margin
Stock within the meaning of Regulation U. Not more than 25% of the value of the
assets of any Obligor or any Subsidiary of any Obligor is, as of the date
hereof, represented by Margin Stock. No part of the proceeds of any Credit
Extension will be used by any Obligor or any of their respective Subsidiaries
for any purpose which violates, or which is inconsistent with, any regulations
promulgated by the F.R.S. Board, including Regulation U.
ARTICLE VIII
COVENANTS
SECTION 8.1 AFFIRMATIVE COVENANTS. Each Borrower agrees with
the Agents and each Lender that, until all the Commitments have terminated and
all Obligations have been paid and performed in full, each Borrower will
perform its respective obligations set forth in this SECTION 8.1.
SECTION 8.1.1 FINANCIAL INFORMATION, REPORTS, NOTICES, ETC.
Micro will furnish, or will
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72
cause to be furnished, to each Lender Party (1) promptly after filing copies of
each Form 10-K, Form 10-Q, and Form 8-K (or any respective successor forms)
filed with the Securities and Exchange Commission (or any successor authority)
or any national securities exchange (including, in each case, any exhibits
thereto requested by any Lender Party), and (2) to the extent not disclosed in
such Forms 10-K, Forms 10-Q, and Forms 8-K (or respective successor forms) for
the applicable period, copies of the following financial statements, reports,
notices and information:
(a) as soon as available and in any event within 120
days after the end of each Fiscal Year of Micro, a copy of the annual
audit report for such Fiscal Year for Micro and its Consolidated
Subsidiaries, including therein consolidated balance sheets of Micro
and its Consolidated Subsidiaries as of the end of such Fiscal Year
and consolidated statements of earnings, stockholders' equity and cash
flow of Micro and its Consolidated Subsidiaries for such Fiscal Year,
setting forth in each case, in comparative form, the figures for the
preceding Fiscal Year, in each case certified (without any
Impermissible Qualification, except that (i) qualifications relating
to pre-acquisition balance sheet accounts of Person(s) acquired by
Micro or any of its Subsidiaries and (ii) statements of reliance in
the auditor's opinion on another accounting firm shall not be deemed
an Impermissible Qualification) in a manner satisfactory to the
Securities and Exchange Commission (under applicable United States
securities law) by Price Waterhouse or its successors or other
independent public accountants of national reputation;
(b) as soon as available and in any event within 60
days after the end of each of the first three Fiscal Periods occurring
during any Fiscal Year of Micro, a copy of the unaudited consolidated
financial statements of Micro and its Consolidated Subsidiaries,
consisting of (i) a balance sheet as of the close of such Fiscal
Period and (ii) related statements of earnings and cash flows for such
Fiscal Period and from the beginning of such Fiscal Year to the end of
such Fiscal Period, in each case certified by an officer who is an
Authorized Person of Micro as to (A) being a complete and correct copy
of such financial statements which have been prepared in accordance
with GAAP consistently applied as provided in SECTION 1.4, and (B)
presenting fairly the financial position of Micro and its Consolidated
Subsidiaries;
(c) at the time of delivery of each financial
statement required by CLAUSE (a) or (b) (or Form 10-Q, or 10-K in lieu
thereof), a certificate signed by an Authorized Person of Micro
stating that no Default has occurred and is continuing (or if a
Default has occurred and is continuing, and without prejudice to any
rights or remedies of any Lender Party hereunder in connection
therewith, a statement of the nature thereof and the action which
Micro has taken or proposes to take with respect thereto);
(d) at the time of delivery of each financial
statement required by CLAUSE (a) or (b) (or Form 10-Q or 10-K in lieu
thereof), a Compliance Certificate showing compliance with the
financial covenants set forth in SECTION 8.2 and indicating Micro's
anticipated (which may vary) allocation of Credit Extensions as
between Micro and Micro Canada during the Fiscal Period during which
the Compliance Certificate is delivered;
(e) notice of, as soon as possible after (i) the
occurrence of any material adverse development with respect to any
litigation, action, proceeding, or labor controversy disclosed in ITEM
7.8 (Litigation) of the Disclosure Schedule, or (ii) the commencement
of any labor controversy, litigation, action, or proceeding of the
type described in SECTION 7.8;
66 CANADIAN CREDIT AGREEMENT
73
(f) promptly after the filing thereof, copies of any
registration statements (other than the exhibits thereto and excluding
any registration statement on Form S-8 and any other registration
statement relating exclusively to stock, bonus, option, 401(k) and
other similar plans for officers, directors, and employees of Micro,
Industries, Entertainment, or any of their respective Subsidiaries);
(g) immediately upon becoming aware of the
institution of any steps by any Obligor or any other Person to
terminate any Pension Plan other than pursuant to Section 4041(b) of
ERISA, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under
Section 302(t) of ERISA, or the taking of any action with respect to a
Pension Plan which could result in the requirement that any Obligor
furnish a bond or other security to the PBGC or such Pension Plan, or
the occurrence of any other event with respect to any Pension Plan
which, in any such case, results in, or would reasonably be expected
to result in, a Material Adverse Effect, notice thereof and copies of
all documentation relating thereto;
(h) as soon as possible, and in any event within
three Business Days after becoming aware of the occurrence of a
Default or any inaccuracy in the financial statements delivered
pursuant to CLAUSE (A) or (B) of SECTION 8.1.1 if the result thereof
is not to present fairly the consolidated financial condition of the
Persons covered thereby as of the dates thereof and the results of
their operations for the periods then ended, a statement of an
Authorized Person of Micro setting forth the details of such Default
or inaccuracy and the action which Micro has taken or proposes to take
with respect thereto;
(i) in the case of each Borrower, promptly following
the consummation of any transaction described in SECTION 8.2.5, a
description in reasonable detail regarding the same; and
(j) such other information respecting the condition
or operations, financial or otherwise, of each Borrower, or any of
their respective Subsidiaries as any Lender through the Administrative
Agent may from time to time reasonably request.
SECTION 8.1.2 COMPLIANCE WITH LAWS, ETC. Each Borrower will
(and each Borrower will cause each of its Subsidiaries to) comply in all
respects with all applicable laws, rules, regulations and orders the
noncompliance with which results in, or would reasonably be expected to result
in, a Material Adverse Effect, such compliance to include (without limitation):
(a) except as may be otherwise permitted pursuant to
SECTION 8.2.5, the maintenance and preservation of its corporate
existence (and in the case of Coordination Center, its status as a
coordination center) in accordance with the laws of the jurisdiction
of its incorporation and qualification as a foreign corporation
(subject to the materiality standard referred to above); and
(b) the payment, before the same become delinquent,
of all taxes, assessments and governmental charges imposed upon it or
upon its property except to the extent being diligently contested in
good faith by appropriate proceedings and for which adequate reserves
in accordance with GAAP shall have been set aside on its books;
provided that with respect to any
67 CANADIAN CREDIT AGREEMENT
74
Subsidiary that is not a Material Subsidiary this covenant shall be
satisfied if the taxes, assessments or other governmental charges
owing by each such Subsidiary (i) is not with respect to any income,
sales or use tax and (ii) the amount so owing with respect to all such
Subsidiaries does not exceed in the aggregate $1,000,000 at any time.
SECTION 8.1.3 MAINTENANCE OF PROPERTIES. Each Borrower will
(and each Borrower will cause each of its Subsidiaries to) maintain, preserve,
protect and keep its material properties in good repair, working order and
condition, and make necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be properly conducted
at all times, unless such Borrower or such Subsidiary determines in good faith
that the continued maintenance of any of its properties is no longer
economically desirable.
SECTION 8.1.4 INSURANCE. Each Borrower will (and each Borrower
will cause each of its Subsidiaries to) maintain, or cause to be maintained
with responsible insurance companies or through such Borrower's own program of
self-insurance, insurance with respect to its properties and business against
such casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses and will, upon request of the
Administrative Agent, furnish to each Lender at reasonable intervals a
certificate of an Authorized Person of such Borrower setting forth the nature
and extent of all insurance maintained by such Borrower and each of its
Subsidiaries in accordance with this SECTION 8.1.4.
SECTION 8.1.5 BOOKS AND RECORDS. Each Borrower will (and each
Borrower will cause each of its Subsidiaries to) keep books and records which
accurately reflect all of its business affairs and transactions and permit the
Administrative Agent and each Lender, or any of their respective
representatives, at reasonable times and intervals and upon reasonable advance
notice, to visit all of its offices, to discuss its financial matters with its
officers and independent public or chartered accountants (and each Borrower
hereby authorizes such independent public or chartered accountants to discuss
the financial matters of such Borrower and its Subsidiaries with the
Administrative Agent and each Lender or its representatives whether or not any
representative of such Borrower is present but provided that an officer of such
Borrower is afforded a reasonable opportunity to be present at any such
discussion) and to examine any of its relevant books or other corporate
records. Micro will pay all expenses associated with the exercise of any
Lender Party's rights pursuant to this SECTION 8.1.5 at any time during the
occurrence and continuance of any Event of Default.
SECTION 8.1.6 ENVIRONMENTAL COVENANT. Each Borrower will (and
each Borrower will cause each of its Subsidiaries to):
(a) use and operate all of its facilities and
properties in compliance with all Environmental Laws which, by their
terms, apply to such use and operation, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith,
and handle all Hazardous Materials in compliance with all
Environmental Laws which, by their terms, apply to such Hazardous
Materials, in each case so that the non-compliance with any of the
foregoing does not result in, or would not reasonably be expected to
result in, either singly or in the aggregate, a Material Adverse
Effect;
(b) immediately notify the Administrative Agent
and provide copies upon
68 CANADIAN CREDIT AGREEMENT
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receipt of all written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties or
compliance with Environmental Laws which, singly or in the aggregate,
result in, or would reasonably be expected to result in, a Material
Adverse Effect, and shall promptly cure and have dismissed with
prejudice any actions and proceedings relating to compliance with
Environmental Laws where the failure to so cure or have dismissed,
singularly or in the aggregate, results in, or would reasonably be
expected to result in, a Material Adverse Effect (it being understood
that this CLAUSE (b) shall not be construed to restrict any Borrower
or any of its Subsidiaries from challenging or defending any such
action or proceeding which it, in its sole discretion, deems advisable
or necessary); and
(c) provide such information and certifications which
the Administrative Agent may reasonably request from time to time to
evidence compliance with this SECTION 8.1.6.
SECTION 8.1.7 USE OF PROCEEDS. Each Borrower shall apply the
proceeds of each Credit Extension in accordance with the last recital of this
Agreement and shall not use directly and immediately, any proceeds to acquire,
or finance the acquisition of, any equity interest in Coordination Center.
SECTION 8.1.8 PARI PASSU. Each Borrower shall ensure that such
Borrower's Obligations rank at least pari passu with all other unsecured
Indebtedness of such Borrower.
SECTION 8.1.9 GUARANTEE OR SURETYSHIP. If any Borrower or any
of its Subsidiaries becomes a party to any contract of guarantee or suretyship
which would constitute Indebtedness, or if any of its assets becomes subject to
such a contract, that contract will be disclosed in the next financial
information to be provided by Micro pursuant to CLAUSE (c) of SECTION 8.1.1,
provided, however, that any failure to comply with the disclosure obligations
of this SECTION 8.1.9 shall not constitute a Default unless the existence of
the contract or contracts of guarantee or suretyship which Micro fails to
disclose would result in a Default under CLAUSE (c) of SECTION 8.2.3.
SECTION 8.1.10 ADDITIONAL GUARANTY.
(a) Micro may cause any of its Subsidiaries to
execute and deliver from time to time in favor of the Lender Parties
an Additional Guaranty for the repayment of the Obligations.
(b) By no later than November 30, 1997, Micro shall
cause Xxxxxx Micro Holdings Limited and Xxxxxx Micro (UK) Limited,
both corporations organized and existing under the laws of England, to
(i) execute and deliver in favor of the Lender Parties an Additional
Guaranty for the repayment of the Obligations, each of which
Additional Guaranties shall be in substantially the form of the
attached EXHIBIT J with such other terms and provisions as the
Administrative Agent determines to be necessary or appropriate (after
consulting with legal counsel) in order that such Additional Guaranty
complies with local laws, rules and regulations and is fully
enforceable (at least to the extent of the form of Additional Guaranty
attached as EXHIBIT J) against Xxxxxx Micro Holdings Limited and
Xxxxxx Micro (UK) Limited under English law, and (ii) furnish to the
Administrative Agent one or more opinions of English counsel (which
counsel and the form and substance of such opinions shall be
reasonably satisfactory to the Administrative Agent and the Required
Lenders) addressed to the Agents and the Lenders addressing the
matters set forth in EXHIBIT M, as it relates to such Additional
Guarantor and
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Additional Guaranty.
(c) Concurrently when or promptly after any of its
Subsidiaries either guarantees any Indebtedness of Micro or any other
Obligor or satisfies (at any time) the requirements hereunder which
describe a Material Subsidiary, Micro shall cause that Subsidiary to
(i) execute and deliver in favor of the Lender Parties an Additional
Guaranty for the repayment of the Obligations which Additional
Guaranty (including, without limitation, any Additional Guaranty
executed and delivered by an Acceding Borrower pursuant to SECTION
6.3.3) shall be in substantially the form of the attached EXHIBIT J,
shall be governed by the laws of a State of the United States, and
shall contain such other terms and provisions as the Administrative
Agent determines to be necessary or appropriate (after consulting with
legal counsel) in order that such Additional Guaranty complies with
local laws, rules, and regulations and is fully enforceable (at least
to the extent of the form of Additional Guaranty attached as EXHIBIT
J) against such Additional Guarantor; provided that, if it shall be
illegal under any local law, rule, or regulation for any Additional
Guaranty to be governed by the law of any State of the United States
and the Administrative Agent shall have received evidence of such
illegality (including, if the Administrative Agent shall so request,
an opinion of local counsel as to such matters, which counsel and the
form and substance of such opinion shall be reasonably satisfactory to
the Administrative Agent) reasonably satisfactory to it, then the
Administrative Agent shall consent to such Additional Guaranty being
governed by the laws of a jurisdiction outside of the United States,
which jurisdiction shall be subject to the prior approval of the
Administrative Agent, and (ii) furnish to the Administrative Agent an
opinion of counsel (which counsel and the form and substance of such
opinion shall be reasonably satisfactory to the Administrative Agent
and the Required Lenders, it being agreed that if the Additional
Guaranty is governed by the laws of any state of the United States,
the General Counsel of Micro shall be satisfactory counsel for
purposes hereof) addressed to the Agents and the Lenders addressing
the matters set forth in EXHIBIT M, as it relates to such Additional
Guarantor and Additional Guaranty.
SECTION 8.1.11 INTRA-GROUP AGREEMENT, ETC. Except to add
additional Subsidiaries of Micro as parties thereto, the terms of the
Intra-Group Agreement shall not be amended or otherwise modified without the
prior consent of the Administrative Agent on behalf of and as directed by the
requisite Lenders, such consent not to be unreasonably withheld. In addition,
no Person a party to the Intra-Group Agreement shall assign any of its rights
or obligations thereunder without the prior consent of the Administrative
Agent, such consent not to be unreasonably withheld.
SECTION 8.2 NEGATIVE COVENANTS. Each Borrower agrees with
the Administrative Agent and each Lender that, until all the Commitments have
terminated and all Obligations have been paid and performed in full, each
Borrower will perform its respective obligations set forth in this SECTION 8.2.
SECTION 8.2.1 RESTRICTION ON INCURRENCE OF INDEBTEDNESS.
(a) No Borrower will (and no Borrower will permit any
of its Subsidiaries to) create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other
than the following:
(i) Any Indebtedness arising (A) in respect of
the Credit Extensions or (B) arising under the U.S. Credit
Agreement or the European Credit Agreement;
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77
(ii) Indebtedness existing as of October 30,
1996, or incurred pursuant to commitments or lines of credit
in effect as of October 30, 1996, (or any renewal or
replacement thereof, so long as such renewals or replacements
do not increase the amount of such Indebtedness or such
commitments or lines of credit), in any case identified in
ITEM 8.2.1(a)(ii) (Ongoing Indebtedness) of the Disclosure
Schedule; and
(iii) additional Indebtedness if after giving
effect to the incurrence thereof the Borrowers are in
compliance with SECTION 8.2.3, calculated as of the date of
the incurrence of such additional Indebtedness, on a pro forma
basis.
(b) Micro will not at the end of any Fiscal Period
permit the sum of (i) Total Indebtedness of Subsidiaries (other than
any Guarantor) and (ii) the Amount of Additional Liens to exceed 15%
of Consolidated Tangible Net Worth.
SECTION 8.2.2 RESTRICTION ON INCURRENCE OF LIENS. No Borrower
will (and no Borrower will permit any of its Subsidiaries to) create, incur,
assume or suffer to exist any Lien upon any of its property, revenues or
assets, whether now owned or hereafter acquired, except:
(a) Liens existing as of October 30, 1996, and
identified in ITEM 8.2.2(a) (Existing Liens) of the Disclosure
Schedule and Liens resulting from the extension, renewal or
replacement of any such Liens in respect of the same property
theretofore subject to such Lien; provided that (i) no property shall
become subject to such extended, renewed or replacement Lien that was
not subject to the Lien extended, renewed or replaced, (ii) the
aggregate principal amount of Indebtedness secured by any such
extended, renewed or replacement Lien shall not be increased by such
extension, renewal or replacement, (iii) the Indebtedness secured by
such Lien shall be incurred in compliance with the applicable terms
hereof, including SECTION 8.2.3, and (iv) both immediately before and
after giving effect thereto, no Default shall exist;
(b) Liens for taxes, assessments or other
governmental charges or levies not at the time delinquent or
thereafter payable without penalty or being diligently contested in
good faith by appropriate proceedings and for which adequate reserves
in accordance with GAAP shall have been set aside on its books;
(c) Liens of carriers, warehousemen, mechanics,
materialmen and landlords incurred in the ordinary course of business
for sums not overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(d) Liens incurred in the ordinary course of business
in connection with workers' compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure
performance of statutory obligations, leases and contracts (other than
for borrowed money) entered into in the ordinary course of business or
to secure obligations on surety or appeal bonds;
(e) judgment Liens of an amount not exceeding at any
time either 7.25% of Consolidated Tangible Net Worth at the end of the
most recently ended Fiscal Period or $80,000,000, whichever is less,
in the aggregate, or with respect to which execution has been
71 CANADIAN CREDIT AGREEMENT
78
stayed or the payment of which is covered in full (subject to a
customary deductible) by insurance maintained with responsible
insurance companies and for which, within 30 days of such judgment,
the insurance carrier has acknowledged coverage in writing;
(f) Liens on property purchased or constructed after
the date hereof securing Indebtedness used to purchase or construct
such property; provided that (i) no such Lien shall be created in or
attach to any other asset at the time owned by Micro or any of its
Subsidiaries if the aggregate principal amount of the Indebtedness
secured by such property would exceed the fair market value of such
property and assets, taken as a whole, (ii) the aggregate outstanding
principal amount of Indebtedness secured by all such Liens shall not
at any time exceed 100% of the fair market value of such property at
the time of the purchase or construction thereof, and (iii) each such
Lien shall have been incurred within 270 days of the purchase or
completion of construction of such property;
(g) Liens resulting from utility easements, building
restrictions and such other encumbrances or charges against real
property as are of a nature generally existing with respect to
properties of a similar character and which do not in any material may
affect the marketability of the same or interfere with the use thereof
in the business of any Borrower or any of its Subsidiaries;
(h) Liens incurred in the normal course of business
in connection with Bankers' Acceptance financing or used in the
ordinary course of trade practices, statutory lessor and vendor
privilege liens and liens in connection with ad valorem taxes not yet
due, good faith bids, tenders and deposits;
(i) Liens on all goods held for sale on consignment;
(j) Liens granted by any Subsidiary of Micro in favor
of Micro or in favor of another Subsidiary of Micro that is the parent
of such Subsidiary granting the Lien, other than Liens granted by a
Guarantor to a Subsidiary of Micro that is not a Guarantor; provided
that no Person that is not a Subsidiary of Micro shall be secured by
or benefit from any such Lien;
(k) Liens of the nature referred to in CLAUSE (b) of
the definition of the term "LIEN" and granted to a purchaser or any
assignee of such purchaser which has financed the relevant purchase of
Trade Accounts Receivable of any Borrower or any of their respective
subsidiaries;
(l) Liens on accounts receivable of Micro Canada with
respect to any accounts receivable securitization program; and
(m) Additional Permitted Liens.
SECTION 8.2.3 FINANCIAL CONDITION. Micro will not permit any
of the following:
(a) the Consolidated Current Ratio as at the end of
any Fiscal Period to be less than 1.0 to 1.0;
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79
(b) the ratio of (i) Consolidated EBITDA for any
period of four consecutive Fiscal Periods to (ii) Consolidated
Interest Charges for such period to be less than 3.5 to 1.0;
(c) the ratio of (i) the average daily balances of
Consolidated Funded Debt during any Fiscal Period to (ii) Consolidated
EBITDA for the period of four Fiscal Periods ending on the last day of
such Fiscal Period to exceed 3.5 to 1.0; provided that, for purposes
of calculating this ratio, Consolidated Funded Debt on any day shall
be the amount otherwise determined pursuant to the definition thereof
plus the amount of Consolidated Transferred Receivables on such day;
or
(d) the Consolidated Tangible Net Worth as at the end
of any Fiscal Period to be less than the sum of (i) the greater of (A)
$500,000,000 and (B) an amount equal to 90% of Consolidated Tangible
Net Worth as at the end of the Fiscal Year ending nearest to December
31, 1996, plus (ii) as at the end of each Fiscal Year commencing with
the Fiscal Year ending closest to December 31, 1997, 67% of
Consolidated Net Income (without taking into account any losses
incurred in any Fiscal Year) since the beginning of the Fiscal Year
which began closest to December 31, 1996.
SECTION 8.2.4 DIVIDENDS. Except for dividends paid, or
redemptions made, in any calendar Year that do not exceed 50% of Consolidated
Net Income for the immediately preceding Fiscal Year, Micro will not declare or
pay any dividends (in cash, property, or obligations) or any other payments or
distributions on account of, or set apart money for a sinking or analogous fund
for, or purchase, redeem, retire or otherwise acquire for value, any shares of
its capital stock now or hereafter outstanding or any warrants, options or
other rights acquire the same; return any capital to its stockholders as such;
or make any distribution of assets to its stockholders as such; provided that
Micro may redeem, purchase, or acquire any of its capital stock (a) issued to
employees pursuant to any Plan or other contract or arrangement relating to
employment upon the termination of employment or other events or (b) in a
transaction contemplated by the Transition Agreements.
SECTION 8.2.5 MERGERS, CONSOLIDATIONS, SUBSTANTIAL ASSET SALES,
AND DISSOLUTIONS. No Borrower may merge or consolidate with another Person, or
sell, lease, transfer, or otherwise dispose of assets constituting all or
substantially all of the assets of Micro and its Consolidated Subsidiaries
(taken as a whole) to another Person, or liquidate or dissolve, except for the
following so long as, in each case, no Event of Default exists or would exist
after giving effect to the following:
(a) Micro Canada may merge or consolidate with
another Person if either (i) Micro Canada is the surviving entity or
(ii) the surviving Person (A) is organized and in good standing under
the laws of a Province of Canada and (B) expressly assumes Micro
Canada's Obligations in a written agreement satisfactory in form and
substance to the Required Lenders.
(b) Micro may merge or consolidate with another
Person if:
(i) either Micro is the surviving entity or the
surviving Person (A) is organized and in good standing under
the laws of a State of the United States and (B) expressly
assumes Micro's Obligations in a written agreement
satisfactory in form and substance to the Required Lenders;
and
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(ii) unless Micro is the surviving entity in a
merger or consolidation that does not constitute a Material
Asset Acquisition, Micro delivers to the Administrative Agent,
before the merger or consolidation becomes effective, a
certificate of Micro's chief executive officer, chief
financial officer, or Treasurer stating and demonstrating in
reasonable detail that (assuming such proposed transaction had
been consummated on the first day of the most recently ended
period of four Fiscal Periods for which financial statements
have been or are required to have been delivered pursuant to
SECTION 8.1.1) Micro (or the other surviving Person) would
have been, on a pro forma basis, in compliance with each of
the covenants set forth in SECTION 8.2.3 as of the last day of
such period.
SECTION 8.2.6 TRANSACTIONS WITH AFFILIATES. Except in the
ordinary course of business, no Borrower will (and no Borrower will permit any
of its Subsidiaries to), directly or indirectly, pay any funds to or for the
account of, make any investment (whether by acquisition of stock or
Indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any
Indebtedness, or otherwise) in, lease, sell, transfer, or otherwise dispose of
any assets, tangible or intangible, to, or participate in, or effect, any
transaction with, any Affiliate (any such payment, investment, lease, sale,
transfer, other disposition or transaction, an "AFFILIATE TRANSACTION") except
on an arms-length basis on terms at least as favorable to such Borrower (or
such Subsidiary) as terms that could have been obtained from a third party who
was not an Affiliate; provided that:
(a) the foregoing provisions of this section do not
prohibit (i) agreements with or for the benefit of employees of such
Borrower or any Subsidiaries regarding bridge home loans and other
loans necessitated by the relocation of such Borrower's or such
Subsidiary's business or employees, or regarding short-term hardship
advances, (ii) loans to officers or employees of such Borrower or any
of its Subsidiaries in connection with the exercise of rights under
such Borrower's stock option or stock purchase plan, (iii) any such
Person from declaring or paying any lawful dividend or other payment
ratably in respect of all of its capital stock of the relevant class
so long as, in the case of Micro, after giving effect thereto, no
Default shall have occurred and be continuing, (iv) any Affiliate
transaction between Micro and any of its Subsidiaries or between any
Subsidiaries of Micro, or (v) any Affiliate Transaction (other than
any Affiliate Transaction described in CLAUSES (I) through (IV)) in
which the amount involved does not exceed $50,000; and
(b) the Borrowers shall not, nor shall they permit
any of their respective Subsidiaries to, participate in effect any
Affiliate Transactions otherwise permitted pursuant to this section
which either individually or in the aggregate may involve obligations
that are reasonably likely to have a Material Adverse Effect.
The approval by the independent directors of the Board of Directors of the
relevant Borrower (or the relevant Subsidiary thereof) of any Affiliate
Transaction to which such or such Borrower (or the relevant Subsidiary thereof)
is a party shall create a rebuttable presumption that such Affiliate
Transaction is on an arms-length basis on terms at least as favorable to such
Borrower (or the relevant Subsidiary thereof) as terms that could have been
obtained from a third party who was not an Affiliate.
SECTION 8.2.7 LIMITATIONS ON ACQUISITIONS.
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(a) No Borrower may make any Material Asset
Acquisition unless (i) no Event of Default exists or would exist after
giving effect to the proposed Material Asset Acquisition, (ii) before
the consummation of the proposed Material Asset Acquisition, such
Borrower notifies the Administrative Agent that it intends to make the
proposed Material Asset Acquisition and reasonably believes that it
will be able to provide the certification under CLAUSE (iii) below,
and (iii) before consummation of the proposed Material Asset
Acquisition, Micro delivers to the Administrative Agent a certificate
duly executed and delivered by an Authorized Person of Micro,
certifying that (A) immediately upon and following the consummation of
the proposed Material Asset Acquisition, Micro will be in compliance
with each of SECTIONS 8.2.1 and 8.2.2 and (B) on a pro forma basis
(assuming the proposed Material Asset Acquisition had been consummated
on the first day of the most recently ended period of four Fiscal
Periods for which financial statements have been or are required to
have been delivered pursuant to SECTION 8.1.1) Micro would have been
in compliance with SECTION 8.2.3 as of the last day of such period.
(b) Without first providing the notice to the
Administrative Agent and the Lenders required by this SECTION
8.2.7(b), the Borrowers shall not (and shall not permit their
respective Subsidiaries to) acquire any outstanding stock of any U.S.
or non-U.S. corporation, limited company or similar entity of which
the shares constitute Margin Stock if after giving effect to such
acquisition, Micro and its Affiliates shall hold, in the aggregate,
more than 5% of the total outstanding stock of the issuer of such
Margin Stock, which notice shall include the name and jurisdiction of
organization of such relevant issuer, the market on which such stock
is traded, the total percentage of such relevant issuer's stock
currently held, and the purpose for which the acquisition is being
made.
(c) Notwithstanding any contrary provision in this
SECTION 8.2.7, the Borrowers shall not (and shall not permit their
respective Subsidiaries to) (i) directly or indirectly use the
proceeds of any Pro-Rata Credit Extensions to make any Acquisition
unless, if the board of directors of the Person to be acquired has
notified Micro or any of its Subsidiaries that it opposes the offer by
the proposed purchaser to acquire that Person, then that opposition
has been withdrawn, or (ii) make any Acquisition unless, if the
proposed Acquisition is structured as a merger or consolidation, then
it will be consummated in compliance with SECTION 8.2.5.
(d) Execution and delivery of each
Continuation/Conversion Notice shall constitute the relevant
Borrower's representation and warranty that the Borrowers are not then
in violation of SECTION 8.2.7(c)(i). Neither Borrower shall directly
or indirectly use the proceeds of any Non-Rata Credit Extension to
make any Acquisition if the board of directors of the Person to be
acquired has notified Micro or any of its Subsidiaries that it opposes
the offer by the proposed purchaser to acquire that Person, and such
opposition has not been withdrawn unless the relevant Borrower
notifies the relevant Lender of such opposition when it requests such
Non-Rata Credit Extension.
SECTION 8.2.8 LIMITATION ON SALE OF TRADE ACCOUNTS RECEIVABLE.
Notwithstanding anything to the contrary in this Agreement, no Borrower will
(and no Borrower will permit any of its Subsidiaries to) sell, assign, xxxxx x
Xxxx in, or otherwise transfer any interest in its Trade Accounts Receivable to
any Person if, after giving effect thereto, the ratio (expressed as a
percentage) of (a) Consolidated Transferred Receivables to (b) the sum of
Consolidated Retained Receivables plus Consolidated Transferred Receivables
shall exceed 40%.
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SECTION 8.2.9 SALE OF ASSETS. Except as provided in SECTION
8.2.5, no Obligor will (and no Obligor will permit any of its Subsidiaries to)
dispose of any property or assets other than in the ordinary course of
business, except that:
(a) Micro or any Subsidiary of Micro may dispose of
any of its assets so long as the proceeds thereof are either (i)
utilized to repay or prepay (in accordance with the provisions of
ARTICLE IV hereof) Pro-Rata Revolving Loans (provided that, in the
event the amount of such proceeds shall exceed the aggregate principal
amount of all Pro-Rata Revolving Loans outstanding hereunder at such
time, such excess proceeds may be utilized to repay or prepay (in
accordance with the provisions hereof) other loans outstanding at such
time) or (ii) so long as no Event of Default has occurred and is
continuing or would occur after giving effect thereto, reinvested in
one or more of the businesses in which Micro or any of its
Subsidiaries is principally engaged in accordance with SECTION 8.2.10
hereof;
(b) Micro or any Subsidiary of Micro may dispose of
assets which are worn out, obsolete or surplus or otherwise have no
further useful life to Micro or any of its Subsidiaries; and
(c) so long as no Default has occurred and is
continuing or would occur after giving effect thereto, Micro and any
Subsidiary of Micro may dispose of assets in transactions exclusively
among Micro and any of its Subsidiaries or among Subsidiaries of Micro
that satisfy the requirements of SECTION 8.2.6; provided that:
(i) notwithstanding any provision hereof to the
contrary, in the event that, immediately after giving effect
to any disposition described in this CLAUSE (C) to a
Subsidiary of Micro, such Subsidiary shall own assets
constituting at least 10% of Consolidated Assets determined as
of the last day of the most recently completed Fiscal Period,
such Subsidiary of Micro shall be deemed a Material Subsidiary
for all purposes hereunder as of the date of such disposition
and Micro shall cause any such Material Subsidiary promptly to
execute and deliver an Additional Guaranty in favor of the
Lender Parties in accordance with SECTION 8.1.10; and
(ii) notwithstanding the foregoing, so long as
no Event of Default has occurred and is continuing or would
occur after giving effect thereto, (A) any Subsidiary of Micro
which is not at the time of such disposition an Obligor may
dispose of assets in transactions exclusively with (1) Micro,
(2) any Subsidiary of Micro which, at the time of such
disposition, is an Obligor, and (3) any other Subsidiary of
Micro which is not at the time of such disposition an Obligor,
unless, immediately after giving effect to such disposition,
such other Subsidiary of Micro would become a Material
Subsidiary and such other Subsidiary does not, promptly after
such disposition, execute an Additional Guaranty in accordance
with SECTION 8.1.10, and (B) Micro or any Subsidiary of Micro
which is at the time of such Disposition also an Obligor may
Dispose of assets in transactions exclusively with (1) Micro
and (2) any other Subsidiary of Micro which, at the time of
such disposition, is also an Obligor.
For purposes of this SECTION 8.2.9 "DISPOSE" means sell, lease, transfer, or
otherwise dispose of property but shall not include any public taking or
condemnation, and "DISPOSITION" and "DISPOSED OF" have
76 CANADIAN CREDIT AGREEMENT
83
corresponding meanings to dispose. Such terms shall not include an exchange of
assets if the assets involved in such exchange are similar in function in after
giving effect to such exchange there has not been (i) a Material Adverse
Effect, (ii) any material deterioration of cash flow generation from or in
connection with such assets, or (iii) any material deterioration in the overall
quality of plant, property, and equipment of any Obligor. An "EXCHANGE" shall
be deemed to have occurred for purposes hereof if each of the transactions
involved shall have been consummated within a six month period.
SECTION 8.2.10 LIMITATION ON BUSINESSES. Micro and its
Subsidiaries, considered as a whole, will not engage principally in businesses
other than those conducted by Micro and its Subsidiaries on the date hereof, as
described in the Preamble of this Agreement.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1 LISTING OF EVENTS OF DEFAULT. Any of the
following events or occurrences described in this SECTION 9.1 shall constitute
an "EVENT OF DEFAULT".
SECTION 9.1.1 NON-PAYMENT OF OBLIGATIONS. A default shall
occur in the payment or prepayment when due (a) by any Borrower of any
principal of any Loan, (b) by any Borrower of any interest on any Loan, (c) by
any Borrower of any Reimbursement Obligation or any deposit of cash for
collateral purposes pursuant to SECTION 3.2.2 or 3.2.4, (d) by any Borrower in
respect of any Bankers' Acceptance, or (e) by any Guarantor of any Guaranteed
Obligation (as defined in such Guarantor's Guaranty), and, in the case of
CLAUSES (b) or (e), such default shall continue unremedied for a period of five
Business Days.
SECTION 9.1.2 BREACH OF WARRANTY. Any representation or
warranty of any Obligor made or deemed to be made hereunder or in any other
Loan Document executed by it or in any other writing or certificate furnished
by or on behalf of any Obligor to the Administrative Agent or any Lender for
the purposes of or in connection with this Agreement or any such other Loan
Document (including any certificates delivered pursuant to ARTICLE VI) is or
shall be incorrect when made in any material respect.
SECTION 9.1.3 NON-PERFORMANCE OF CERTAIN COVENANTS AND
OBLIGATIONS. Any Obligor shall default in the due performance and observation
of any of its obligations under SECTION 8.2.2 (excluding the involuntary
incurrence of Liens involving individually or collectively amounts in
controversy or encumbered assets or both having a value of less than
$60,000,000 at any time, which involuntary incurrences are subject to SECTION
9.1.4 below), SECTION 8.2.3, SECTION 8.2.4, or SECTION 8.2.5 (excluding any
default by Micro in the performance of its obligation to deliver, prior to the
consummation of any Material Asset Acquisition, the certificate required to be
so delivered in connection therewith pursuant to SECTION 8.2.7(A)(III), default
of which is subject to SECTION 9.1.4 below).
SECTION 9.1.4 NON-PERFORMANCE OF OTHER COVENANTS AND
OBLIGATIONS. Any Obligor shall default in the payment when due of any fee or
any other Obligation not subject to SECTION 9.1.1, or the due performance and
observance of any other covenant, agreement or obligation contained herein or
in any other Loan Document, and such default shall continue unremedied for a
period of 30 days after Micro obtains actual knowledge thereof or notice
thereof shall have been given to Micro by the
77 CANADIAN CREDIT AGREEMENT
84
Administrative Agent or any Lender.
SECTION 9.1.5 DEFAULT ON INDEBTEDNESS. A default shall occur
in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness arising under the U.S. Credit
Agreement or the European Credit Agreement or any other Indebtedness of any
Obligor or any of its Subsidiaries (other than Indebtedness described in
SECTION 9.1.1 or Indebtedness which is non- recourse to any Obligor or any
Subsidiary of any Obligor) having an outstanding aggregate principal amount in
excess of the lesser of (a) (i) 5% Consolidated Tangible Net Worth for the then
most recently ended Fiscal Period individually, or (ii) 10% of Consolidated
Tangible Net Worth for the then most recently ended Fiscal Period in the
aggregate and (b) $75,000,000 (or the equivalent thereof in any other
currency), or a default shall occur in the performance or observance of any
obligation or condition with respect to such Indebtedness if the effect of such
default is to cause, or (with the giving of any notice or lapse of time or
both) to permit the holder or holders of such Indebtedness, or any trustee or
agent for such holders to cause, the maturity of any such Indebtedness to be
accelerated or such Indebtedness to be prepaid, redeemed, purchased, defeased
or otherwise to become due and payable prior to its expressed maturity.
SECTION 9.1.6 JUDGMENTS. Any judgment or order for the payment
of money in excess of (individually or in the aggregate) an amount equal at any
time to either 7.25% of Consolidated Tangible Net Worth at the end of the most
recently ended Fiscal Period or $80,000,000, whichever is less (or, in either
case, the equivalent thereof in any other currency), shall be rendered against
any Obligor or any of their respective Subsidiaries and either:
(a) enforcement proceedings shall have been commenced
and be continuing by any creditor upon such judgment or order for any
period of 30 consecutive days; or
(b) there shall be any period during which a stay of
enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect.
SECTION 9.1.7 PENSION PLANS. Any of the following events shall
occur with respect to any Pension Plan:
(a) the institution of any steps by any Obligor, any
member of its Controlled Group or any other Person to terminate a
Pension Plan if, as a result of such termination, any such Obligor or
any such member could be required to make a contribution in excess of
$60,000,000 (or the equivalent thereof in any other currency), to such
Pension Plan, or could reasonably expect to incur a liability or
obligation in excess of $60,000,000 (or the equivalent thereof in any
other currency), to such Pension Plan; or
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA.
SECTION 9.1.8 OWNERSHIP; BOARD OF DIRECTORS. Any Person or two
or more Persons (excluding the Family Stockholders (as defined in the Board
Representation Agreement)) 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, as amended (or any
successor regulation)) of capital stock of Micro having more than 25% of the
ordinary voting power of all capital
78 CANADIAN CREDIT AGREEMENT
85
stock of Micro then outstanding; and at any time during any period of 25
consecutive calendar months commencing on or after the date of this Agreement,
a majority of Board of Directors of Micro shall no longer be composed of
individuals (i) who were members such Board of Directors on the first day of
such period, (ii) whose election or nomination to such Board of Directors was
approved by individuals referred to in CLAUSE (i) above constituting the time
of such election or nomination at least a majority of such Board of Directors
or (iii) whose election or nomination to such Board of Directors was approved
by individuals referred to in CLAUSES (i) and (ii) above constituting at the
time of such election or nomination at least a majority of such Board of
Directors.
SECTION 9.1.9 BANKRUPTCY, INSOLVENCY, ETC. Any Obligor or any
Material Subsidiary shall:
(a) become insolvent or generally fail to pay, or
admit in writing its inability to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, receiver manager, administrative
receiver, sequestrator, liquidator or other custodian for it, its
property, or make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
administrative receiver, receiver manager, receiver, sequestrator,
liquidator or other custodian for it or for a substantial part of its
property, and such trustee, receiver, receiver manager, sequestrator,
liquidator or other custodian shall not be discharged within 60 days,
provided that each Obligor and each Material Subsidiary hereby
expressly authorizes each Lender Party to appear in any court
conducting any relevant proceedings during such 60-day period to
preserve, protect and defend its rights under this Agreement and the
other Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement, petition, proposal or
other case or proceeding under any bankruptcy or insolvency law
including the Companies Creditors Arrangement Act (Canada), or any
dissolution, winding up or liquidation proceeding, in respect of any
Obligor or any Material Subsidiary thereof, as the case may be, and,
if any such petition, case or proceeding is not commenced by such
Person, such petition, case or proceeding shall be consented to or
acquiesced in by such Obligor or Material Subsidiary, as the case may
be, or shall result in the entry of an order for relief or shall
remain for 60 days unstayed or undismissed, provided that each Obligor
and each Material Subsidiary hereby expressly authorizes each Lender
Party to appear in any court conducting any such petition, case or
proceeding during such 60-day period to preserve, protect and defend
its rights under this Agreement and the other Loan Documents; or
(e) take any action authorizing, or in furtherance
of, any of the foregoing.
SECTION 9.1.10 GUARANTIES. Any of the Guaranties or any
provisions thereof shall be found or held invalid or unenforceable by a court
of competent jurisdiction or shall have ceased to be effective because of the
merger, dissolution or liquidation of a Guarantor (other than as may result
from a transaction permitted pursuant to SECTION 8.2.5 hereof or by reason of a
merger of Guarantor under one Guaranty into the Guarantor under another
Guaranty) or any Guarantor shall have repudiated its
79 CANADIAN CREDIT AGREEMENT
86
obligations under a Guaranty.
SECTION 9.2 ACTION IF BANKRUPTCY. If any Event of Default
described in SECTION 9.1.9 shall occur, the Commitments (if not theretofore
terminated) shall automatically terminate and the outstanding principal amount
of all outstanding Loans and all other Obligations shall automatically be and
become immediately due and payable, without notice or demand.
SECTION 9.3 ACTION IF OTHER EVENT OF DEFAULT. If any Event
of Default (other than any Event of Default described in SECTION 9.1.9) shall
occur for any reason, whether voluntary or involuntary, and be continuing, the
Administrative Agent, upon the direction of the Required Lenders, shall by
notice to Micro declare all or any portion of the outstanding principal amount
of the Loans and all other Obligations to be due and payable and/or the
Commitments to be terminated, whereupon the full unpaid amount of the Loans and
all other Obligations which shall be so declared due and payable shall be and
become immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Commitments shall terminate.
SECTION 9.4 ACTION BY WITHDRAWING LENDER. If an Event of
Default shall occur because the Borrowers have failed to pay in full a
Withdrawing Lender, for any reason, voluntary or involuntary, the Withdrawing
Lender may by notice to Micro declare all or any portion of the outstanding
principal amount of the Loans made by such Withdrawing Lender and all other
obligations owed to such Withdrawing Lender to be due and payable and/or its
commitment to be terminated, whereupon the full unpaid amount of such Loans and
all such other Obligations which shall be so declared due and payable shall be
and become immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, its Commitment shall terminate.
SECTION 9.5 CASH COLLATERAL. If any Event of Default shall
occur for any reason, whether voluntary or involuntary, and shall not have been
cured or waived and shall be continuing and the Obligations are or have been
declared due and payable under SECTION 9.2 or 9.3, the Administrative Agent may
apply any cash collateral held by the Administrative Agent pursuant of SECTION
3.2.4 to the payment of the Obligations in any order in which the Required
Lenders may elect.
ARTICLE X
THE ADMINISTRATIVE AGENT AND
THE SYNDICATION AGENT
SECTION 10.1 AUTHORIZATION AND ACTIONS. Each Lender hereby
appoints Scotiabank the Administrative Agent and Royal Bank the Syndication
Agent under, and for the purposes set forth in, this Agreement and each other
Loan Document. Each Lender authorizes each Agent to act on behalf of such
Lender under this Agreement and each other Loan Document and in the absence of
other written instructions from the Required Lenders received from time to time
by the Agents (with respect to which each Agent agrees that it will comply,
except as otherwise provided in this SECTION 10.1 or as otherwise advised by
counsel), to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Agents by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto. Each Lender
hereby indemnifies (which indemnity shall survive any termination of this
agreement) each Agent from and against such Lender's Percentage of any and all
liabilities,
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87
obligations, losses, damages, claims, costs or expenses of any kind or nature
whatsoever which at any time be imposed on, incurred by, or asserted against,
each such Agent in any way relating to or arising out of this Agreement or any
other Loan Document (including any such liability, etc. incurred as a result of
each Agent's reliance on any information contained in any Quarterly Report or
update with respect thereto), including reasonable attorneys' fees, and as to
which either Agent is not reimbursed by Micro or the other Obligors, provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted solely from either Agent's gross negligence or willful misconduct. No
Agent shall be required to take any action hereunder or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement or
any other Loan Document, unless it is indemnified hereunder to its
satisfaction. If any indemnity in favor of either Agent shall be or become, in
either Agent's determination, inadequate, such Agent may call additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 10.2 FUNDING RELIANCE, ETC. Unless the Administrative
Agent shall have been notified by telephone, confirmed in writing, by any
Lender by 5:00 p.m., Toronto time, on the Business Day prior to the making of a
Pro-Rata Revolving Loan that such Lender will not make available an amount
which would constitute its Adjusted Percentage of such requested Pro-Rata
Revolving Loan on the date specified therefor, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent and, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. If and to the extent that such Lender shall
not have such amount available to the Administrative Agent, such Lender and the
relevant Borrower severally agree to pay the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date the Administrative Agent made such amount available to the
relevant Borrower to the date such amount is repaid to the Administrative Agent
at an annual interest rate equal to the U.S. Base Rate (for amounts
denominated in Dollars) or the Canadian Prime Rate (for amounts denominated in
Canadian Dollars) for the first day that the Administrative Agent made such
amounts available and thereafter at a rate of interest equal to the interest
rate applicable at the time to the requested Pro-Rata Revolving Loan.
SECTION 10.3 EXCULPATION. Neither Agent nor any of their
respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it under this Agreement
or any other Loan Document, or in connection herewith or therewith, except for
its own willful misconduct or gross negligence, nor be responsible for any
recitals or warranties herein or therein, nor for the effectiveness,
enforceability, validity or due execution of this Agreement or any other Loan
Document, nor to make any inquiry respecting the performance by any Obligor of
its obligations hereunder or under any other Loan Document. Any such inquiry
which may be made by either Agent shall not obligate it to make any further
inquiry to take any action. Each Agent shall be entitled to rely upon advice
of counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which each such Agent believes to be genuine and to have
been presented by a proper Person.
SECTION 10.4 SUCCESSOR. Either Agent may resign as such at
any time upon at least 30 days' prior notice to Micro and all the Lenders. If
either Agent shall at any time resign, the Required Lenders, after
consultations with Micro, may appoint another Lender as a successor
Administrative Agent or Syndication Agent, as the case may be, whereupon such
Lender shall become an Administrative Agent or
81 CANADIAN CREDIT AGREEMENT
88
Syndication Agent hereunder, as the case may be. If no successor
Administrative Agent or Syndication Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's or Syndication Agent's giving notice
of resignation, then the retiring Administrative Agent or Syndication Agent
may, on behalf of the Lenders, after consultations with Micro, appoint a
successor Administrative Agent or Syndication Agent, as the case may be which
shall be one of the Lenders or a Schedule I Canadian chartered bank. Upon
acceptance of any appointment as Administrative Agent or Syndication Agent
hereunder, the case may be, by a successor Administrative Agent or Syndication
Agent, as the case may be, such successor Administrative Agent or Syndication
Agent shall be entitled to receive from the retiring Administrative Agent or
Syndication Agent such documents of transfer and assignment as such successor
Administrative Agent or Syndication Agent may reasonably request, and shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Administrative Agent or Syndication Agent, as the case
may be, and the retiring Administrative Agent or Syndication Agent shall be
discharged from its duties and obligations under this Agreement. No
resignation or removal of either the Administrative Agent or the Syndication
Agent pursuant to this SECTION 10.4 shall be effective until the appointment of
a successor Administrative Agent or Syndication Agent, as the case may be, has
become effective. After any retiring Administrative Agent's or Syndication
Agent's resignation hereunder as an Administrative Agent or Syndication Agent,
as the case may be, the provisions of:
(a) this ARTICLE X shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the
Administrative Agent or Syndication Agent under this Agreement; and
(b) SECTIONS 11.3 and 11.4 shall continue to inure to
its benefit.
SECTION 10.5 CREDIT EXTENSIONS BY AGENTS. Each Agent shall
each have the same rights and powers with respect to the Credit Extensions made
by it or any of its Affiliates in its capacity as a Lender and may exercise the
same as if it were not an Agent hereunder. Each Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with any Obligor or Subsidiary of any thereof as if it were not an
Agent hereunder.
SECTION 10.6 CREDIT DECISIONS. Each Lender acknowledges that
it has, independently of the Agents and each other Lender, and based on such
Lender's review of the financial information of each Obligor, this Agreement,
the other Loan Documents (the terms and provisions of which being satisfactory
to such Lender) and such other documents, information and investigations as
such Lender has deemed appropriate, made its own credit decision to make
available its Commitment and to make available any Non-Rata Credit Extensions.
Each Lender also acknowledges that it will, independently of the Agents and
each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.
SECTION 10.7 COPIES, ETC. The Administrative Agent shall give
prompt notice to each Lender of each notice or request required or permitted to
be given to the Administrative Agent by any Obligor pursuant to the terms of
this Agreement or any other Loan Document (unless concurrently delivered to the
Lenders by such Obligor). The Administrative Agent will distribute to each
Lender each document or instrument received for its account, and copies of all
other communications received by the Administrative Agent from any Obligor, for
distribution to the Lenders by the Administrative Agent in
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89
accordance with the terms of this Agreement or any other Loan Document.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 WAIVERS, AMENDMENTS, ETC. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by each Borrower and the Required Lenders; provided, however, that
no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any
particular action be taken by all the Lenders or by the Required
Lenders shall be effective unless consented to by each Lender;
(b) modify this SECTION 11.1, change the definitions
of Adjusted Percentage, Percentage, or Required Lenders, increase the
Total Credit Commitment Amount or the Credit Commitment Amount,
Percentage, or Adjusted Percentage of any Lender, extend the
Commitment Termination Date, or, subject to SECTION 8.2.5, release any
Guarantor from any of its payment obligations under the Guaranty
entered into by it, shall be made without the consent of each Lender;
(c) extend the due date for, or reduce the amount of,
any scheduled repayment or prepayment of principal of or interest on
any Pro-Rata Credit Extension or the amount of any fee payable under
SECTION 4.3 shall be made without the consent of each Lender;
(d) affect adversely the interests, rights or
obligations of the Administrative Agent in its capacity as
Administrative Agent shall be made without the consent of the
Administrative Agent; or
(e) affect adversely the interests, rights or
obligations of the Syndication Agent in its capacity as the
Syndication Agent shall be made without the consent of the Syndication
Agent.
No failure or delay on the part of any Lender Party in exercising any power or
right under this Agreement or any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other
power or right. No notice to or demand on any Obligor in any case shall
entitle it to any notice or demand in similar or other circumstances. No
waiver or approval by any Lender Party under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval,
be applicable to subsequent transactions. No waiver approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 11.2 NOTICES. Unless otherwise specified to the
contrary, all notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing or by
facsimile and addressed, delivered, or transmitted to such party at its address
or facsimile number set forth below its signature hereto or at such other
address or facsimile number as may be
83 CANADIAN CREDIT AGREEMENT
90
designated by such party in a notice to the other parties. All notices, if
properly addressed and sent by paid courier service, shall be deemed given when
received. All notices if transmitted by facsimile shall be deemed given when
transmitted and the appropriate receipt for transmission received by the sender
thereof.
SECTION 11.3 PAYMENT OF COSTS AND EXPENSES. Micro agrees to
pay on demand all reasonable expenses (inclusive of value added tax or any
other similar tax imposed thereon) of the Agents (including the reasonable fees
and out-of-pocket expenses of the single counsel to the Agents and of local
counsel, if any, who may be retained by such counsel to the Agents) in
connection with the negotiation, preparation, execution, and delivery of this
Agreement and of each other Loan Document (including schedules, exhibits, and
forms of any document or instrument relevant to this Agreement or any other
Loan Document), and any amendments, waivers, consents, supplements, or other
modifications to this Agreement or any other Loan Document as from time to time
may hereafter be required, whether or not the transactions contemplated hereby
are consummated.
Micro further agrees to pay, and to save the Lender Parties harmless
from all liability for, stamp or other taxes (including, without limitation,
any registration duty imposed by Belgian law) which may be payable in
connection with the execution, delivery or enforcement of this Agreement or any
other Loan Document, and in connection with the making of any Credit Extensions
and the issuing of any Letters of Credit hereunder. Micro also agrees to
reimburse Lender Party upon demand for all out-of-pocket expenses (inclusive of
value added tax or other similar tax imposed thereon and including attorneys'
fees and legal expenses (including actual cost to such Lender Party of its
in-house counsel) on a full indemnity basis) incurred by each such Lender Party
in connection with (x) the negotiation of any restructuring or "work- out,"
whether or not consummated, of any Obligations and (y) the enforcement of any
obligations, provided that Micro shall reimburse each Lender Party for the fees
and legal expenses of only one counsel for such Lender Party.
SECTION 11.4 INDEMNIFICATION. In consideration of the
execution and delivery of this Agreement by each Lender Party and the extension
of the Commitments, the Obligors hereby jointly and severally indemnify,
exonerate and hold each Lender Party and each of their respective officers,
directors, employees and agents (collectively, the "INDEMNIFIED PARTIES") free
and harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses incurred in connection
therewith (irrespective of whether any such Indemnified Party is a party to the
action for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements, which shall include the actual cost to such
Indemnified Party of its in-house counsel but shall not include the fees and
expenses of more than one counsel to such Indemnified Party (collectively, the
"INDEMNIFIED LIABILITIES"), incurred by Indemnified Parties or any of them as a
result of, or arising out of, or relating to:
(a) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of any
Credit Extension;
(b) the entering into and performance of this
Agreement and any other Loan Document by any of the Indemnified
Parties (excluding, however, any action successfully brought by or on
behalf of Micro or any other Borrower with respect to any
determination by any Lender not to fund any Credit Extension or not to
comply with SECTION 11.15 of this Agreement or any action by the
Required Lenders to terminate or reduce the Commitments or accelerate
the
84 CANADIAN CREDIT AGREEMENT
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Loans in violation of the terms of this Agreement);
(c) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by any Obligor, or
any of their respective Subsidiaries of all or any portion of the
stock or assets of any Person, whether or not any Indemnified Party is
party thereto;
(d) any investigation, litigation, or proceeding
related to any environmental cleanup, audit, compliance, or other
matter relating to the protection of the environment or the Release by
any Obligor (or any of their respective Subsidiaries) of any Hazardous
Material; or
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging, or releases from,
any real property owned or operated by any Obligor (or any of their
respective Subsidiaries) of any Hazardous Material (including any
losses, liabilities, damages, injuries, costs, expenses, or claims
asserted or arising under any Environmental Law), regardless of
whether caused by, or within the control of, such Person;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or willful misconduct. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Obligors hereby
jointly and severally agree to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
SECTION 11.5 SURVIVAL. The obligations of Micro and each
other Obligor under SECTIONS 5.3, 5.4, 5.5, 5.7, 11.3, and 11.4, and the
obligations of the Lenders under SECTIONS 10.1 and 11.15, shall in each case
survive any termination of this Agreement, the payment in full of Obligations,
and the termination of the Commitments. The representations and warranties
made by Micro and each other Obligor in this Agreement and in each other Loan
Document shall survive the execution and delivery of this Agreement and each
such other Loan Document.
SECTION 11.6 SEVERABILITY. Any provision of this Agreement or
any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Loan Document or affecting the
validity or enforceability of such provision in any other jurisdictions.
SECTION 11.7 HEADINGS. The various headings of this Agreement
and of each other Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
SECTION 11.8 EXECUTION IN COUNTERPARTS, EFFECTIVENESS; ENTIRE
AGREEMENT. This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and all of which
shall constitute together but one and the same Agreement. This Agreement shall
become effective on the date when the Administrative Agent has (a) received (i)
counterparts hereof executed on behalf of the Borrowers, the Agents, and each
Lender or (ii) facsimile, telegraphic, or other written confirmation (in form
and substance satisfactory to the Administrative Agent, who may rely upon the
advice of its special counsel in making that determination) of such execution
and (b) so notified the Borrowers and the Lenders; provided that no Lender
shall have any
85 CANADIAN CREDIT AGREEMENT
92
obligation to make the initial Credit Extension until the date (the "EFFECTIVE
DATE") that the applicable conditions set forth in SECTIONS 6.1 and 6.2 have
been satisfied as provided herein. This Agreement and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof and supersede any prior agreements, written or oral,
with respect thereto.
SECTION 11.9 GOVERNING LAW; SUBMISSION TO JURISDICTION.
Unless otherwise provided in any particular Loan Document, this Agreement and
each other Loan Document shall each be deemed to be a contract made under in,
and governed by the laws of, the Province of Ontario, Canada. Any litigation
based hereon, or arising out of, under or in connection with, this Agreement or
any other Loan Document, or any course of conduct, course of dealing,
statements (whether oral or written) or sections, of the Agents, Lenders,
Micro, or any other Obligor shall be brought and maintained exclusively in the
courts of the Province of Ontario, Canada. Micro and each other Obligor hereby
expressly and irrevocably submits to the jurisdiction of the courts of the
Province of Ontario, Canada, to the fullest extent permitted by applicable law,
for the purpose of any such litigation as set forth above, and irrevocably
consents to the service of any and all process in such litigation by the
mailing of copies of such process such Obligor at its address for notices
specified pursuant to Section 11.2, in each such case marked for the attention
of general counsel, Xxxxxx Micro Inc., or by personal service within or without
the Province of Ontario, Canada in a manner permitted by the laws of the
Province of Ontario, Canada. Micro and each other Obligor hereby expressly and
irrevocably waives, to the fullest extent permitted under applicable law, any
objection which it may have or hereafter may have to the laying of venue of any
such litigation brought in any such court referred to above and any claim that
any such litigation has been brought in an inconvenient forum. To the extent
that Micro or any other Obligor has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution or
otherwise) with respect to itself or its property, each such Obligor hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement and the other Loan Documents (other than the Coordination Center
Guaranty).
SECTION 11.10 SUCCESSORS AND ASSIGNS. This Agreement and each
other Loan Document shall be binding upon and shall inure to the benefit of the
parties hereto and thereto and their respective successors and assigns;
provided that:
(a) no Obligor may assign or transfer its rights or
obligations hereunder or under any other Loan Document without the
prior written consent of all the Lender Parties;
(b) the rights of sale, assignment and transfer of
the Lenders are subject to SECTION 11.11; and
(c) the rights of the Administrative Agent and the
Syndication Agent with respect to resignation or removal are subject
to SECTION 10.4.
SECTION 11.11 ASSIGNMENTS AND TRANSFERS OF INTERESTS. No
Lender may assign or sell participation interests in its Commitment or any of
its Credit Extensions or any portion thereof any Persons except in accordance
with this SECTION 11.11.
SECTION 11.11.1 ASSIGNMENTS. Any attempted assignment or transfer
by a Lender of its Credit Extensions and Commitment not made in accordance with
this SECTION 11.11.1 shall be null and void.
86 CANADIAN CREDIT AGREEMENT
93
(a) Any Lender may at any time assign or transfer to
one or more Eligible Assignees, to any of its Affiliates, to any other
Lender, or to any Federal Reserve Bank (each Person described in any
of the foregoing clauses as being the Person to whom such assignment
or transfer is available to be made, being hereinafter referred to as
a "TRANSFEREE LENDER") all or any part of such Lender's total Credit
Extensions and Commitment (which assignment or transfer shall be of a
constant, and not a varying, percentage of all the assigning Lender's
Credit Extensions and Commitment) in a minimum aggregate amount equal
to the least of (i) the entire amount of such Lender's total Credit
Extensions and Commitment, (ii) $10,000,000, or (iii) $5,000,000 so
long as the assignor Lender and each Transferee Lender to whom it is
concurrently making an assignment or transfer will, immediately after
the effectiveness of such concurrent assignments and transfers, hold
Commitments of at least $10,000,000 each.
(b) Notwithstanding CLAUSE (a) above, each Obligor
and Agent shall be entitled to continue to deal solely directly with
such Lender in connection with the interests so assigned or
transferred to a Transferee Lender unless and until (i) notice of such
assignment or transfer, together with payment instructions, addresses,
and related information with respect to such Transferee Lender, shall
have been given to Micro and each Agent by such Lender and such
Transferee Lender, (ii) such Transferee Lender shall have executed and
delivered to Micro and each Agent, a Lender Assignment Agreement, and
(iii) the Transferee Lender shall have paid a $1,000 processing fee to
the Administrative Agent.
(c) From and after the effective date of such Lender
Assignment Agreement (i) the Transferee Lender thereunder shall be
deemed automatically to have become a party to this Agreement and (to
the extent rights and obligations under this Agreement have been
assigned and transferred to such Transferee Lender in connection with
such Lender Assignment Agreement) shall have the rights and
obligations of a Lender under this Agreement and the other Loan
Documents, and (ii) the assignor Lender (to the extent that rights and
obligations under this Agreement have been assigned and transferred by
it in connection with such Lender Assignment Agreement) shall be
released from its obligations under this Agreement and the other Loan
Documents.
(d) Accrued interest and accrued fees shall be paid
in respect of assigned and retained Credit Extensions and Commitments
at the same time or times provided in this Agreement, notwithstanding
any such assignments or transfers.
SECTION 11.11.2 PARTICIPATIONS. Any Lender may at any time sell
to one or more commercial banks or other Persons (each of such Canadian
chartered banks and other Persons being herein called a "PARTICIPANT")
participating interests in any of its Credit Extensions and Commitments
hereunder; provided that:
(a) no participation contemplated in this SECTION
11.11.2 shall relieve such Lender from its Commitments or its other
obligations hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for
the performance of its Commitments and such other obligations;
87 CANADIAN CREDIT AGREEMENT
94
(c) each Borrower and each other Obligor and the
Agents shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and each other Loan Document;
(d) no Participant, unless such Participant is an
Affiliate of such Lender or is itself a Lender, shall be entitled to
require such Lender to take or refrain from taking any action
hereunder or under any other Loan Document, except that such Lender
may agree with any Participant that such Lender will not, without such
Participant's consent, take any actions of the type described in
CLAUSE (a), (b) or CLAUSE (c) of SECTION 11.1; and
(e) no Borrower shall be required to pay any amount
under this Agreement that is greater than the amount which it would
have been required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
SECTIONS 5.3, 5.4, 5.5, 5.7, 5.9, 5.10, 11.3, and 11.4, shall be considered a
Lender.
SECTION 11.12 OTHER TRANSACTIONS. Nothing contained herein
shall preclude any Lender Party from engaging in any transaction, in addition
to those contemplated by this Agreement or any other Loan Document, with any
Obligor or any of its Affiliates in which such Obligor or such Affiliate is not
restricted hereby from engaging with any other Person.
SECTION 11.13 FURTHER ASSURANCES. Each Obligor agrees to do
such further acts and things and to execute and deliver to each Lender Party
such additional assignments, agreements, powers, and instruments, as such
Lender Party may reasonably require or deem advisable to carry into effect the
purposes of this Agreement or any other Loan Document or to better assure and
confirm unto such Lender Party its rights, powers and remedies hereunder and
thereunder.
SECTION 11.14 CONFIDENTIALITY. Each of the Lender Parties
hereby severally agrees with each Borrower that it will keep confidential all
information delivered to such Lender Party or on behalf of each Borrower or any
of their respective Subsidiaries which information is known by such Lender
Party to be proprietary in nature, concerns the terms and conditions of this
Agreement or any other Loan Document, or is clearly marked or labeled or
otherwise adequately identified when received by such Lender Party as being
confidential information (all such information, collectively for purposes of
this section, "CONFIDENTIAL INFORMATION"); provided that each Lender Party
shall be permitted to deliver or disclose "confidential information": (a) to
directors, officers, employees, and affiliates; (b) to authorized agents,
attorneys, auditors and other professional advisors retained by such Lender
Party that have been apprised of such Lender Party's obligation under this
SECTION 11.15 and have agreed to hold confidential the foregoing information
substantially in accordance with the terms of this section, (c) in connection
with the prospective assignment or transfer of all or any part of, or the sale
of a participating interest in, such Lender Party's Credit Extensions and
Commitment, to any prospective Transferee Lender or Participant that has been
apprised of such Lender Party's obligation under this SECTION 11.15 has agreed
to hold confidential the foregoing information in accordance with the terms of
this section; (d) to any federal or state or provincial regulatory authority
having jurisdiction over such Lender Party; or (e) to any other Person to which
such delivery or disclosure may be necessary or appropriate (i) to effect
compliance with any law, rule, regulation or order applicable to such Lender
Party, (ii) in response to any
88 CANADIAN CREDIT AGREEMENT
95
subpoena or other legal process (provided, that the relevant Borrower shall be
given notice of any such subpoena or other legal process as soon as possible in
any event prior to production (unless provision of any such notice would result
in a violation of any such subpoena or other legal process), and the Lender
Party receiving such subpoena or other legal process shall cooperate with such
Borrower, at such Borrower's expense, seeking a protective order to prevent or
limit such disclosure), or (iii) in connection with any litigation to which
such Lender Party is a party.
For purposes hereof, the term "CONFIDENTIAL INFORMATION" does not
include any information that: (A) was publicly known or otherwise known by any
Lender Party on a non-confidential basis from a source other than the relevant
Borrower prior to the time such information is delivered or disclosed to such
Lender Party by the relevant Borrower; (B) subsequently becomes publicly known
through no act or omission by any Lender Party or any Person acting on behalf
of any Lender Party; (C) otherwise becomes known to a Lender Party other than
through disclosure by the relevant Borrower (or any Subsidiary thereof) or
through someone subject, to such Lender Party's knowledge, to a duty of
confidentiality to the relevant Borrower; or (D) constitutes financial
statements that are otherwise publicly available.
SECTION 11.15 RELEASE OF GUARANTORS.
(a) If (i) the Agents receive a certificate from the
chief executive officer, the chief financial officer, or Treasurer of
Micro certifying as of the date of that certificate that, after the
consummation of the transaction or series of transactions described in
such certificate (which certification shall also state that such
transactions, individually and in the aggregate, will be in compliance
with the terms and conditions of this Agreement, including, to the
extent applicable, the covenants contained in SECTIONS 8.2.5, 8.2.6,
and 8.2.9, and that no Default existed, exists, or will exist, as the
case may be, immediately before, as a result of, or after giving
effect to such transaction or transactions and the release described
below), the Guarantor (who may not be a Borrower) identified in such
certificate will no longer be a Subsidiary of Micro, then such
Guarantor's Guaranty shall automatically terminate.
(b) No such termination shall release, reduce, or
otherwise adversely affect the obligations of any other Obligor under
this Agreement, any other Guaranty, or any other Loan Document, all of
which obligations continue to remain in full force and effect.
(c) Each Lender Party shall, at Micro's expense,
execute such documents as Micro may reasonably request to evidence
such termination.
SECTION 11.16 COLLATERAL. Each of the Lenders represents to
the Administrative Agent and each of the other Lenders that it in good faith is
not relying upon any Margin Stock as collateral in the extension or maintenance
of the credit provided for in this Agreement.
REMAINDER OF PAGE INTENTIONALLY BLANK. THIS PAGE IS FOLLOWED BY
SIGNATURE PAGES FOR MICRO AND MICRO CANADA, FOLLOWED BY
SEPARATE SIGNATURE PAGES FOR THE AGENTS AND THE LENDERS.
89 CANADIAN CREDIT AGREEMENT
96
EXECUTED as of the date first stated in this Canadian Credit
Agreement.
XXXXXX MICRO INC., a corporation XXXXXX MICRO INC., a corporation
organized and existing under the organized and existing under the
laws of the State of Delaware, laws of the Province of Ontario,
United States, as a Borrower and a Canada, as a Borrower and a
Guarantor Guarantor
By /s/ Xxxxx X. Xxxxxxxx By /s/ Xxxxxxx X. Xxxxxxxx
------------------------------- -------------------------------
Xxxxx X. Xxxxxxxx, Vice President Xxxxxxx X. Xxxxxxxx, Authorized
& Worldwide Treasurer Representative
Address: 0000 X. Xx. Xxxxxx Xxxxx Address: 000 Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000 Xxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Facsimile No.: 000-000-0000 Facsimile No.: 0000-000-0000
Attention: Xxxxx X. Xxxxxxxx Attention: Xxxxxx X. Xxxxxxx
One of Several Signature Pages to
Canadian Credit Agreement
97
Initial
Percentage Commitment
30% $45,000,000 THE BANK OF NOVA SCOTIA, as the
Administrative Agent
By: /s/ Xxx Xxxxxxxx
-----------------------------
Name: Xxx Xxxxxxxx
Title: Senior Product Manager
THE BANK OF NOVA SCOTIA
By: /s/ Xxxxx Xxxxxx
----------------------------
Name: Xxxxx Xxxxxx
Title: Relationship Manager
THE BANK OF NOVA SCOTIA
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Relationship Manager
Lending Office for Credit Lending Office for Credit
Extensions to Micro Canada: Extensions to Micro:
The Bank of Nova Scotia
The Bank of Nova Scotia 000 Xxxxxxxxxx Xxxxxx
00 Xxxx Xxxxxx Xxxx Xxxxx 0000
00xx Xxxxx Xxx Xxxxxxxxx 00000
Xxxxxxx, Xxxxxxx X0X 0X0
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xx. Xxxxx Xxxxxx Attention: Xx. Xxxxxx Xxxxxxxxx
Relationship Manager Relationship Manager
Fee Payment Location for Credit Fee Payment Location for Credit
Extensions to Micro Canada: Extensions to Micro:
The Bank of Nova Scotia The Bank of Nova Scotia
00 Xxxx Xxxxxx Xxxx Xxxxx 0000
16th Floor 600 Peachtree Street N.E.
Toronto, Ontario M5H 1H1 Xxxxxxx, Xxxxxxx 00000
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xx. Xxxxx Xxxxxx Attention: Mr. Xxxxxx Xxxx
Relationship Manager Manager
One of Several Signature Pages to
Canadian Credit Agreement
98
Initial
Percentage Commitment
30% $45,000,000 ROYAL BANK OF CANADA
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Account Manager
ROYAL BANK OF CANADA
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Manager
Lending Office for Credit Lending Office for Credit Extensions to
Extensions to Micro Canada: Micro:
Royal Bank of Canada Royal Bank of Canada
00xx Xxxxx, Xxxxx Xxxxx 000 Xxxxxxxxx Xxxxxxxxx
000 Xxx Xxxxxx Xxxxx 000
Xxxxxxxx, Xxxxxxx Los Angeles, Xxxxxxxxxx
X0X 0X0 00000 XXX
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxxxx Xxxxxx Attention: Xxxxxxx X. Xxxx
Senior Account Manager Manager
Corporate Banking
Fee Payment Location for Credit Fee Payment Location for Credit
Extensions to Micro Canada: Extensions to Micro:
Royal Bank of Canada Royal Bank of Canada
00xx Xxxxx, Xxxxx Xxxxx 000 Xxxxxxxxx Xxxxxxxxx
000 Xxx Xxxxxx Xxxxx 000
Xxxxxxx, Xxxxxxx Los Angeles, Xxxxxxxxxx
X0X 0X0 00000 XXX
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxxxx Xxxxxx Attention: Xxxxxxx X. Xxxx
Senior Account Manager Manager
Corporate Banking
One of Several Signature Pages to
Canadian Credit Agreement
99
Initial
Percentage Commitment
20% $30,000,000 BANK OF TOKYO-MITSUBISHI (CANADA)
By: /s/ X. Xxxxxxxxxx
----------------------------------
Name: X. Xxxxxxxxxx
Title: Vice President
BANK OF TOKYO-MITSUBISHI LTD.
By: /s/ J. Xxxxx Xxxxxxxx
-----------------------------------
Name: J. Xxxxx Xxxxxxxx
Title: Attorney-in-Fact
Lending Office for Credit Lending Office for Credit
Extensions to Micro Canada: Extensions to Micro:
Bank of Tokyo-Mitsubishi (Canada) The Bank of Tokyo-Mitsubishi Ltd.
Royal Bank Plaza 1251 Avenue of the Americas
Xxxxx Xxxxx, Xxxxx 0000 Xxx Xxxx, Xxx Xxxx
Toronto, Ontario M5J 2J1 USA 10020-1104
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxx Xxxxxxxxxx Attention: J. Xxxxx Xxxxxxxx
Vice President
Corporate Banking Group
Fee Payment Location for Credit Fee Payment Location for Credit
Extensions to Micro Canada: Extensions to Micro:
Bank of Tokyo-Mitsubishi (Canada) The Bank of Tokyo-Mitsubishi Ltd.
Royal Bank Plaza 1251 Avenue of the Americas
Xxxxx Xxxxx, Xxxxx 0000 Xxx Xxxx, Xxx Xxxx
Toronto, Ontario M5J 2J1 USA 10020-1104
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxx Xxxxxxxxxx Attention: J. Xxxxx Xxxxxxxx
Vice President
Corporate Banking Group
One of Several Signature Pages to
Canadian Credit Agreement
100
Initial
Percentage Commitment
6.7% $10,000,000 CREDIT LYONNAIS CANADA
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: First Vice President
and Manager
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Corporate Banking
CREDIT LYONNAIS LOS ANGELES BRANCH
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Manager
Lending Office for Credit Lending Office for Credit
Extensions to Micro Canada: Extensions to Micro:
Credit Lyonnais Canada Credit Lyonnais Los Angeles Branch
One Financial Place 000 Xxxxx Xxxxxx Xxxxxx
One Adelaide Street East Los Angeles, California
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxxxx Xxxxxx Attention: Ms. Xxxxxx Xxxxx
Vice President
Corporate Banking
Fee Payment Location for Credit Fee Payment Location for Credit
Extensions to Micro Canada: Extensions to Micro:
Credit Lyonnais Canada Credit Lyonnais Los Angeles Branch
One Financial Place 000 Xxxxx Xxxxxx Xxxxxx
One Adelaide Street East Los Angeles, California
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxxxx Xxxxxx Attention: Ms. Xxxxxx Xxxxx
Vice President
Corporate Banking
One of Several Signature Pages to
Canadian Credit Agreement
101
Initial
Percentage Commitment
6.7% $10,000,000
BANK OF MONTREAL
By: /s/ X.X. Xxxxxxx
-----------------------------------
Name: X.X. Xxxxxxx
Title: Senior Vice President
BANK OF MONTREAL
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Director
Lending Office for Credit Lending Office for Credit
Extensions to Micro Canada: Extensions to Micro:
Bank of Montreal Bank of Montreal
First Canada Place Suite 4900
24th Floor 601 South Xxxxxxxx Street
M5X 1A1 Xxx Xxxxxxx, Xxxxxxxxxx
XXX 00000
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxxxxx Xxxxxx Attention: Xxxxx Xxxxxx
Fee Payment Location for Credit Fee Payment Location for Credit
Extensions to Micro Canada: Extensions to Micro:
Bank of Montreal Bank of Montreal
First Canada Place Suite 4900
24th Floor 601 South Xxxxxxxx Street
M5X 1A1 Xxx Xxxxxxx, Xxxxxxxxxx
XXX 00000
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxxxxx Xxxxxx Attention: Xxxxx Xxxxxx
One of Several Signature Pages to
Canadian Credit Agreement
102
Initial
Commitment
Percentage Amount
6.7% $10,000,000
THE INDUSTRIAL BANK OF JAPAN
(CANADA)
By: /s/ Xxxx Xxxx
--------------------------------
Name: Xxxx Xxxx
Title: Senior Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, Atlanta Agency
By: /s/ Xxxxx Xxxx
----------------------------------
Name: Xxxxx Xxxx
Title: General Manager
Lending Office for Credit Lending Office for Credit
Extensions to Micro Canada: Extensions to Micro:
The Industrial Bank of Japan The Industrial Bank of Japan, Limited
(Canada) Atlanta Agency
Xxx 00, Xxxxx 0000 One Ninety One Peachtree Tower
000 Xxxxx Xxxxxx Xxxxx 0000
Xxxxxxx, Xxxxxx 000 Xxxxxxxxx Xxxxxx N.E.
XXX 0XX Xxxxxxx, XX
XXX 00000-0000
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxxxxxxx XxXxxxx Attention: Xxxxx Xxxxxxx
Vice President Vice President
Fee Payment Location for Credit Fee Payment Location for Credit
Extensions to Micro Canada: Extensions to Micro:
The Industrial Bank of Japan The Industrial Bank of Japan, Limited
(Canada) Atlanta Agency
Xxx 00, Xxxxx 0000 One Ninety One Peachtree Tower
000 Xxxxx Xxxxxx Xxxxx 0000
Xxxxxxx, Xxxxxx 000 Xxxxxxxxx Xxxxxx N.E.
XXX 0XX Xxxxxxx, XX
XXX 00000-0000
Facsimile No.: 000-000-0000 Facsimile No.: 000-000-0000
Attention: Xxxxxxxx XxXxxxx Attention: Xxxxx Xxxxxxx
Vice President
One of Several Signature Pages to
Canadian Credit Agreement
103
EXHIBIT 10.38
EXHIBIT A-1
REVOLVING NOTE
_______________, _____
FOR VALUE RECEIVED, _______________________________ (a corporation
organized and existing under the laws of ______________, the "BORROWER")
promises to pay to the order of ________________ (the "LENDER") on the
Commitment Termination Date or on such other date that is provided in the
Credit Agreement referred to below, the principal amount of all Outstanding
Credit Extensions consisting of Pro-Rata Revolving Loans made by the Lender to
the Borrower under the Canadian Credit Agreement (together with all amendments
and other modifications, if any, from time to time made to it, the "CREDIT
AGREEMENT") dated as of October 28, 1997, among the Borrower,
_______________________ (a corporation organized and existing under the laws of
____________________), certain financial institutions (including the Lender) as
lenders, The Bank of Nova Scotia and Royal Bank of Canada, respectively, as the
administrative agent and the syndication agent for those lenders, and Bank of
Tokyo- Mitsubishi (Canada) as co-agent. Terms defined in the Credit Agreement
have the same meanings when used, unless otherwise defined, in this Revolving
Note.
The Borrower also promises to pay interest on those Outstanding Credit
Extensions from time to time outstanding from the date of this Revolving Note,
until and after maturity (by acceleration or otherwise) until paid, at the
annual interest rates provided in the Credit Agreement.
Payments of both principal of and interest on each Pro-Rata Revolving
Loan evidenced by this Revolving Note shall be made in the relevant Required
Currency in same day or immediately available funds to the account designated
by the Administrative Agent under the Credit Agreement.
This Revolving Note is one of the Revolving Notes referred to in, and
evidences Indebtedness incurred under, the Credit Agreement, to which reference
is made for (a) a statement of the terms and conditions on which the Borrower
is permitted and required to make repayments of principal of the Indebtedness
evidenced by this Revolving Note and on which that Indebtedness may be declared
to be immediately due and payable, (b) the choice of the laws of the Province
of Ontario, Canada, and (c) other provisions of the Credit Agreement applicable
to this Revolving Note.
__________________________________
By _______________________________
Name:__________________________
Title:_________________________
EXHIBIT X-0
000
XXXXXXX X-0
XXX-XXXX REVOLVING NOTE
_______________, _____
FOR VALUE RECEIVED, _______________________________ (a corporation
organized and existing under the laws of ________________ the "BORROWER")
promises to pay to the order of ______________ (the "LENDER") on
________________________, the principal amount of all Outstanding Credit
Extensions consisting of Non-Rata Revolving Loans made by the Lender to the
Borrower under the Canadian Credit Agreement (together with all amendments and
other modifications, if any, from time to time made to it, the "CREDIT
AGREEMENT") dated as of October 28, 1997, among the Borrower,
________________________ (a corporation organized and existing under the laws
of ____________________), certain financial institutions (including the Lender)
as lenders, The Bank of Nova Scotia and Royal Bank of Canada, respectively, as
the administrative agent and the syndication agent for those lenders, and Bank
of Tokyo-Mitsubishi (Canada) as co-agent. Terms defined in the Credit
Agreement have the same meanings when used, unless otherwise defined, in this
Non-Rata Revolving Note.
The Borrower also promises to pay interest on those Outstanding Credit
Extensions from time to time outstanding from the date of this Non-Rata
Revolving Note, until and after maturity (by acceleration or otherwise) until
paid, at the annual interest rates provided in the Credit Agreement.
Payments of both principal of and interest on each Non-Rata Revolving
Loan evidenced by this Non-Rata Revolving Note shall be made in the relevant
Required Currency in same day or immediately available funds and to an account
designated by the Lender pursuant to the Credit Agreement.
This Non-Rata Revolving Note is one of the Non-Rata Revolving Notes
referred to in, and evidences Indebtedness incurred under, the Credit
Agreement, to which reference is made for (a) a description of the terms and
conditions on which the Borrower is permitted and required to make repayments
of principal of the Indebtedness evidenced by this Non-Rata Revolving Note and
on which that Indebtedness may be declared to be immediately due and payable,
(b) the choice of the laws of the Province of Ontario, Canada, and (c) other
provisions of the Credit Agreement applicable to this Non-Rata Revolving Note.
__________________________________
By _______________________________
Name:__________________________
Title:_________________________
EXHIBIT A-2
105
EXHIBIT B
BORROWING REQUEST
Dated _________________, ______
The Bank of Nova Scotia,
as Administrative Agent
Loan Administration and Agency Services
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attn: Senior Manager
Facsimile No. (000) 000-0000
This request is delivered to you by _______________________ (a
_____________ organized and existing under the laws of ______________, the
"BORROWER") under SECTION 3.1 of the Canadian Credit Agreement (together with
all amendments and other modifications, if any, from time to time made to it,
the "CREDIT AGREEMENT") dated as of October 28, 1997, among the Borrower,
________________________ (a corporation organized and existing under the laws
of ____________________), certain financial institutions as lenders, you and
Royal Bank of Canada, respectively, as the administrative agent and the
syndication agent for those lenders, and Bank of Tokyo-Mitsubishi (Canada) as
co-agent. Terms defined in the Credit Agreement have the same meanings when
used, unless otherwise defined, in this request.
The Borrower requests that a Borrowing be extended in the total
principal amount of ________________________,1 on _________________, ____,
consisting of [LIBO Rate Loans having an Interest Period of [one] [three] [six]
month(s)] [Canadian Prime Rate Loans][U.S. Base Rate Loans].2
The most recently delivered Quarterly Report is attached, with those
additions and revisions that are necessary to reflect the Outstanding Credit
Extensions on the date of this request.
Pursuant to SECTION 6.2.2 of the Credit Agreement, each of the
delivery of this request and the acceptance by the Borrower of the proceeds of
the requested Borrowing constitute a representation and warranty by each
Obligor that, on the date of extending the requested Borrowing (and immediately
before and after giving effect to it and to the application of the proceeds of
it) all the statements in SECTION 6.2.1 of the Credit Agreement are true and
correct; provided that, with respect to the covenants in SECTION 8.2.3 of the
Credit Agreement, the foregoing representation and warranty is made to the best
knowledge of each Obligor (after due inquiry).
The Borrower agrees that, if before the time of the requested
Borrowing any matter certified to in this request by it will not be true and
correct at that time as if then made, then it will immediately so notify the
Administrative Agent. Except to the extent, if any, that before the time of
the requested Borrowing the Administrative Agent shall receive written notice
to the contrary from the Borrower, each
_____________________________
1 Insert either Canadian Dollars or Dollars within the minimum and
multiple limitations.
2 Insert appropriate interest rate option and, if applicable, the number
of months with respect to LIBO Rate Loans.
EXHIBIT B
106
matter certified to in this request shall be deemed once again to be certified
as true and correct at the date of the requested Borrowings as if then made.
Please wire transfer the proceeds of the requested Borrowing to the
accounts of the following Persons at the banks indicated respectively:
-------------------------------------------------------------------------------------------------------
AMOUNT TO BE WIRED PERSON TO BE PAID NAME, ADDRESS, ETC. OF BANKS
NAME ACCOUNT NO.
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-------------------- -------------------- -------------------- --------------------------
-------------------- -------------------- -------------------- --------------------------
Attention:
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-------------------- -------------------- -------------------- --------------------------
Attention:
----------------
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-------------------- -------------------- -------------------- --------------------------
-------------------- -------------------- -------------------- --------------------------
Attention:
----------------
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BALANCE THE BORROWER -------------------- --------------------------
-------------------- --------------------------
Attention:
----------------
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The Borrower has caused this request to be executed and delivered, and
the certification and warranties in this request to be made, by its duly
Authorized Person on the date first stated above.
__________________________________
By _______________________________
Name:__________________________
Title:_________________________
cc: The Bank of Nova Scotia,
Syndications Department
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attn: Vice President
Facsimile No. (000) 000-0000
EXHIBIT B
107
EXHIBIT C
ISSUANCE REQUEST
Dated ____________________
The Bank of Nova Scotia,
as Administrative Agent
Loan Administration and Agency Services
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attn: Senior Manager
Facsimile No. (000) 000-0000
This request is delivered to you by ______________________ (a
_____________ organized and existing under the laws of ______________, the
"BORROWER") under SECTION 3.2 of the Canadian Credit Agreement (together with
all amendments and other modifications, if any, from time to time made to it,
the "CREDIT AGREEMENT") dated as of October 28, 1997, among the Borrower,
_______________________ (a corporation organized and existing under the laws of
____________________), certain financial institutions as lenders, you and Royal
Bank of Canada, respectively, as the administrative agent and the syndication
agent for those lenders, and Bank of Tokyo-Mitsubishi (Canada) as co-agent.
Terms defined in the Credit Agreement have the same meanings when used, unless
otherwise defined, in this request.
The Borrower requests that on __________________________________ (the
"DATE OF ISSUANCE"), ____________________ (the "ISSUER") [issue a standby
Pro-Rata Letter of Credit in the initial Stated Amount of ___________1 with a
Stated Expiry Date of ___, 19____] [extend the Stated Expiry Date of
Irrevocable Standby Letter of Credit No. _____, issued on ____________, 19____,
as a Pro-Rata Letter of Credit, in the initial Stated Amount of
_________________1 to a revised Stated Expiry Date of ______________, 19___].2
[The beneficiary of the requested Pro-Rata Letter of Credit will be
______________________ ,3 and the requested Pro-Rata Letter of Credit will be
in support of _____________________________ 3.]4 [The following documents must
be delivered to the Issuer in connection with a drawing under the Pro-Rata
Letter of Credit: ____________________.]4 Partial drawings under the requested
Pro-Rata Letter of
__________________________________
1 Insert either Canadian Dollars or Dollars.
2 Insert the first set of bracketed language to request the issuance
of Letter of Credit and the second set of bracketed language to
request the extension of a Letter of Credit.
3 Insert name and address of beneficiary.
4 Delete bracketed sentence if Issuance Request is for an extension.
EXHIBIT C
108
Credit are [not](5) permitted.
Pursuant to SECTION 6.2.2 of the Credit Agreement, the delivery of
this request constitutes a representation and warranty by each Obligor that, on
the date of this request, and immediately after giving effect to the [issuance]
[extension](5) of the requested Pro-Rata Letter of Credit, all statements in
SECTION 6.2.1 of the Credit Agreement are true and correct; provided that, with
respect to the covenants in SECTION 8.2.3 of the Credit Agreement, the
foregoing representation and warranty is made to the best knowledge of each
Obligor (after due inquiry).
The Borrower agrees that, if before the time of the [issuance]
[extension](5) of the requested Pro-Rata Letter of Credit, any matter certified
to in this request by it will not be true and correct at such time as if then
made, then it will immediately so notify the Administrative Agent. Except to
the extent, if any, that before the time of the [issuance] [extension](5) of the
requested Pro-Rata Letter of Credit the Administrative Agent and the Issuer
shall receive written notice to the contrary from the Borrower, each matter
certified to in this request shall be deemed to be certified at the date of
that issuance or extension.
The Borrower has caused this request to be executed and delivered, and
the certification and warranties in this request to be made, by its duly
Authorized Person as of the date first stated above.
__________________________________
By _______________________________
Name:__________________________
Title:_________________________
cc: The Bank of Nova Scotia,
Syndications Department
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attn: Vice President
Facsimile No. (000) 000-0000
__________________________________
Insert as appropriate.
EXHIBIT C
109
EXHIBIT D
CONTINUATION/CONVERSION NOTICE
Dated ______________________
The Bank of Nova Scotia,
as Administrative Agent
Loan Administration and Agency Services
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attn: Senior Manager
Facsimile No. (000) 000-0000
This notice is delivered to you by _______________________________ (a
_____________ organized and existing under the laws of ______________, the
"BORROWER") under SECTION 4.2.3 of the Canadian Credit Agreement (together with
all amendments and other modifications, if any, from time to time made to it,
the "CREDIT AGREEMENT") dated as of October 28, 1997, among the Borrower,
________________________ (a corporation organized and existing under the laws
of ____________________), certain financial institutions as lenders, you and
Royal Bank of Canada, respectively, as the administrative agent and the
syndication agent for those lenders, and Bank of Tokyo-Mitsubishi (Canada) as
co- agent. Terms defined in the Credit Agreement have the same meanings when
used, unless otherwise defined, in this notice.
The Borrower requests that on _____________________, 19____,
(1) $________________ of the presently outstanding
principal amount of the Pro-Rata Revolving Loans originally made on ,
19__,
(2) and presently being maintained as 1[Canadian Prime
Rate Loans] [LIBO Rate Loans] [U.S. Base Rate Loans],
(3) be 1[converted into] [continued as],
(4)2 [LIBO Rate Loans having an Interest Period of [one]
[three] [six] month(s)] [Canadian Prime Rate Loans] [U.S. Base Rate
Loans].
__________________________________
1 Insert either as appropriate
2 Insert appropriate interest rate option and, if applicable, the number
of months with respect to LIBO Rate Loans.
EXHIBIT D
110
The delivery of this notice constitutes a representation and warranty
by each Obligor that no Event of Default [Default]1 has occurred and is
continuing or will (immediately after giving effect to the requested
continuation or conversion requested hereby) occur and be continuing; provided
that with respect to the covenants in SECTION 8.2.3 of the Credit Agreement,
the foregoing representation and warranty is made to the best knowledge of each
Obligor (after due inquiry).
The Borrower agrees that, if before the time of that continuation or
conversion any matter certified to in this notice by it will not be true and
correct at such time as if then made, then it will immediately so notify the
Administrative Agent. Except to the extent, if any, that before the time of
the requested continuation or conversion the Administrative Agent shall receive
written notice to the contrary from the Borrower, each matter certified to in
this notice shall be deemed to be certified at the date of that continuation or
conversion as if then made.
The Borrower has caused this notice to be executed and delivered, and
the certification and warranties in this notice to be made, by its duly
Authorized Person on the date first stated above.
__________________________________
By _______________________________
Name:__________________________
Title:_________________________
cc: The Bank of Nova Scotia,
Syndications Department
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attn: Vice President
Facsimile No. (000) 000-0000
__________________________________
1 Include bracketed text if Borrower is requesting either the
continuation of a previously-made Pro-Rata Revolving Loan as, or
the conversion of a previously-made Canadian Prime Rate Loan or U.S.
Base Rate Loan to, a LIBO Rate Loan with an Interest Period longer
than one month.
EXHIBIT D
111
EXHIBIT E
COMPLIANCE CERTIFICATE
Dated _________________________
To the Lenders and Agents party to the
Canadian Credit Agreement described below
This certificate is delivered in compliance with SECTIONS 8.1.1(C) and
(D) of the Canadian Credit Agreement (together with all amendments and other
modifications, if any, from time to time made to it, the "CREDIT AGREEMENT")
dated as of October 28, 1997, among Xxxxxx Micro Inc. (a corporation organized
and existing under the laws of Delaware, United States of America, "MICRO"),
Xxxxxx Micro Inc. (a corporation organized and existing under the laws of the
Province of Ontario, Canada), certain financial institutions as lenders, The
Bank of Nova Scotia and Royal Bank of Canada, respectively, as the
administrative agent and the syndication agent for those lenders, and Bank of
Tokyo-Mitsubishi (Canada) as co-agent. Terms defined in the Credit Agreement
have the same meanings when used, unless otherwise defined, in this
certificate.
The undersigned certifies that (a) the attached financial statements are
a complete and correct copy of Micro's required financial statements for the
period indicated and that those financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
(as interpreted in accordance with SECTION 1.4 of the Credit Agreement), (b) no
Default has occurred and is continuing as of the date of this certificate,1 and
(c) a true and correct statement of calculations demonstrating Micro's
compliance with the various requirements of the Credit Agreement is attached.
Although the allocation may vary from time to time and at any time, Micro
anticipates that Micro will make ________% and Micro Canada will make
________% use of Credit Extensions under the Credit Agreement for the current
Fiscal Period.
__________________________________
Name:__________________________
Title:_________________________
__________________________________
1 If a Default has occurred and is continuing as of the date of the
applicable Compliance Certificate, the text of CLAUSE (B) should be
replaced with a statement of the nature of the Default and the action
which Micro has taken or proposes to take with respect to it.
EXHIBIT E
112
EXHIBIT X-0
XXXXXXXXXXXX XXXXXX XXXXXXXX XX FIRST DEMAND
This Guaranty on first demand (hereinafter, this "DEMAND GUARANTY")
given by:
INGRAM EUROPEAN COORDINATION CENTER N.V., a naamloze vennootschap (a
company) established under the laws of Belgium as a coordination
center, with its registered office at Xxxxxxxxxxxxxxxx 00, 0000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxx registered with the trade register of Brussels
under the number 547.298 (the "GUARANTOR");
WHEREAS Xxxxxx Micro Singapore PTE Ltd., a corporation established
under the laws of Singapore, with registered office at 000 Xxxxx Xxxxxx,
#00-00/00, XX Xxxxxxxx, Xxxxxxxxx 000000 (hereinafter referred to as "MICRO
SINGAPORE"), Xxxxxx Micro Inc., a company established under the laws of
Ontario, Canada, with registered office at 000 Xxxxxx Xxxxx, Xxxxxx, Xxxxxxx,
Xxxxxx X0X 0X0 ("MICRO CANADA"), and the Guarantor (collectively, the
"SUBSIDIARIES") are direct or indirect subsidiaries of Xxxxxx Micro Inc., a
corporation established under the laws of Delaware, United States of America,
with registered office at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx
00000 ("MICRO");
AND WHEREAS Micro, the Subsidiaries and the other direct and indirect
subsidiaries of Micro (collectively, the "GROUP") are engaged as an integrated
group in diversified operations including wholesale distribution of
microcomputer software and hardware products, multimedia products, customer
financing, assembly and configuration and other related wholesaling,
distribution and service activities;
AND WHEREAS this integrated operation requires financing on a group
basis whereby credit supplied to members of the Group is made available from
time to time to other members of the Group, including the Subsidiaries, as
required for the continued successful operation of the members of the Group
separately, and the integrated operation as a whole;
AND WHEREAS Micro has negotiated a Canadian Credit Agreement (as
amended or otherwise modified from time to time, the "CREDIT AGREEMENT") dated
as of October 28, 1997, among Micro, Micro Canada, certain financial
institutions (together with their respective successors and permitted assigns
and any branch or affiliate of a financial institution funding a Loan as
permitted by SECTION 5.6 of the Credit Agreement, collectively, the "LENDERS"),
The Bank of Nova Scotia, as administrative agent (in that capacity, the
"ADMINISTRATIVE AGENT") for the Lenders, Royal Bank of Canada, as syndication
agent for the Lenders, and Bank of Tokyo-Mitsubishi (Canada) as co-agent.
AND WHEREAS pursuant to the Credit Agreement the Lenders will make
Credit Extensions (that capitalized term and all other capitalized terms not
defined herein to have the meanings provided in the Credit Agreement) to Micro
and Micro Canada (collectively, "BORROWERS") from time to time;
AND WHEREAS the Borrowers expect to make a portion of the proceeds of
the Credit Extensions available to other members of the Group, including the
Subsidiaries, in order to contribute to fulfilling the present and future
financing needs of the Group;
AND WHEREAS each member of the Group will benefit from the
implementation of the Credit
EXHIBIT G-1
113
Agreement by way of secure access to sources of long-term financing on
favorable terms and conditions and financing arrangements on a more
cost-efficient basis, as well as other indirect benefits;
AND WHEREAS it is a condition of the Lenders' entering into the Credit
Agreement and making the initial Credit Extension thereunder that each of Micro
and the Subsidiaries (including the Guarantor) enter into guarantees on the
terms and conditions set forth in the Credit Agreement;
AND WHEREAS pursuant to the Credit Agreement other subsidiaries of
Micro may be required or permitted from time to time to deliver additional
guarantees (together with this Demand Guaranty and the aforementioned
guarantees being delivered by Micro and the other Subsidiaries, collectively
the "GROUP GUARANTEES") of the Obligations of the Borrowers under the Credit
Agreement and the other Loan Documents (Micro and its Subsidiaries in their
capacity as guarantors (including the Guarantor), together with such other
subsidiaries required to deliver a guaranty from time to time pursuant to the
Credit Agreement, collectively the "GROUP GUARANTORS");
AND WHEREAS the Guarantor and the other Group Guarantors have entered
into or will enter into an agreement (the "INTRA-GROUP AGREEMENT") pursuant to
which each of the Group Guarantors must agree to provide Group Guarantees on
terms and conditions provided for in the Credit Agreement in order to obtain
the benefits from any portion of the Credit Extensions;
AND WHEREAS it is therefore necessary for the Group Guarantors to
enter into the Group Guarantees in order to obtain from the Borrowers the
benefit of any portion of the proceeds of the Credit Extensions;
AND WHEREAS the application of the Group's creditworthiness under the
Credit Agreement by means of the incorporation of unlimited guarantees of the
Group Guarantors results in a credit structure that enhances the
creditworthiness of the Group and permits financing to be raised on terms and
conditions more favorable to the members of the Group than would otherwise be
possible;
AND WHEREAS, in order to induce the Lenders, the Administrative Agent,
the Syndication Agent and the Co-Agent (collectively, the "LENDER PARTIES") to
enter into the Credit Agreement and make Credit Extensions thereunder, and to
obtain the other valuable benefits and consideration described therein and
herein, each Group Guarantor has agreed or will agree to guarantee, on the
terms and conditions set forth in the relevant Group Guarantees the obligations
of each Borrower under the Credit Agreement, the Notes (if any) and each other
Loan Document in favor of the Lender Parties, and each Group Guarantor expects
to derive benefits, directly or indirectly, from the proceeds of the Credit
Extensions;
AND WHEREAS this Demand Guaranty is intended to constitute and
constitutes an independent guaranty on first demand (guarantee op eerste
verzoek), and not an ordinary guaranty (borgtocht), and the other Group
Guarantees are on terms and conditions similar to those of an independent
guaranty on first demand (guarantie op eerste verzoek), and in particular to
the terms of this Demand Guaranty;
AND WHEREAS, pursuant to the terms of the Group Guarantees, at any
time when any Lender Party is entitled to demand payment under the Group
Guarantees, such Lender Party may, at its option, make demand on any one or
more Group Guarantors and is not obliged to make demand on any proportionate
basis;
2 EXHIBIT G-1
114
AND WHEREAS the Intra-Group Agreement provides for (i) indemnification
by the Borrowers in favor of each Group Guarantor for Guarantor Losses (as
defined in the Intra-Group Agreement) and for (ii) contribution by all the
Group Guarantors such that all losses, costs and expenses incurred by the Group
Guarantors in connection with the obligations created by the Group Guarantees
shall be shared by all of the Group Guarantors proportionately on the basis of
their net asset values and their obligations to the Borrowers as at the date
such losses, costs and expenses may be incurred;
AND WHEREAS the Credit Agreement is governed by the laws of the
Province of Ontario, Canada; the Micro Guaranty is governed by the laws of the
State of New York, United States; the Micro Canada Guaranty is governed by the
laws of the Province of Ontario, Canada; the Micro Singapore Guaranty is
governed by the laws of Singapore; and this Demand Guaranty and the Intra-Group
Agreement are governed by the laws of Belgium;
THE FOREGOING HAVING BEEN PRESENTED, it is contracted and agreed as
follows:
1. GUARANTY ON FIRST DEMAND.
(a) The Guarantor hereby unconditionally, absolutely and
irrevocably guarantees on first demand, by way of an independent guaranty on
first demand (guarantie op eerste verzoek) and not by way of ordinary guaranty
(borgtocht), to each Lender Party (including their respective successors and
assigns):
(i) the full and punctual payment when due, whether on
demand, at stated maturity, or on a prepayment date, by acceleration
or otherwise, of all amounts payable by the Borrowers (other than the
Guarantor) under or in connection with the Credit Agreement and the
other Loan Documents, including, without limitation, all principal,
interest, premiums, fees and expenses payable by the Borrowers (other
than the Guarantor) thereunder and all reasonable expenses incurred by
any Lender Party in enforcing any rights under the Credit Agreement,
the Notes, and the other Loan Documents (including this Demand
Guaranty) (all of the foregoing guaranteed payments described in this
SECTION 1(a)(I) being the "GUARANTEED PAYMENTS"), and
(ii) the full performance and observance as required of
all of the covenants, conditions and agreements provided in the Credit
Agreement and each other Loan Document required to be performed or
observed by each Borrower (other than the Guarantor) (all of the
foregoing guaranteed obligations described in this SECTION 1(a)(II)
being the "GUARANTEED COVENANTS" and, collectively with the Guaranteed
Payments, being the "GUARANTEED OBLIGATIONS").
(b) The costs guaranteed by this Demand Guaranty include all costs
of registration and all other ancillary costs which this Demand Guaranty could
lead to, including without limitation any and all costs and expenses
(including, to the fullest extent permitted by law, reasonable attorney's fees
and expenses) incurred by any Lender Party in enforcing any rights under this
Demand Guaranty.
2. EFFECTIVE DATE. This Demand Guaranty shall enter into force
upon the date hereof.
3. PAYMENT AND PERFORMANCE ON DEMAND. The Guarantor shall make
payment of all Guaranteed Payments and of all other amounts payable by it
hereunder forthwith after substantiated
3 EXHIBIT G-1
115
demand therefor is made in writing to it by any Lender Party. Such demand
shall be deemed to have been sufficiently substantiated if it is for the amount
specified in a statement by such Lender Party of the amounts payable and not
paid by the Borrowers (other than the Guarantor) under the terms of the Credit
Agreement, and of any other amounts payable by the Guarantor hereunder.
In addition, and without prejudice or limitation to the foregoing, the
Guarantor shall perform or ensure performance of each Guaranteed Covenant, to
the extent of its legal capacity and to the best of its abilities, forthwith
after substantiated demand therefor is made in writing to it by any Lender
Party. Such demand shall be deemed to have been sufficiently substantiated if
it identifies the Loan Document under which the obligation to perform or comply
with each such Guaranteed Covenant arises, specifies the relevant section of
such Loan Document, and states that such Guaranteed Covenant is required of
such Borrower by such Loan Document but has not been performed or complied
with.
Each substantiated demand pursuant to this SECTION 3 shall be deemed
to have been effectively made by a Lender Party when addressed to the Guarantor
at its last address known to such Lender Party and personally delivered to such
address or, if sent by telecopy or other similar means of telecommunications,
when the appropriate receipt of transmission is received by the sender thereof.
This Demand Guaranty constitutes a first demand guaranty, and the
Guarantor specifically agrees that it shall not be necessary or required that
any Lender Party exercise any right, assert any claim or demand or enforce any
remedy whatsoever against any Borrower or any other Obligor or any other
Person, before or as a condition to the obligations of the Guarantor hereunder.
4. GUARANTEE ABSOLUTE, ETC. This Demand Guaranty shall in all
respects be a continuing, absolute and unconditional and irrevocable guaranty
on first demand. The liability of the Guarantor under this Demand Guaranty is
absolute and irrevocable and a Guaranteed Payment shall be deemed to be payable
by each Borrower (other than the Guarantor) and a Guaranteed Covenant shall be
deemed to be required of each Borrower (other than the Guarantor), for the
purposes of this Demand Guaranty, including for the purposes of any demand
pursuant to SECTION 3 above, notwithstanding:
(a) any lack of validity or enforceability of any Obligor's
obligations under or with respect to any Loan Document or any other agreement
or instrument relating thereto, or the existence of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting the terms of any
Loan Document or the rights or obligations of the Obligors thereunder or with
respect thereto;
(b) any change, whether or not agreed to by the Lender Parties, in
the time, manner or place of payment of, or in any other term of, all or any of
the Loan Documents or any other amendment, renewal, extension, acceleration,
compromise or waiver of or any consent or departure from the terms or
provisions of any of the Loan Documents;
(c) the lack of power or authority of any of the Obligors to
execute and deliver any of the Loan Documents; any set-off or counterclaim
which may at any time be available to or asserted by any of the Obligors
against any Lender Party with respect to such Obligor's obligations under any
of the Loan Documents; the existence or continuance of any Obligor as a legal
entity; the consolidation or merger of any Obligor with or into any other
corporation, or the sale, lease or other disposition by any Obligor of all or
substantially all of its assets to any other business entity, whether or not
effected in compliance with the provisions of the Loan Documents; or the
bankruptcy or insolvency of any Obligor, the admission in
4 EXHIBIT G-1
116
writing by any Obligor of its inability to pay its debts as they mature, or the
making by any Obligor of a general assignment for the benefit of, or entering
into a composition or arrangement with, creditors;
(d) any act, failure to act, delay or omission whatsoever on the
part of any Lender Party, including, without limitation, any failure to demand,
delay in demanding or rescission of a demand for any payment under any of the
Loan Documents, any failure to give to any Obligor (including the Guarantor)
notice of default in the making of any payment due and payable under any of the
Loan Documents or in the performance of any covenant, condition or agreement
contained in any of the Loan Documents, any action taken by any Lender Party
in the exercise, either in whole or in part, of any right or power conferred by
any of the Loan Documents, or the failure, delay or omission by any Lender
Party to exercise any such right or power;
(e) any invalidation of any of the obligations of the Guarantor or
any other Obligor or the repudiation by the Guarantor of this Demand Guaranty
or any of the other Group Guarantees by any other Group Guarantor, whether or
not under color of right;
(f) except in each case by a written amendment, waiver, consent,
release, or termination executed and delivered by the Administrative Agent or
any other appropriate Lender Party pursuant to SECTION 13(B) of this Demand
Guaranty, SECTION 11.1(b) of the Credit Agreement, or both, as applicable, any
act, failure to act, delay or omission whatsoever on the part of any Lender
Party with respect to any of the Loan Documents, including any termination of
any such obligations, any amendment, compromise or waiver of or any consent or
departure from the terms or provisions of this Demand Guaranty or the other
Group Guarantees or any release of the Guarantor or the other Group Guarantors,
from liability hereunder or thereunder;
(g) except in each case by a written amendment, waiver, consent,
release, or termination executed and delivered by the Administrative Agent or
any other appropriate Lender Party pursuant to SECTION 13(b) of this Demand
Guaranty, SECTION 11.1(b) of the Credit Agreement, or both, as applicable, any
release, discharge, modification or exchange of any property pledged or
mortgaged or in which a security interest has been granted as collateral for
the Guaranteed Obligations, or any amendment or termination of or consent or
waiver under any agreement or instrument now or hereafter providing for
granting, pledging, mortgaging or conveying collateral for the Guaranteed
Obligations; and
(h) any other circumstance which might otherwise constitute a
defense available to, or a discharge under applicable laws of, the Borrowers or
any other Obligor.
As between the Guarantor on the one hand and the Lender Parties on the
other hand, the Guaranteed Obligations may be declared to be forthwith due and
payable as provided in the Credit Agreement notwithstanding any stay,
injunction, or other prohibition preventing such declaration as against the
Obligors (other than Ingram European Coordination Center N.V. in its capacity
as the Guarantor), and, in the event of any such declaration, such obligations
shall forthwith be deemed to be amounts payable by such Obligors for purposes
of this Demand Guaranty.
5. TERM OF THE DEMAND GUARANTY. This Demand Guaranty shall
continue in force so long as (a) any of the Guaranteed Obligations is
outstanding and (b) the Commitments have not been fully terminated.
5 EXHIBIT G-1
117
6. WAIVER OF NOTICE. The Guarantor hereby waives notice of
acceptance, default, dishonor, non-payment, non-performance or any other notice
to or upon the Obligors, other than any notice required by this Demand
Guaranty.
7. NO SUBROGATION. Notwithstanding any payment or payments made
or expenses incurred by the Guarantor pursuant to this Demand Guaranty, the
rights of the Guarantor:
(a) against each Borrower (other than the Guarantor) in respect of
any and all rights of reimbursement and subrogation with respect to this Demand
Guaranty or any other guaranty of any nature (including the other Group
Guarantees);
(b) against each Borrower (other than the Guarantor), any other
Subsidiary or any other party to the Intra-Group Agreement in respect of any
and all present and future debts and obligations thereunder of such party to
the Guarantor; and
(c) if an Event of Default shall have occurred and be continuing,
against each Borrower (other than the Guarantor) in respect of any and all
other present and future debts and obligations of such Borrower to the
Guarantor, (including any right of subrogation, reimbursement, exoneration or
indemnification) are hereby postponed in favor of and subordinated to the (x)
full payment in cash of all the Guaranteed Obligations owing to the Lender
Parties and (y) the termination of all Commitments. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, and the
Guaranteed Obligations shall not have been paid in cash in full and the
Commitments of the Lender Parties shall not have terminated, such amount shall
be deemed to have been paid to the Guarantor for the benefit of, and held by
the Guarantor in the name and for the account of the Lender Parties and, in
addition, shall forthwith be paid to the Administrative Agent for the account
of the Lender Parties to be credited and applied upon the Guaranteed
Obligations if then matured or forthwith be repaid to the relevant Borrower if
such obligations are then unmatured.
8. CONTINUING GUARANTY. This Demand Guaranty shall continue to
be effective, or be reinstated as the case may be, if at any time any payment,
or any part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by any Lender Party upon the insolvency,
bankruptcy or reorganization of any Borrower or any other Obligor (including
the Guarantor) or otherwise, all as though such payment had not been made.
9. SUCCESSORS, ASSIGNMENT. This Demand Guaranty shall be binding
upon the Guarantor and its legal successors and assigns. The benefit of this
Demand Guaranty at any time is intended for the benefit of each Lender Party
and its successors and assigns, and shall be considered, subject to any
procedures or formalities required by law, to be assigned upon the assignment
or transfer by any Lender Party of its Notes and other rights and obligations
under the Credit Agreement and the other Loan Documents without requiring any
act of or consent or acknowledgment from the Guarantor. The Guarantor hereby
irrevocably appoints Micro as its mandatary to receive notice, by way of
registration pursuant to the Credit Agreement, of the transfer of any Note or
of other rights and obligations with respect to the Credit Agreement and the
other Loan Documents (including this Guaranty) by any Lender Party, and
instructs Micro, in its capacity as mandatary, to inform the directors of the
Guarantor forthwith of any such transfer.
10. COUNTERPARTS. This Demand Guaranty may be executed in one or more
counterparts, and
6 EXHIBIT G-1
118
the Guarantor hereby agrees to enter into and provide to any Lender Party such
additional counterparts of this Demand Guaranty as such Lender Party may
request in writing at any time and from time to time.
11. ENTIRE AGREEMENT. This Demand Guaranty, together with the
other agreements and documents herein or therein referred to, constitutes the
entire agreement between the parties pertaining to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, between the parties with respect to the
subject matter hereof, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter hereof
except as specifically set forth herein.
12. DIVISIBILITY. If any obligation, covenant or provision herein
contained is determined to be invalid, illegal or unenforceable, in whole or in
part, by a court of competent jurisdiction, such determination shall not affect
or impair and shall not be deemed to affect or impair, the validity, legality
or enforceability of any other obligation, covenant or provision herein
contained. Each such obligation, covenant or provision so determined to be
invalid, illegal or unenforceable shall be interpreted in such manner as to
render it or them valid, legal and enforceable to the greatest extent permitted
by applicable law. Each obligation, covenant and provision of this agreement
is hereby declared to be divisible, separate and distinct.
13. MISCELLANEOUS PROVISIONS.
(a) This Demand Guaranty is a Loan Document executed pursuant to
the Credit Agreement and shall (unless otherwise expressly indicated herein) be
construed, administered and applied in accordance with the terms and provisions
thereof, including, without limitation, SECTION 5.11 and ARTICLE XI thereof.
(b) No amendment to or waiver of any provision of this Demand
Guaranty, nor consent to any departure by the Guarantor herefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Administrative Agent on behalf of the Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
(c) All notices and communications provided to any party hereto,
other than as provided in SECTION 3 hereof, shall be made in the manner, and
subject to the provisions set forth in SECTION 11.2 of the Credit Agreement.
(d) Section captions used in this Demand Guaranty are for
convenience of reference only, and shall not affect the construction of this
Guaranty.
(e) In addition to, and not in limitation of, any rights of any
Lender Party under applicable law, each Lender Party shall, upon the occurrence
and during the continuance of any Default described in any of CLAUSES (a)
through (d) of SECTION 9.1.9 of the Credit Agreement (after providing notice to
the Guarantor with respect thereto) or any Event of Default, have the right, to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final), credits, accounts
or moneys of the Guarantor to the payment of the obligations of the Guarantor
that are at such time due and owing to such Lender Party hereunder,
irrespective of whether or not such Lender Party shall have made any demand
under any Loan Document.
14. APPLICABLE LAW; SUBMISSION TO JURISDICTION. This Demand Guaranty shall
be governed
7 EXHIBIT G-1
119
by and interpreted in accordance with the laws of Belgium. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEMAND
GUARANTY OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE LENDER PARTIES OR THE GUARANTOR PURSUANT TO THIS
DEMAND GUARANTY, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF
THE STATE OF NEW YORK, U.S.A., THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK OR THE COURTS OF BRUSSELS, BELGIUM. THE
GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
AFOREMENTIONED COURTS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND, IN THE CASE OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, IRREVOCABLY CONSENTS TO
THE SERVICE OF ANY AND ALL PROCESS IN SUCH LITIGATION BY THE MAILING OF COPIES
OF SUCH PROCESS TO THE GUARANTOR AT ITS ADDRESS SPECIFIED PURSUANT TO SECTION
11.2 OF THE CREDIT AGREEMENT, IN EACH SUCH CASE MARKED FOR THE ATTENTION OF
GENERAL COUNSEL, XXXXXX MICRO INC., OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK IN A MANNER PERMITTED BY THE LAWS OF EACH SUCH
JURISDICTION. THE GUARANTOR HEREBY EXPRESSLY, AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT
IN ANY INCONVENIENT FORUM. TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS DEMAND GUARANTY.
15. WAIVER OF JURY TRIAL. THE LENDER PARTIES AND THE GUARANTOR
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS DEMAND GUARANTY OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF THE LENDER PARTIES OR THE GUARANTOR, THE GUARANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND
EACH OTHER PROVISION OF THIS DEMAND GUARANTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE LENDER PARTIES ENTERING INTO THE CREDIT AGREEMENT
AND MAKING CREDIT EXTENSIONS THEREUNDER.
DONE at Santa Ana, California as of October 28, 1997.
By
___________________________________________
Xxxxxxx Xxxxxxxx, Authorized Representative
8 EXHIBIT G-1
120
EXHIBIT G-2
INTRA-GROUP AGREEMENT
This Intra-Group Agreement is made as of October 28, 1997 (this
"AGREEMENT") between:
- XXXXXX MICRO INC., a corporation existing under the laws of the State
of Delaware, United States of America, with registered office at 0000
Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of
America (hereinafter referred to as "MICRO");
- XXXXXX MICRO SINGAPORE PTE LTD., a corporation existing under the laws
of Singapore, with registered office at 000 Xxxxx Xxxxxx, #00-00/00, XX
Xxxxxxxx, Xxxxxxxxx 000000 (hereinafter referred to as "MICRO
SINGAPORE");
- XXXXXX MICRO INC., a corporation existing under the laws of the
Province of Ontario, Canada, with registered office at 000 Xxxxxx
Xxxxx, Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 (hereinafter referred to as
"MICRO CANADA"); and
- INGRAM EUROPEAN COORDINATION CENTER N.V., a corporation ("NAAMLOZE
VENNOOTSCHAP"), existing under the laws of Belgium as a coordination
center, with its registered office at Xxxxxxxxxxxxxxxx 00, 0000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxx, registered with the trade register of Brussels
under the number 547.298 (hereinafter referred to as "COORDINATION
CENTER");
WHEREAS, Micro Singapore, Micro Canada, and Coordination Center
(collectively, the "SUBSIDIARIES") are direct or indirect subsidiaries of
Micro;
AND WHEREAS Micro, the Subsidiaries and the other direct and indirect
subsidiaries of Micro (collectively, the "GROUP") are engaged as an integrated
group in diversified operations including wholesale distribution of
microcomputer software and hardware products, multimedia products, customer
financing, assembly and configuration and other related wholesaling
distribution and service activities;
AND WHEREAS this integrated operation requires financing on a group
basis whereby credit supplied to members of the Group is made available from
time to time to other members of the Group, including the Subsidiaries, as
required for the continued successful operation of the members of the Group
separately, and the integrated operation as a whole,
AND WHEREAS Micro, Micro Canada, certain financial institutions
(together with their respective successors and permitted assigns and any branch
or affiliate of a financial institution funding a Loan as permitted by SECTION
5.6 of the Credit Agreement, collectively, the "LENDERS"), The Bank of Nova
Scotia, as administrative agent (in that capacity, the "ADMINISTRATIVE AGENT")
for the Lenders, Royal Bank of Canada, as syndication agent for the Lenders,
and Bank of Tokyo-Mitsubishi (Canada) as co-agent are parties to the Canadian
Credit Agreement (as amended or otherwise modified from time to time, the
"CREDIT AGREEMENT") dated as of October 28, 1997;
AND WHEREAS pursuant to the Credit Agreement the Lenders will make
Credit Extensions (that capitalized term and all other capitalized terms not
defined herein to have the meanings provided in
EXHIBIT G-2
121
SECTION 1.1) to Micro and Micro Canada (the "BORROWERS") from time to time;
AND WHEREAS the Borrowers expect to make a portion of the proceeds of
the Credit Extensions available to other members of the Group, including the
Subsidiaries, in order to contribute to fulfilling the present and future
financing needs of the Group;
AND WHEREAS each member of the Group will benefit from the
implementation of the Credit Agreement by way of secure access to sources of
long-term financing on favorable terms and conditions permitting a reduced cost
of funds, currency conversion and financing arrangements on a more
cost-efficient basis, as well as other indirect benefits;
AND WHEREAS it is a condition of the Lenders' entering into the Credit
Agreement and making the initial Credit Extension thereunder that each of Micro
and the Subsidiaries enter into guaranties on the terms and conditions set
forth in the Credit Agreement;
AND WHEREAS pursuant to the Credit Agreement other subsidiaries of
Micro may be required from time to time to deliver additional guarantees
(together with the aforementioned guaranties being delivered by Micro and the
Subsidiaries, collectively the "GUARANTIES" and individually a "GUARANTY") of
the Obligations of the Borrowers under the Credit Agreement and the other Loan
Documents (Micro and its Subsidiaries in their capacity as guarantors, together
with such other Persons becoming a party to this Agreement pursuant to SECTION
4.3 hereof, the "GUARANTORS");
AND WHEREAS in order to obtain the benefits from any portion of the
proceeds of the Credit Extensions, each of the Guarantors must agree to provide
guarantees on the terms and conditions of its Guaranty, and the parties hereto
desire to confirm and acknowledge this obligation;
AND WHEREAS it is therefore necessary for each Guarantor to enter into
its Guaranty in order to obtain from the Borrowers the benefit of any portion
of the proceeds of the Credit Extensions;
AND WHEREAS the application of the Group's creditworthiness under the
Credit Agreement by means of the incorporation of unlimited guarantees of the
Guarantors results in a credit structure that enhances the creditworthiness of
the Group and permits financing to be raised on terms and conditions more
favorable to the members of the Group, including the parties hereto, than would
otherwise be possible;
AND WHEREAS in order to induce the Lenders, the Administrative Agent
and the Syndication Agent, and the Co-Agent (collectively, the "LENDER
PARTIES") to enter into the Credit Agreement and make Credit Extensions
thereunder, and to obtain the other valuable benefits and consideration
described herein, each Subsidiary has agreed to guarantee, on the terms and
conditions set forth in the relevant Guaranties, the Obligations of each
Borrower under the Credit Agreement, the Notes and each other Loan Document in
favor of the Lender Parties, and each Subsidiary expects to derive benefits,
directly or indirectly, from the proceeds of the Credit Extensions;
AND WHEREAS pursuant to the term of the Guaranties, at any time when
any Lender Party is entitled to demand payment under the Guaranties, such
Lender Party may, at its option, make demand on any one or more Guarantors and
is not obliged to make demand on any proportionate basis;
AND WHEREAS the parties hereto desire to enter into an arrangement to provide
for
EXHIBIT G-2
122
(i) indemnification by the Borrowers in favor of each Guarantor for Guarantor
Losses (as defined in SECTION 2.3 hereof) and for (ii) contribution by all
parties such that all losses, costs and expenses incurred by the Guarantors in
connection with the obligations created by the Guaranties shall be shared by
all of the Guarantors proportionately on the basis of their net asset values
and their obligations to the Borrowers as at the date such losses, costs and
expenses may be incurred;
AND WHEREAS the Credit Agreement will be governed by the laws of the
Province of Ontario, Canada; the Micro Guaranty will be governed by the laws of
the State of New York, United States of America; the Micro Canada Guaranty will
be governed by the laws of the Province of Ontario, Canada; the Micro Singapore
Guaranty will be governed by the laws of Singapore; and this Agreement and the
Coordination Center Guaranty will be governed by the laws of Belgium.
THE FOREGOING HAVING BEEN PRESENTED, the parties hereto contract and
agree as follows:
ARTICLE 1 - INTERPRETATION
1.1. DEFINITIONS. For the purposes of this Agreement:
(a) "CREDIT DOCUMENTS" shall mean the Credit Agreement,
the Notes (if any), the Loan Documents (including the Guaranties), and
each other agreement or instrument relating thereto;
(b) "NET ASSET AMOUNT" of a Guarantor at any time shall
mean the sum of its Stockholders' Equity at that time, plus the net
amount (if greater than zero) of any obligations owed by such
Guarantor to the Borrowers at that time (it being understood and
agreed that, in the case of any Guarantor that is also a Borrower,
such Guarantor shall not be considered to owe any obligation to itself
in its capacity as such Borrower);
(c) "STOCKHOLDER'S EQUITY" of a Guarantor at any time
shall mean the amount of its unconsolidated stockholders' equity as
shown on its most recent periodic financial statements
3 EXHIBIT G-2
123
prepared as of that time; and
(d) all capitalized terms used herein without definition
shall have the meanings set forth in the Credit Agreement.
1.2. INTERPRETATION NOT AFFECTED BY HEADINGS. The division of this
Agreement into sections, articles, paragraphs and other portions and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms "THIS
AGREEMENT", "HEREOF", "HEREIN", "HEREUNDER" and similar expressions refer to
this Agreement and not to any particular section, article, paragraph or other
portion hereof and include any agreement or instrument supplementary or
ancillary hereto.
1.3. GOVERNING LAW. This Agreement shall be governed and
interpreted in accordance with the laws of Belgium.
1.4. CURRENCY. Unless the contrary is expressly indicated, any
reference in this Agreement to a sum of money as of any time shall be a
reference to such sum in, or converted as of that time into, lawful money of
the United States of America, and all payments to be made hereunder shall be
made in that currency.
1.5. SCHEDULE. The following schedule annexed hereto is
incorporated herein by reference and deemed to be part hereof:
SCHEDULE A -- A form of execution copy of Credit Agreement dated as
of October 28, 1997, including the schedules and
exhibits attached thereto.
1.6. ENTIRE AGREEMENT. This Agreement, together with the Schedule,
agreements and other documents herein or therein referred to, constitutes the
entire agreement between the parties pertaining to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, between the parties with respect to the
subject matter hereof, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter hereof
except as specifically set forth herein.
1.7. DIVISIBILITY. If any obligation, covenant or provision herein
contained is determined to be invalid, illegal or unenforceable, in whole or in
part, by a court of competent jurisdiction, such determination shall not affect
or impair and shall not be deemed to affect or impair, the validity, legality
or enforceability of any other obligation, covenant or provision herein
contained and each such obligation, covenant or provision shall be interpreted
in such manner as to render them valid, legal and enforceable to the greatest
extent permitted by applicable law. Each obligation, covenant and provision of
this Agreement is hereby declared to be divisible, separate and distinct.
ARTICLE 2 - AGREEMENTS
2.1. ACKNOWLEDGMENTS. Each of the parties hereto acknowledges and
confirms:
(a) that it has received an execution copy of the Credit
Agreement and other Loan Documents, and that its financial officers
have reviewed the contents of such agreements as well
4 EXHIBIT G-2
124
as all other documents, facts and other circumstances necessary to
arrive at an informed judgment as to the advisability of entering into
its Guaranty and of the benefits obtained by implementing its
Guaranty; and
(b) that the proceeds of the Credit Extensions will be an
essential element necessary to meet its long-term financing needs,
that it expects to benefit directly and indirectly from the
implementation of the Credit Agreement and the other Loan Documents,
and that the terms and conditions of the Credit Agreement and the
other Loan Documents, including the Guarantees, will be more favorable
than any long-term financing arrangement it could negotiate on its own
behalf without the credit support of the Group.
2.2. EXECUTION OF DEFINITIVE AGREEMENTS. Subject to approval of
definitive agreements by its board of directors or other managing authority, as
applicable, each of the parties hereto covenants and agrees to execute and
deliver each Guaranty to which it is a party on the terms and conditions set
out in the Credit Agreement.
2.3. INDEMNITY OF BORROWERS. Subject to the rights of any Lender
Party under the Credit Documents (including the subordination provisions
contained therein), each Borrower hereby agrees to indemnify each Guarantor
forthwith upon demand and to hold each Guarantor harmless against any and all
losses, costs and expenses incurred by such Guarantor as a result of fulfilling
its obligations under any Guaranty provided by it ("GUARANTOR LOSSES") in
respect of the Obligations of such Borrower. Subject to SECTION 2.7, a
Guarantor that has incurred Guarantor Losses may elect to obtain the benefit of
the indemnity under this SECTION 2.3 by setting its Guarantor Losses off
against the net amount of any obligations that it may owe to any Borrower at
that time to the extent of such net amount.
2.4. GUARANTOR INDEMNITIES. Subject to the rights of any Lender
Party under the Credit Documents (including the subordination provisions
contained therein), and without in any way limiting the liabilities of any
Borrower under SECTION 2.3, each of the Guarantors jointly and severally agrees
to indemnify every other Guarantor forthwith upon demand and hold every other
Guarantor harmless against any and all Guarantor Losses incurred by such
Guarantor (an "INDEMNIFIED GUARANTOR") to the extent that such Guarantor
Losses exceed the Indemnified Guarantor's Net Asset Amount on the date such
Guarantor Losses are incurred; provided that no Guarantor shall be required to
pay an amount in respect of the indemnity set forth in this SECTION 2.4 greater
than its Net Asset Amount on such date.
2.5. SHARING LOSSES. Subject to the rights of any Lender Party
under the Credit Documents (including the subordination provisions contained
therein) and without in any way limiting the liabilities of any Borrower under
SECTION 2.3 or of the Guarantors under SECTION 2.4, each of the Guarantors
agrees that the liability for all Guarantor Losses shall be shared by the
Guarantors pro rata on the basis of each Guarantor's Net Asset Amount. For
greater certainty, following the fulfillment of obligations under the
Guaranties, including payments made under the indemnities set forth in SECTION
2.4, each Guarantor covenants and agrees to compensate the Guarantors incurring
Guarantor Losses, either directly as a result of the Guaranties or indirectly
as a result of the indemnity set forth in SECTION 2.4, by the payment of an
amount not exceeding its own Net Asset Amount (the "COMPENSATION PAYMENT") to
such Guarantors that will be sufficient, when aggregated with all other
Compensation Payments made hereunder, to ensure that no Guarantor incurs a
liability for Guarantor Losses greater than an amount equal to the product
obtained by multiplying the aggregate Guarantor Losses of all the Guarantors at
such time by a fraction the numerator of which is the Net Asset Amount of such
Guarantor and the denominator of which is the
5 EXHIBIT G-2
125
aggregate Net Asset Amounts of all the Guarantors at that time.
2.6. APPLICATION OF FUNDS. Each Borrower hereby covenants and
agrees that the proceeds from the Credit Extensions will be used for the
purpose of meeting the financing requirements of the Group, including the
Guarantors, and that funds provided out of such proceeds will be available to
support the operational and expansion needs of the Guarantors from time to
time.
2.7. NO SUBROGATION. Notwithstanding any payment or payments made
or expenses incurred by any Guarantor pursuant to this Agreement, the rights of
such a Guarantor
(a) against each Borrower (other than such Guarantor) in
respect of any and all rights of reimbursement, indemnification and
subrogation with respect to the Guaranties or any other guaranty of
the Credit Documents of any nature,
(b) against each Borrower (other than such Guarantor),
any other Guarantor or any other party hereto in respect of any and
all present and future debts and obligations of such party under this
Agreement to such Guarantor, and
(c) against each Borrower (other than such Guarantor), at
any time when an Event of Default shall have occurred and be
continuing, in respect of any and all other present and future debts
and obligations of each Borrower to such Guarantor,
(including any right of subrogation, reimbursement, exoneration or
indemnification) are hereby postponed in favor of and subordinated to (i) the
payment in full in cash of all of the obligations of each Obligor owing to all
of the Lender Parties under or with respect to the Credit Documents and (ii)
the termination of all the Commitments. If any amount shall be paid to any of
the Guarantors with respect to any of the foregoing rights prior to the
occurrence of the events described in CLAUSES (i) and (ii) of the preceding
sentence, such amount shall be deemed to have been paid to each such Guarantor
for the benefit of, and held by each such Guarantor in the name and for the
account of the Lender Parties and, in addition, shall forthwith be paid to the
Administrative Agent for the account of the Lender Parties to be credited and
applied against the obligations of such Guarantor pursuant to its Guaranty if
then matured or forthwith be repaid to the relevant Borrower if such
obligations are then unmatured.
2.8. LIABILITY UNDER THE DOCUMENTS. The provisions of this
Agreement shall in no way limit or otherwise affect the liability of any of the
Borrowers for Credit Extensions made pursuant to any of the Credit Documents.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS. Each of the
parties hereto hereby represents and warrants to each of the other parties
hereto as follows and acknowledges that each of the other parties is relying
upon such representations and warranties in connection with the matters
contemplated by this Agreement:
(a) it has not ceased to pay its creditors, nor has its
bank credit been disrupted or suspended, nor is it in any other
condition relevant to the determination of bankruptcy under the laws
of bankruptcy applicable to it; no acts or proceedings have been taken
by or against it in
6 EXHIBIT G-2
126
connection with, it has not received any notice in respect of, and it
is not in the course of liquidation, winding-up, dissolution,
bankruptcy or reorganization; and
(b) this Agreement has been validly authorized, executed
and delivered by it and is a valid and legally binding obligation of
it enforceable against it in accordance with its terms.
3.2. REPRESENTATION AND WARRANTY OF MICRO. Micro hereby represents
and warrants to each of the other parties hereto that it believes, as a result
of its independent analysis and negotiations with the Lender Parties, that
application of the Group's creditworthiness by means of the incorporation of
unlimited guarantees of the Guarantors results in a credit structure that
enhances the creditworthiness of the Group and permits financing to be raised
on terms and conditions more favorable than otherwise possible. Micro
acknowledges that each of the other parties hereto is relying upon the
foregoing representation and warranty in connection with the matters
contemplated by this Agreement.
ARTICLE 4 - GENERAL
4.1. TERM AND TERMINATION. This Agreement shall come into force
and effect as of the date hereof and shall continue in force so long as (a) any
party hereto shall have any outstanding obligation with respect to the
obligations guaranteed by the Guaranties and (b) the Commitments have not been
fully terminated.
4.2. FURTHER ASSURANCES. Each of the parties hereto shall do all
such acts and execute and deliver all such documents or instruments as may
reasonably be requested by any of the other parties hereto or their respective
counsel as may be necessary or desirable to complete the transactions
contemplated by this Agreement and to carry out its provisions.
4.3. AMENDMENT. This Agreement may not be modified or amended
except by an instrument in writing signed by all of the parties hereto or their
respective successors or permitted assigns. Notwithstanding the foregoing
sentence, the parties agree that if any Person within the Group that is not a
party hereto hereafter becomes a Guarantor pursuant to the terms of the Credit
Agreement (a "SUBSEQUENT GUARANTOR"), each of the parties hereto covenants to
cause such Subsequent Guarantor to do all such acts and execute and deliver all
such documents or instruments as may be reasonably necessary or desirable so
that such Subsequent Guarantor becomes a party to this Agreement and becomes
bound by the terms hereof. If at any time any Guarantor shall cease to be a
Guarantor during the continuation in force of this Agreement, the obligations
of such party under this Agreement shall thereupon cease.
4.4. ASSIGNMENT RESTRICTED. No party may assign this Agreement to
any other Person without the prior written consent of each of the other parties
hereto.
4.5. COUNTERPARTS. This Agreement may be executed in counterparts,
and may be executed in any number of additional counterparts by any one or more
of the parties bound hereby. A counterpart shall be deemed to be an original
and such counterparts shall together constitute the same agreement. Each party
hereto shall receive a fully executed original of this Agreement.
4.6. SCOPE. This Agreement shall be for the benefit of the parties
hereto and the Lender Parties (including the successors and assigns) and
binding upon the parties hereto and their respective
7 EXHIBIT G-2
127
successors and permitted assigns.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE(S) FOLLOWS.
8 EXHIBIT G-2
128
DONE at Santa Ana, California on the date first stated in this
Intra-Group Agreement.
XXXXXX MICRO INC., a corporation organized and XXXXXX MICRO SINGAPORE PTE LTD., a corporation
existing under the laws of the State of Delaware, organized and existing under the laws of Singapore
United States of America
By _____________________________________________ By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Executive Vice Xxxxxxx X. Xxxxxxxx, Attorney
President & Worldwide Chief Financial
Officer
XXXXXX MICRO INC., a corporation organized and INGRAM EUROPEAN COORDINATION CENTER N.V., , a
existing under the laws of the Province of company organized and existing under the laws of
Ontario, Canada The Kingdom of Belgium
By _____________________________________________ By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Authorized Xxxxxxx X. Xxxxxxxx, Authorized
Representative Representative
9 EXHIBIT G-2
129
EXHIBIT H
MICRO GUARANTY
Pursuant to THIS GUARANTY (this "GUARANTY"), dated as of October 28,
1997, XXXXXX MICRO INC., a Delaware corporation (the "GUARANTOR"), hereby
unconditionally, absolutely and irrevocably guarantees as primary obligor and
not as a surety merely, to each Lender Party (as defined below), without offset
or deduction, (a) the full and punctual payment when due of all amounts payable
by Xxxxxx Micro Inc., a corporation organized and existing under the laws of
the Province of Ontario, Canada ("MICRO CANADA"), under or in connection with
the Canadian Credit Agreement (together with all amendments and other
modifications, if any, from time to time made to it, the "CREDIT AGREEMENT";
unless otherwise defined herein all capitalized terms used herein without
definition have the meanings provided for in the Credit Agreement) dated as of
October 28, 1997, among the Guarantor, Micro Canada, certain financial
institutions (together with their respective successors and permitted assigns
and any branch or affiliate of a financial institution funding a Loan as
permitted by SECTION 5.6 of the Credit Agreement, collectively, the "LENDERS"),
The Bank of Nova Scotia, as administrative agent (in that capacity the
"ADMINISTRATIVE AGENT") for the Lenders, Royal Bank of Canada, as syndication
agent for the Lenders, and Bank of Tokyo-Mitsubishi (Canada) as co-agent (the
Lenders, the Administrative Agent, that syndication agent, and that co-agent
being, collectively, the "LENDER PARTIES"), and the other Loan Documents,
including, without limitation, all principal, interest, premiums, fees and
expenses payable by Micro Canada thereunder and all reasonable expenses
incurred by any Lender Party in enforcing any rights under the Credit
Agreement, the Notes (if any), and the other Loan Documents (including this
Guaranty) and (b) the full performance and observance of all of the covenants,
conditions and agreements provided in the Credit Agreement and each other Loan
Document required to be performed or observed by the Micro Canada (all of the
foregoing guaranteed obligations being the "GUARANTEED OBLIGATIONS"). In the
case of a failure of Micro Canada punctually to make any payment of principal
of or interest or premium on any Credit Extension or Note, the Guarantor hereby
agrees to cause any such payment to be made punctually when and as the same
shall become due and payable, whether at the stated maturity, on a prepayment
date, by declaration of acceleration, or otherwise, as if such payment were
made by Micro Canada. This Guaranty constitutes a guaranty of payment and not
a guaranty of collection. The obligations and agreements of the Guarantor
hereunder shall be performed and observed without requiring any notice of
nonpayment, non-performance or non-observance, or any proof thereof or demand
therefor, all of which the Guarantor hereby expressly waives.
The Guarantor and Micro Canada are engaged as an integrated group in
diversified operations including wholesale distribution of microcomputer
software and hardware products, multimedia products, customer financing,
assembly and configuration and other related wholesaling, distribution and
service activities. This integrated operation requires financing on such basis
that credit supplied to the Guarantor and Micro Canada be made available from
time to time to the other Subsidiaries of the Guarantor, separately, and as an
integrated operation as a whole. To induce the Lender Parties to enter into
the Credit Agreement and make Credit Extensions pursuant thereto, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Guarantor has agreed to guarantee, on the terms and
conditions set forth herein, the obligations of Micro Canada under the Credit
Agreement, the Notes (if any), and each other Loan Document, and the Guarantor
expects to derive benefit, directly or indirectly, from the Credit Extensions
made to Micro Canada from time to time.
SECTION 1. CONSENTS AND WAIVERS BY GUARANTOR. (a) This Guaranty
shall be binding upon
2 EXHIBIT H
130
the Guarantor, its successors and assigns, and shall remain in full force and
effect irrespective of, and shall not be terminated by, the existence of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting the terms of the Credit Agreement, any Note, any other Loan Document
or any other agreement or instrument relating thereto (the foregoing
agreements, documents and instruments being, collectively, the "CREDIT
DOCUMENTS"), or the rights or obligations of any Obligor under or with respect
to any of the Credit Documents. The liability of the Guarantor under this
Guaranty shall be absolute, unconditional and irrevocable irrespective of:
(i) any lack of validity or enforceability of any
Obligor's obligations under or with respect to any Credit Document;
(ii) any change, whether or not agreed to by the Lender
Parties, in the time, manner or place of payment of, or in any other
term of, all or any of the Credit Documents or any other amendment,
renewal, extension, acceleration, compromise or waiver of or any
consent or departure from the terms of provisions of any of the Credit
Documents;
(iii) the lack of power or authority of any of the Obligors
to execute and deliver any of the Credit Documents, any set-off or
counterclaim which may at any time be available to or asserted by any
Obligor against any Lender Party with respect to such Obligor's
obligations under any of the Credit Documents; the existence or
continuance of any Obligor as a legal entity; the consolidation or
merger of any Obligor with or into any other corporation, or the sale,
lease or other disposition by any Obligor of all or substantially all
of its assets to any other business entity, whether or not effected in
compliance with the provisions of the Credit Agreement; or the
bankruptcy or insolvency of any Obligor, the admission in writing by
any Obligor of its inability to pay its debts as they mature, or the
making by any Obligor of a general assignment for the benefit of, or
entering into a composition or arrangement with, creditors;
(iv) any act, failure to act, delay or omission whatsoever
on the part of any Lender Party, including, without limitation, any
failure to demand, delay in demanding or rescission of a demand for
any payment under any of the Credit Documents or any failure to give
to any Obligor (including the Guarantor) notice of default in the
making of any payment due and payable under any of the Credit
Documents or performance of any covenant, condition or agreement
contained in any of the Credit Documents or any action taken by any
Lender Party in the exercise, either in whole or in part, of any right
or power conferred by any of the Credit Documents or the failure,
delay or omission by any Lender Party to exercise any such right or
power;
(v) except in each case by a written amendment, waiver,
consent, release, or termination executed and delivered by the
Administrative Agent or other appropriate Lender Party pursuant to
SECTION 7(b) of this Guaranty, SECTION 11.1(b) of the Credit
Agreement, or both, as applicable, any invalidation of any of the
obligations of the Guarantor hereunder or the repudiation of this
Guaranty by the Guarantor, whether or not under color of right, or any
act, failure to act, delay or omission whatsoever on the part of any
Lender Party with respect to the Guarantor's obligations hereunder,
including, without limitation, any termination of the obligations of
the Guarantor hereunder, any amendment, compromise or waiver of or any
consent or departure from the terms or provisions of this Guaranty
with respect to the Guarantor or any release of the Guarantor from
liability hereunder;
3 EXHIBIT H
131
(vi) except in each case by a written amendment, waiver,
consent, release, or termination executed and delivered by the
Administrative Agent or other appropriate Lender Party pursuant to
SECTION 7(B) of this Guaranty, SECTION 11.1(b) of the Credit
Agreement, or both, as applicable, any release, discharge,
modification or exchange of any property pledged or mortgaged or in
which a security interest has been granted as collateral for the
Guaranteed Obligations, or any amendment or termination of or consent
or waiver under any agreement or instrument now or hereafter providing
for granting, pledging, mortgaging or conveying collateral for the
Guaranteed Obligations; and
(vii) any other circumstance which might otherwise
constitute a defense available to, or legal or equitable discharge of,
Micro Canada or any other Obligor;
it being the purpose and intent of this Guaranty that the obligations of the
Guarantor hereunder shall be absolute, unconditional and irrevocable and shall
not be discharged or terminated except by full and complete performance of all
of the Guaranteed Obligations.
(b) The Guarantor agrees that it is directly and primarily liable
to the Lender Parties, that the obligations hereunder are independent of the
obligations of Micro Canada and any other Obligor, and that a separate action
or actions may be brought and prosecuted against the Guarantor, whether or not
an action is brought against Micro Canada or any other Obligor, or whether
Micro Canada or any other Obligor is joined in any such action or actions. The
Guarantor agrees that any releases which may be given by the Lender Parties to
Micro Canada or any other Obligor or endorser shall not release it from this
Guaranty.
(c) The Guarantor does hereby waive and relinquish, so far as it
may lawfully and effectively do so, the benefit and advantage of any and all
valuation, stay, appraisement, extension or redemption law or laws now in
effect or hereafter enacted. and also waives promptness, diligence, notice of
acceptance, default, dishonor, non-payment, non-performance or any other notice
to or upon either Micro Canada or the Guarantor.
SECTION 2. NO SUBROGATION. (a) Any and all present and future
debts and obligations of Micro Canada to the Guarantor, including rights of
reimbursement and subrogation, are hereby postponed in favor of and
subordinated to the payment in full in cash of all of the Guaranteed
Obligations and termination of all the Commitments; provided that the payment
of such present and future debts other than those due by virtue of rights of
reimbursement and subrogation with respect to this Guaranty shall be so
postponed and subordinated only if an Event of Default shall have occurred and
be continuing.
(b) Notwithstanding any payment or payments made or expenses
incurred by the Guarantor pursuant to this Guaranty, the Guarantor shall not be
subrogated, in whole or in part, to the rights of the Lender Parties against
Micro Canada under the Credit Documents until the Guaranteed Obligations shall
have been paid in cash in full and the Commitments shall have terminated. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, such amount shall be deemed to have been paid to the Guarantor for
the benefit of, and held in trust for, the Lender Parties and, in addition,
shall forthwith be paid to the Administrative Agent for the account of the
Lender Parties to be credited and applied upon the Guaranteed Obligations if
then matured or forthwith be repaid to Micro Canada if such obligations are
then unmatured. The Guarantor hereby agrees that, as between itself on the one
hand and the Lender Parties on the other hand, the Guaranteed Obligations may
be declared to be forthwith due and payable
4 EXHIBIT H
132
notwithstanding any stay, injunction or other prohibition preventing such
declaration as against Micro Canada and that, in the event of any such
declaration, the Guaranteed Obligations (whether or not then due add payable by
Micro Canada) shall forthwith become due and payable by the Guarantor for
purposes of this Guaranty.
SECTION 3. REINSTATEMENT OF GUARANTY. This Guaranty shall
continue to be effective, or be reinstated, as the case may be, if at any time
any payment, or any part thereof, of any of the Guaranteed Obligations is
rescinded or must otherwise be restored or returned by any Lender Party upon
the insolvency, bankruptcy or reorganization of Micro Canada, the Guarantor or
any other Obligor or otherwise, all as though such payment had not been made.
SECTION 4. RIGHTS OF CONTRIBUTION. The Guarantor and each other
Person providing a Guaranty pursuant to the Credit Agreement from time to time,
including those Persons executing the Acknowledgment to this Guaranty
(collectively, the "GROUP GUARANTORS"), hereby agree, as among themselves and
for the benefit of each of them. that if any Guarantor (in such capacity, an
"EXCESS FUNDING GUARANTOR") shall make any payment in respect of any of the
Guaranteed Obligations hereunder (a "GUARANTEE PAYMENT") as a result of which
such Excess Funding Guarantor shall have paid more than its Pro Rata Share (as
defined below) of the Guaranteed Obligations, each other Group Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence
hereof), pay to such Excess Funding Guarantor an amount equal to such Group
Guarantor's Pro Rata Share of such Guarantee Payment. The payment obligation
of any Group Guarantor to any Excess Funding Guarantor under this SECTION 4
shall be subordinate and subject to the prior payment in full in cash of the
Guaranteed Obligations (in favor of the Lender Parties) and termination of all
the Commitments and such Excess Funding Guarantor shall not exercise any right
or remedy with respect to such excess until all of the foregoing shall have
occurred. For the purposes hereof, "PRO RATA SHARE" shall mean, for any Group
Guarantor, the ratio (expressed as a percentage and determined as of the date
of the most recent financial statements provided to the Lender Parties pursuant
to CLAUSE (a) or (b) of SECTION 8.1.1. of the Credit Agreement) of (a) the sum
of the unconsolidated stockholders equity of such Group Guarantor plus the net
amount (if greater than zero) of any obligations owed by such Group Guarantor
to all the Borrowers to (b) the sum of the unconsolidated stockholders equity
of all the Group Guarantors plus the net amount (if greater than zero) of any
obligations owed by all the Group Guarantors to all the Borrowers (it being
understood and agreed that, in the case of any Group Guarantor that is also a
Borrower, such Group Guarantor shall not be considered to owe any obligation to
itself in its capacity as such Borrower).
SECTION 5. ASSIGNMENT; SUCCESSORS. This Guaranty is a
continuing guaranty and shall be binding upon the Guarantor and its successors
and assigns. This Guaranty shall inure to the benefit of each Under Party and
its successors and assigns and shall be considered to be assigned upon the
assignment or transfer by any Lender Party of its Notes and other rights and
obligations under the Credit Agreement and other Loan Documents without
requiring any act of or consent or acknowledgment from the Guarantor. In
furtherance of the foregoing, the Guarantor shall execute and deliver to any
assignee or transferee of any Lender Party such additional counterparts of this
Guaranty as any such Lender Party may request in writing at any time and from
time to time.
SECTION 6. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
GUARANTY SHALL BE GOVERNED BY AND ITS PROVISIONS CONSTRUED UNDER THE LAWS OF
THE STATE OF NEW YORK, ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS
5 EXHIBIT H
133
GUARANTY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN), OR ACTIONS OF THE LENDER PARTIES OR THE GUARANTOR PURSUANT TO THIS
GUARANTY SHALL BE BROUGHT AND MAINTAINED, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN SUCH
LITIGATION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE
GUARANTOR AT ITS ADDRESS SPECIFIED PURSUANT TO SECTION 11.2 OF THE CREDIT
AGREEMENT, IN EACH CASE MARKED FOR THE ATTENTION OF GENERAL COUNSEL, XXXXXX
MICRO INC., OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK IN
THE MANNER PERMITTED BY THE LAWS OF EACH SUCH STATE. THE GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
SECTION 7. MISCELLANEOUS PROVISIONS.
(a) This Guaranty is a Loan Document executed pursuant to the
Credit Agreement and shall (unless otherwise expressly indicated herein) be
construed, administered and applied in accordance with the terms and provisions
thereof, including, without limitation, SECTION 5.11 and ARTICLE XI thereof.
(b) No amendment to or waiver of any provision of this Guaranty,
nor consent to any departure by the Guarantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Administrative
Agent on behalf of the Lender Parties, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(c) All notices and other communications provided to any party
hereto shall be made in the manner, and subject to the provisions set forth in
SECTION 11.2 of the Credit Agreement.
(d) Section captions used in this Guaranty are for convenience of
reference only, and shall not affect the construction of this Guaranty.
(e) In addition to, and not in limitation of, any rights of any
Lender Party under applicable law, each Lender Party shall, upon the occurrence
and during the continuance of any Default described in any of CLAUSES (a)
through (d) of SECTION 9.1.9. of the Credit Agreement (after providing notice
to the Guarantor with respect thereto) or any Event of Default, have the right,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final), credits,
accounts or moneys of the Guarantor to the payment of the obligations of the
Guarantor that are at such time due and owing to it hereunder, irrespective of
whether or not such Lender Party shall have
6 EXHIBIT H
134
made any demand under any Loan Document.
(f) Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision of the
remaining provisions of this Guaranty.
SECTION 8. WAIVER OF JURY TRIAL. THE LENDER PARTIES AND THE
GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
LENDER PARTIES OR THE GUARANTOR, THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF THIS GUARANTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER PARTIES ENTERING INTO THE CREDIT AGREEMENT AND MAKING
CREDIT EXTENSIONS THEREUNDER.
SECTION 9. ACKNOWLEDGMENT AND AGREEMENT OF OTHER GUARANTORS. By
executing the acknowledgment to this Guaranty each of the other Group
Guarantors agrees to be fully bound by the terms of SECTION 4 hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES TO FOLLOW.]
7 EXHIBIT H
135
IN WITNESS WHEREOF, the undersigned corporation has caused this
Guaranty to be executed on its behalf as of the date above written by one of
its officers duly authorized thereunto.
XXXXXX MICRO INC., a corporation organized and
existing under the laws of the State of
Delaware, United States of America
By _________________________________________
Xxxxxxx X. Xxxxxxxx, Executive Vice
President, & Worldwide Chief Financial
Officer
ACKNOWLEDGED AND AGREED TO THE TERMS OF SECTION 4:
INGRAM EUROPEAN COORDINATION CENTER N.V., a XXXXXX MICRO SINGAPORE PTE LTD., a corporation
company organized and existing under the laws of organized and existing under the laws of Singapore
The Kingdom of Belgium
By _____________________________________________ By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Authorized Xxxxxxx X. Xxxxxxxx, Attorney
Representative
XXXXXX MICRO INC., a corporation organized and
existing under the laws of the Province of
Ontario, Canada
By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Authorized Representative
8 EXHIBIT H
136
EXHIBIT I-1
MICRO CANADA GUARANTY (MICRO)
Pursuant to THIS GUARANTY (this "GUARANTY" dated as of October
28, 1997, XXXXXX MICRO INC., an Ontario, Canada corporation
(the "GUARANTOR"), hereby unconditionally, absolutely and
irrevocably guarantees as primary obligor and not as a surety
merely, to each Lender Party (as defined below), without
offset or deduction, (a) the full and punctual payment when
due of all amounts payable by Xxxxxx Micro Inc., a corporation
organized and existing under the laws of State of Delaware,
U.S.A. ("MICRO"), under or in connection with the Canadian
Credit Agreement (together with all amendments and other
modifications, if any, from time to time made to it, the
"CREDIT AGREEMENT"; unless otherwise defined herein all
capitalized terms used herein without definition have the
meanings provided for in the Credit Agreement) dated as of
October 28, 1997, among Micro, the Guarantor, certain
financial institutions (together with their respective
successors and permitted assigns and any branch or affiliate
of a financial institution funding a Loan as permitted by
SECTION 5.6 of the Credit Agreement, collectively, the
"LENDERS"), The Bank of Nova Scotia, as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT") for the
Lenders, Royal Bank of Canada, as syndication agent for the
Lenders, and Bank of Tokyo-Mitsubishi (Canada) as co-agent,
the Lenders, the Administrative Agent, that syndication agent,
and that co- agent being, collectively, the "LENDER PARTIES"),
and the other Loan Documents, including, without limitation,
all principal, interest, premiums, fees and expenses payable
by Micro thereunder and all reasonable expenses incurred by
any Lender Party in enforcing any rights under the Credit
Agreement, the Notes (if any), and the other Loan Documents
(including this Guaranty) and (b) the full performance and
observance of all of the covenants, conditions and agreements
provided in the Credit Agreement and each other Loan Document
required to be performed or observed by Micro (all of the
foregoing guaranteed obligations being the "GUARANTEED
OBLIGATIONS"). In the case of a failure of Micro punctually to
make any payment of principal of or interest or premium on any
Credit Extension or Note, the Guarantor hereby agrees
EXHIBIT I-1
137
to cause any such payment to be made punctually when and as
the same shall become due and payable, whether at the stated
maturity, on a prepayment date, by declaration of
acceleration, or otherwise, as if such payment were made by
Micro. This Guaranty constitutes a guaranty of payment and not
a guaranty of collection. The obligations and agreements of
the Guarantor hereunder shall be performed and observed
without requiring any notice of non-payment, non-performance
or non-observance, or any proof thereof or demand therefor,
all of which the Guarantor hereby expressly waives.
The Guarantor and Micro are engaged as an integrated group in
diversified operations including wholesale distribution of
microcomputer software and hardware products, multimedia
products, customer financing, assembly and configuration and
other related wholesaling, distribution and service
activities. This integrated operation requires financing on
such basis that credit supplied to the Guarantor and Micro be
made available from time to time to the other Subsidiaries of
Micro, separately, and as an integrated operation as a whole.
To induce the Lender Parties to enter into the Credit
Agreement and make Credit Extensions pursuant thereto, and for
other good and valuable consideration. the receipt and
sufficiency of which are hereby acknowledged, the Guarantor
has agreed to guarantee, on the terms and conditions set forth
herein, the obligations of Micro under the Credit Agreement,
the Notes (if any), and each other Loan Document, and the
Guarantor expects to derive benefit, directly or indirectly,
from the Credit Extensions made to Micro from time to time.
SECTION 1. CONSENTS AND WAIVERS BY GUARANTOR. (a) This Guaranty shall
be binding upon the Guarantor, its successors and assigns, and shall remain in
full force and effect irrespective of, and shall not be terminated by, the
existence of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting the terms of the Credit Agreement, any Note, any other
Loan Document or any other agreement or instrument relating thereto (the
foregoing agreements, documents and instruments being, collectively, the
'Credit Documents"), or the rights or obligations of any Obligor under or with
respect to any of the Credit Documents. The liability of the Guarantor under
this Guaranty shall be absolute, unconditional and irrevocable irrespective of:
(i) any lack of validity or enforceability of any Obligor's
obligations under or with respect to any Credit Document;
EXHIBIT I-1
138
(ii) any change, whether or not agreed to by the Lender
Parties, in the time, manner or place of payment of, or in any other
term of, all or any of the Credit Documents or any other amendment,
renewal, extension, acceleration, compromise or waiver of or any
consent or departure from the terms or provisions of any of the Credit
Documents;
(iii) the lack of power or authority of any of the Obligors
to execute and deliver any of the Credit Documents, any set-off or
counterclaim which may at any time be available to or asserted by any
Obligor against any Lender Party with respect to such Obligor's
obligations under any of the Credit Documents; the existence or
continuance of any Obligor as a legal entity; the consolidation or
merger of any Obligor with or into any other corporation, or the sale,
lease or other disposition by any Obligor of all or substantially all
of its assets to any other business entity, whether or not effected in
compliance with the provisions of the Credit Agreement; or the
bankruptcy or insolvency of any Obligor, the admission in writing by
any Obligor of its inability to pay its debts as they mature, or the
making by any Obligor of a general assignment for the benefit of, or
entering into a composition or arrangement with, creditors;
(iv) any act, failure to act, delay or omission whatsoever
on the part of any Lender Party, including, without limitation, any
failure to demand, delay in demanding or rescission of a demand for
any payment under any of the Credit Documents or any failure to give
to any Obligor (including the Guarantor) notice of default in the
making of any payment due and payable under any of the Credit
Documents or performance of any covenant, condition or agreement
contained in any of the Credit Documents or any action taken by any
Lender Party in the exercise, either in whole or in part, of any right
or power conferred by any of the Credit Documents or the failure,
delay or omission by any Lender Party to exercise any such right or
power;
(v) except in each case by a written amendment, waiver,
consent, release, or termination executed and delivered by the
Administrative Agent or other appropriate Lender Party pursuant to
SECTION 7(B) of this Guaranty, SECTION 11.1(b) of the Credit
Agreement, or both, as applicable, any invalidation of any of the
obligations of the Guarantor hereunder or the repudiation of this
Guaranty by the Guarantor, whether or not under color of right, or any
act, failure to act, delay or omission whatsoever on the part of any
Lender Party with respect to the Guarantor's obligations hereunder,
including, without limitation, any termination of the obligations of
the Guarantor hereunder, any amendment, compromise or waiver of or any
consent or departure from the terms or provisions of this Guaranty
with respect to the Guarantor or any release of the Guarantor from
liability hereunder;
(vi) except in each case by a written amendment, waiver,
consent, release, or termination executed and delivered by the
Administrative Agent or other appropriate Lender Party pursuant to
SECTION 7(b) of this Guaranty, SECTION 11.1(b) of the Credit
Agreement, or both, as applicable, any release, discharge,
modification or exchange of any property pledged or mortgaged or in
which a security interest has been granted as collateral for the
Guaranteed Obligations, or any amendment or termination of or consent
or waiver under any agreement or instrument now or hereafter providing
for granting, pledging, mortgaging or conveying collateral for the
Guaranteed Obligations; and
(vii) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, Micro or any other Obligor;
4 EXHIBIT I-1
139
it being the purpose and intent of this Guaranty that the obligations of the
Guarantor hereunder shall be absolute, unconditional and irrevocable and shall
not be discharged or terminated except by full and complete performance of all
of the Guaranteed Obligations.
(b) The Guarantor agrees that it is directly and primarily liable
to the Lender Parties, that the obligations hereunder are independent of the
obligations of Micro and any other Obligor, whether or not an action is brought
against Micro or any other Obligor, or whether Micro or any other Obligor is
joined in any such action or actions. The Guarantor agrees that any releases
which may be given by the Lender Parties to Micro or any other Obligor or
endorser shall not release it from this Guaranty.
(c) The Guarantor does hereby waive and relinquish, so far as it
may lawfully and effectively do so, the benefit and advantage of any and all
valuation, stay, appraisement, extension or redemption law or laws now in
effect or hereafter enacted, and also waives promptness, diligence, notice of
acceptance, default, dishonor, non-payment, non-performance or any other notice
to or upon Micro or the Guarantor.
SECTION 2. NO SUBROGATION. (a) Any and all present and future debts
and obligations of Micro to the Guarantor, including rights of reimbursement
and subrogation, are hereby postponed in favor of and subordinated to the
payment in full in cash of all of the Guaranteed Obligations and termination of
all the Commitments; provided, however, that the payment of such present and
future debts other than those due by virtue of rights of reimbursement and
subrogation with respect to this Guaranty shall be so postponed and
subordinated only if an Event of Default shall have occurred and be continuing.
(b) Notwithstanding any payment or payments made or expenses
incurred by the Guarantor pursuant to this Guaranty, the Guarantor shall not be
subrogated, in whole or in part, to the rights of the Lender Parties against
Micro under the Credit Documents until the Guaranteed Obligations shall have
been paid in cash in full and the Commitments shall have terminated. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
such amount shall be deemed to have been paid to the Guarantor for the benefit
of, and held in trust for, the Lender Parties and, in addition, shall forthwith
be paid to the Administrative Agent for the account of the Lender Parties to be
credited and applied upon the Guaranteed Obligations if then matured or
forthwith be repaid to Micro if such obligations are then unmatured. The
Guarantor hereby agrees that, as between itself on the one hand and the Lender
Parties on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable notwithstanding any stay, injunction or other
prohibition preventing such declaration as against Micro and that, in the event
of any such declaration, the Guaranteed Obligations (whether or not then due
and payable by Micro) shall forthwith become due and payable by the Guarantor
for purposes of this Guaranty.
SECTION 3. REINSTATEMENT OF GUARANTY. This Guaranty shall continue
to be effective, or be reinstated, as the case may be, if at any time any
payment, or any part thereof, of any of the Guaranteed Obligations is rescinded
or must otherwise be restored or returned by any Lender Party upon the
insolvency, bankruptcy or reorganization of Micro, the Guarantor or any other
Obligor or otherwise, all as though such payment had not been made.
SECTION 4. RIGHTS OF CONTRIBUTION. The Guarantor and each other
Person providing a Guaranty pursuant to the Credit Agreement from time to time,
including those Persons executing the Acknowledgment to this Guaranty
(collectively, the "GROUP GUARANTORS"), hereby agree, as among
5 EXHIBIT I-1
140
themselves and for the benefit of each of them, that if any Guarantor (in such
capacity, an "EXCESS FUNDING GUARANTOR") shall make any payment in respect of
any of the Guaranteed Obligations hereunder (a "GUARANTEE PAYMENT") as a result
of which such Excess Funding Guarantor shall have paid more than its Pro Rata
Share (as defined below) of the Guaranteed Obligations, each other Group
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
next sentence hereof), pay to such Excess Funding Guarantor an amount equal to
such Group Guarantor's Pro Rata Share of such Guarantee Payment. The payment
obligation of any Group Guarantor to any Excess Funding Guarantor under this
SECTION 4 shall be subordinate and subject to the prior payment in full in cash
of the Guaranteed Obligations (in favor of the Lender Parties) and termination
of all the Commitments and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until all of the foregoing shall
have occurred. For the purposes hereof, "PRO RATA SHARE" shall mean, for any
Group Guarantor, the ratio (expressed as a percentage and determined as of the
date of the most recent financial statements provided to the Lender Parties
pursuant to CLAUSE (a) or (b) of SECTION 8.1.1 of the Credit Agreement) of (a)
the sum of the unconsolidated stockholders equity of such Group Guarantor plus
the net amount (if greater than zero) of any obligations owed by such Group
Guarantor to the Borrowers to (b) the sum of the unconsolidated stockholders
equity of all the Group Guarantors plus the net amount (if greater than zero)
of any obligations owed by all the Group Guarantors to all the Borrowers (it
being understood and agreed that, in the case of any Group Guarantor that is
also a Borrower, such Group Guarantor shall not be considered to owe any
obligation to itself in its capacity as such Borrower).
SECTION 5. ASSIGNMENT; SUCCESSORS. This guaranty is a continuing
guaranty and shall be binding upon the Guarantor and its successors and
assigns. This guaranty shall inure to the benefit of each Lender Party and its
successors and assigns and shall be considered to be assigned upon the
assignment or transfer by any Lender Party of its Notes and other rights and
obligations under the Credit Agreement and other Loan Documents without
requiring any act of or consent or acknowledgment from the Guarantor. In
furtherance of the foregoing, the Guarantor shall execute and deliver to any
assignee or transferee of any Lender Party such additional counterparts of this
Guaranty as any such Lender Party may request in writing at any time and from
time to time.
SECTION 6. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Guaranty
shall be governed by and its provisions construed under the laws of the
Province of Ontario, Canada. Any litigation based hereon, or arising out of,
under, or in connection with, this Guaranty or any course of conduct, course of
dealing, statements (whether oral or written) or actions of the Lender Parties
or the Guarantor pursuant to this Guaranty shall be brought and maintained, to
the extent permitted by applicable law, exclusively in the courts of the State
of New York, U.S.A., the United States District Court for the Southern District
of New York or the courts of the province of Ontario. The Guarantor hereby
expressly and irrevocably submits to the jurisdiction of the aforementioned
courts for the purpose of any such litigation as set forth above and, in the
case of the courts of the State of New York and the United States District
Court for the Southern District of New York, irrevocably consents to the
service of any and all process in such litigation or proceeding by the mailing
of copies of such process to the Guarantor at its address specified pursuant to
SECTION 11.2 of the Credit Agreement, in each case marked for the attention of
General Counsel, Xxxxxx Micro Inc. (Delaware), or by personal service within
or without the State of New York in the manner permitted by the laws of each
such jurisdiction. The Guarantor hereby expressly and irrevocably waives, to
the fullest extent permitted by law, any objection which it may have or
hereafter may have to the laying of venue of any such litigation brought in any
such court referred to above and any claim that any such litigation has been
brought in an inconvenient forum. To the extent that the
6 EXHIBIT I-1
141
Guarantor has or hereafter may acquire any immunity from jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution or otherwise) with respect to
itself or its property, the Guarantor hereby irrevocably waives such immunity
in respect of its obligations under this Guaranty.
SECTION 7. MISCELLANEOUS PROVISIONS.
(a) This Guaranty is a Loan Document executed pursuant to
the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including, without limitation, SECTION
5.11 and ARTICLE XI thereof.
(b) No amendment to or waiver of any provision of this
Guaranty, nor consent to any departure by the Guarantor herefrom,
shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent on behalf of the Lender
Parties, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
(c) All notices and other communications provided to any
party hereto shall be made in the manner, and subject to the
provisions set forth in SECTION 11.2 of the Credit Agreement.
(d) Section captions used in this guaranty are for
convenience of reference only, and shall not affect the construction
of this Guaranty.
(e) In addition to, and not in limitation of, any rights
of any Lender Party under applicable law, each Lender Party shall,
upon the occurrence and during the continuance of any Default
described in any of CLAUSES (a) through (d) of SECTION 9.1.9 of the
Credit Agreement (after providing notice to the Guarantor with respect
thereto) or any Event of Default, have the right, to the fullest
extent permitted by law, to set off and apply any all deposits
(general or special, time or demand, provisional or final), credits,
accounts or moneys of the Guarantor to the payment of the obligations
of the Guarantor that are at such time due and owing to it hereunder,
irrespective of whether or not such Lender Party shall have made any
demand under any Loan Document.
(f) Wherever possible each provision of this guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this guaranty shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision of the remaining
provisions of this Guaranty.
SECTION 8. ACKNOWLEDGMENT AND AGREEMENT OF OTHER GUARANTORS. By
executing the acknowledgment to this guaranty each of the other Group Guarantors
agrees to be fully bound by the terms of SECTION 4 hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES TO FOLLOW.]
7 EXHIBIT I-1
142
IN WITNESS WHEREOF, the undersigned corporation has caused this
Guaranty to be executed on its behalf as of the date above written by one of
its officers duly authorized thereunto.
XXXXXX MICRO INC., a corporation organized and
existing under the laws of the Province of Ontario,
Canada
By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Authorized Representative
ACKNOWLEDGED AND AGREED TO THE TERMS OF SECTION 4:
XXXXXX MICRO SINGAPORE PTE LTD., a corporation XXXXXX MICRO INC., a corporation organized and
organized and existing under the laws of Singapore existing under the laws of the State of Delaware,
United States of America
By _____________________________________________ By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Attorney Xxxxxxx X. Xxxxxxxx, Executive Vice
President, & Worldwide Chief Financial
Officer
INGRAM EUROPEAN COORDINATION
CENTER, N.V., a company organized and existing
under the laws of The Kingdom of Belgium
By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Authorized Representative
8 EXHIBIT I-1
143
EXHIBIT I-2
MICRO SINGAPORE GUARANTY
Pursuant to THIS GUARANTY (this "GUARANTY"), dated as of October 28, 1997,
XXXXXX MICRO SINGAPORE PTE LTD., a company organized and existing under the
laws of Singapore (the "GUARANTOR"), hereby unconditionally, absolutely and
irrevocably Guarantees as primary obligor and not as a surety merely, to each
Lender Party (as defined below), without offset or deduction, (a) the full and
punctual payment when due of all amounts payable by Xxxxxx Micro Inc., a
corporation organized and existing under the laws of State of Delaware, U.S.A.
("MICRO"), and Xxxxxx Micro Inc., a company established under the laws of
Ontario, Canada ("MICRO CANADA"), (the "COVERED BORROWERS"), under or in
connection with the Canadian Credit Agreement, (together with all amendments
and other modifications, if any, from time to time made thereto, the "CREDIT
AGREEMENT"; unless otherwise defined herein all capitalized terms used herein
without definition have the meanings provided for in the Credit Agreement)
dated as of October 28, 1997, among the Covered Borrowers, certain financial
institutions (together with their respective successors and permitted assigns
and any branch or affiliate of a financial institution funding a Loan as
permitted by SECTION 5.6 of the Credit Agreement, collectively, the "LENDERS"),
The Bank of Nova Scotia, as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the Lenders, Royal Bank of Canada, as syndication
agent for the Lenders, and Bank of Tokyo-Mitsubishi (Canada) as co-agent (the
Lenders, the Administrative Agent, that syndication agent, and that co-agent
being, collectively, the "LENDER PARTIES"), and the other Loan Documents,
including, without limitation, all principal, interest, premiums, fees and
expenses payable by the Covered Borrowers thereunder and all reasonable
expenses incurred by any Lender Party in enforcing any rights under the Credit
Agreement, the Notes (if any), and the other Loan Documents (including this
Guaranty) and (b) the full performance and observance of all of the covenants,
conditions and agreements provided in the Credit Agreement and each other Loan
Document required to be performed or observed by the Covered Borrowers (all of
the foregoing guaranteed obligations being the "GUARANTEED OBLIGATIONS"). In
the case of a failure of any Covered Borrower punctually to make any payment of
principal of or interest or premium on any Credit Extension or Note, the
Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at the stated maturity,
on a prepayment date, by declaration of acceleration, or otherwise, as if such
payment were made by such Covered Borrower. This Guaranty constitutes a
guaranty of payment and not a guaranty of collection. The obligations and
agreements of the Guarantor hereunder shall be performed and observed without
requiring any notice of non-payment, nonperformance or non-observance, or any
proof thereof or demand therefor, all of which the Guarantor hereby expressly
waives.
The Guarantor and each of the Covered Borrowers are engaged as an
integrated group in diversified operations including wholesale distribution of
microcomputer software and hardware products, multimedia products, customer
financing, assembly and configuration and other related wholesaling,
distribution and service activities. This integrated operation requires
financing on such basis that credit supplied to the Guarantor and the Covered
Borrowers be made available from time to time to the other Subsidiaries of
Micro, separately, and as an integrated operation as a whole. To induce the
Lender Parties to enter into the Credit Agreement and make Credit Extensions
pursuant thereto, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Guarantor has agreed to
guarantee, on the terms and conditions set forth herein, the obligations of the
Covered Borrowers under the Credit Agreement, the Notes and each other Loan
Document, and the Guarantor expects to derive benefit, directly or indirectly,
from the Credit Extensions made to the
EXHIBIT I-2
144
Covered Borrowers from time to time.
SECTION 1. CONSENTS AND WAIVERS BY GUARANTOR.
(a) This Guaranty shall be binding upon the guarantor, its successors and
assigns, and shall remain in full force and effect irrespective of, and shall
not be terminated by, the existence of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting the terms of the Credit
Agreement, any Note, any other Loan Document, or any other agreement or
instrument relating thereto (the foregoing agreements, documents and
instruments being, collectively, the "CREDIT DOCUMENTS"), or the rights or
obligations of any Obligor under or with respect to any of the Credit
Documents. The liability of the Guarantor under this Guaranty shall be
absolute, unconditional and irrevocable irrespective of:
(i) any lack of validity or enforceability of any Obligor's
obligations under or with respect to any Credit Document;
(ii) any change, whether or not agreed to by the Lender Parties, in
the time, manner or place of payment of, or in any other term of, all or
any of the Credit Documents or any other amendment, renewal, extension,
acceleration, compromise or waiver of or any consent or departure from the
terms or provisions of any of the Credit Documents;
(iii) the lack of power or authority of any of the Obligors to
execute and deliver any of the Credit Documents, any set-off or
counterclaim which may at any time be available to or asserted by any
Obligor against any Lender Party with respect to such Obligor's
obligations under any of the Credit Documents; the existence or
continuance of any Obligor as a legal entity; the consolidation or merger
of any Obligor with or into any other corporation, or the sale, lease or
other disposition by any Obligor of all or substantially all of its
assets to any other business entity, whether or not effected in compliance
with the provisions of the Credit Agreement; or the bankruptcy or
insolvency of any Obligor, the admission in writing by any Obligor of its
inability to pay its debts as they mature, or the making by any Obligor of
a general assignment for the benefit of, or entering into a composition or
arrangement with, creditors;
(iv) any act, failure to act, delay or omission whatsoever on the
part of any Lender Party, including, without limitation, any failure to
demand, delay in demanding or rescission of a demand for any payment under
any of the Credit Documents or any failure to give to any Obligor
(including the Guarantor) notice of default in the making of any payment
due and payable under any of the Credit Documents or performance of any
covenant, condition or agreement contained in any of the Credit Documents
or any action taken by any Lender Party in the exercise, either in whole
or in part, of any right or power conferred by any of the Credit Documents
or the failure, delay or omission by any Lender Party to exercise any such
right or power;
(v) except in each case by a written amendment, waiver, consent,
release, or termination executed and delivered by the Administrative Agent
or other appropriate Lender Party pursuant to SECTION 7(b) of this
Guaranty, SECTION 11.1(b) of the Credit Agreement, or both, as applicable,
any invalidation of any of the obligations of the Guarantor hereunder or
the repudiation of this Guaranty by the Guarantor, whether or not under
color of right, or any act, failure to act, delay or omission whatsoever
on the part of any Lender Party with respect to the Guarantor's
obligations hereunder, including, without limitation, any termination of
the obligations of the Guarantor hereunder, any
3 EXHIBIT I-2
145
amendment, compromise or waiver of or any consent or departure from the
terms or provisions of this Guaranty with respect to the Guarantor or any
release of the Guarantor from liability hereunder;
(vi) except in each case by a written amendment, waiver, consent,
release, or termination executed and delivered by the Administrative Agent
or other appropriate Lender Party pursuant to SECTION 7(b) of this
Guaranty, SECTION 11.1(b) of the Credit Agreement, or both, as applicable,
any release, discharge, modification or exchange of any property pledged
or mortgaged or in which a security interest has been granted as
collateral for the Guaranteed Obligations, or any amendment or termination
of or consent or waiver under any agreement or instrument now or hereafter
providing for granting, pledging, mortgaging or conveying collateral for
the Guaranteed Obligations; and
(vii) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Covered
Borrowers or any other Obligor;
it being the purpose and intent of this Guaranty that the obligations of the
Guarantor hereunder shall be absolute, unconditional and irrevocable and shall
not be discharged or terminated except by full and complete performance of all
of the Guaranteed Obligations.
(b) The Guarantor agrees that it is directly and primarily liable
to the Lender Parties, that the obligations hereunder are independent of the
obligations of each Covered Borrower and any other Obligor, and that a separate
action or actions may be brought and prosecuted against the Guarantor, whether
or not an action is brought against any Covered Borrower or any other Obligor,
or whether any Covered Borrower or any other Obligor is joined in any such
action or actions. The Guarantor agrees that any releases which may be given
by the Lender Parties to any Covered Borrower or any other Obligor or endorser
shall not release it from this Guaranty.
(c) The Guarantor does hereby waive and relinquish, so far as it
may lawfully and effectively do so, the benefit and advantage of any and all
valuation, stay, appraisement, extension or redemption law or laws now in
effect or hereafter enacted, and also waives promptness, diligence, notice of
acceptance, default, dishonor, non-payment, non-performance or any other notice
to or upon any Covered Borrower or the Guarantor.
SECTION 2. NO SUBROGATION. (a) Any and all present and future debts and
obligations of any Covered Borrower to the Guarantor, including rights of
reimbursement and subrogation, are hereby postponed in favor of and
subordinated to the payment in full in cash of all of the Guaranteed
Obligations and termination of all the Commitments; provided that the payment
of such present and future debts other than those due by virtue of rights of
reimbursement and subrogation with respect to this Guaranty shall be so
postponed and subordinated only if an Event of Default shall have occurred and
be continuing.
(b) Notwithstanding any payment or payments made or expenses
incurred by the Guarantor pursuant to this Guaranty, the Guarantor shall not be
subrogated, in whole or in part, to the rights of the Lender Parties against
the Covered Borrowers under the Credit Documents until the Guaranteed
Obligations shall have been paid in cash in full and the Commitments shall have
terminated. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, such amount shall be deemed to have been paid to the
Guarantor for the benefit of, and held in trust for, the Lender Parties and, in
addition, shall forthwith be paid to the Administrative Agent for the account
of the Lender Parties to be credited and applied upon the Guaranteed
Obligations if then matured or forthwith be repaid to the relevant Covered
Borrower if
4 EXHIBIT I-2
146
such obligations are then unmatured. The Guarantor hereby agrees that, as
between itself on the one hand and the Lender Parties on the other hand, the
Guaranteed Obligations may be declared to be forthwith due and payable
notwithstanding any stay, injunction or other prohibition preventing such
declaration as against any of the Covered Borrowers and that, in the event of
any such declaration, the Guaranteed Obligations (whether or not then due and
payable by any of the Covered Borrowers) shall forthwith become due and payable
by the Guarantor for purposes of this Guaranty. Nothing in this SECTION 2(b)
shall be effective to create a charge.
SECTION 3. REINSTATEMENT OF GUARANTY. This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time any payment, or
any part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by any Lender Party upon the insolvency,
bankruptcy or reorganization of any Covered Borrower, the Guarantor or any
other Obligor or otherwise, all as though such payment had not been made.
SECTION 4. RIGHTS OF CONTRIBUTION. The Guarantor and each other Person
providing a Guaranty pursuant to the Credit Agreement from time to time,
including those Persons executing the Acknowledgment to this Guaranty
(collectively, the "GROUP GUARANTORS"), hereby agree, as among themselves and
for the benefit of each of them, that if any Guarantor (in such capacity, an
"EXCESS FUNDING GUARANTOR") shall make any payment in respect of any of the
Guaranteed Obligations hereunder (a "GUARANTEE PAYMENT") as a result of which
such Excess Funding Guarantor shall have paid more than its Pro Rata Share (as
defined below) of the Guaranteed Obligations, each other Group Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence
hereof), pay to such Excess Funding Guarantor an amount equal to such Group
Guarantor's Pro Rata Share of such Guarantee Payment. The payment obligation
of any Group Guarantor to any Excess Funding Guarantor under this SECTION 4
shall be subordinate and subject to the prior payment in full in cash of the
Guaranteed Obligations (in favor of the Lender Parties) and termination of all
the Commitments and such Excess Funding Guarantor shall not exercise any right
or remedy with respect to such excess until all of the foregoing shall have
occurred. For the purposes hereof, "PRO RATA SHARE" shall mean, for any Group
Guarantor, the ratio (expressed as a percentage and determined as of the date
of the most recent financial statements provided to the Lender Parties pursuant
to CLAUSE (a) or (b) of SECTION 8.1.1 of the Credit Agreement) of (a) the sum
of the unconsolidated stockholders equity of such Group Guarantor plus the net
amount (if greater than zero) of any obligations owed by such Group Guarantor
to all the Borrowers to (b) the sum of the unconsolidated stockholders equity
of all the Group Guarantors plus the net amount (if greater than zero) of any
obligations owed by all the Group Guarantors to all the Borrowers (it being
understood and agreed that, in the case of any Group Guarantor that is also a
Borrower, such Group Guarantor shall not be considered to owe any obligation to
itself in its capacity as such Borrower).
SECTION 5. ASSIGNMENT; SUCCESSORS. This guaranty is a continuing guaranty
and shall be binding upon the Guarantor and its successors and assigns. This
guaranty shall inure to the benefit of each Lender Party and its successors and
assigns and shall be considered to be assigned upon the assignment or transfer
by any Lender Party of its Notes and other rights and obligations under the
Credit Agreement and other Loan Documents without requiring any act of or
consent or acknowledgment from the Guarantor. In furtherance of the foregoing,
the Guarantor shall execute and deliver to any assignee or transferee of any
Lender Party such additional counterparts of this Guaranty as any such Lender
Party may request in writing at any time and from time to time.
5 EXHIBIT I-2
147
SECTION 6. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS GUARANTY SHALL
BE GOVERNED BY AND ITS PROVISIONS CONSTRUED UNDER THE LAWS OF SINGAPORE. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE LENDER PARTIES OR THE GUARANTOR PURSUANT TO THIS
GUARANTY SHALL BE BROUGHT AND MAINTAINED, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK, U.S.A., THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR THE COURTS OF
SINGAPORE. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE AFOREMENTIONED COURTS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND, IN THE CASE OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN SUCH
LITIGATION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE
GUARANTOR AT ITS ADDRESS SPECIFIED PURSUANT TO SECTION 11.2 OF THE CREDIT
AGREEMENT, IN EACH CASE MARKED FOR THE ATTENTION OF GENERAL COUNSEL, XXXXXX
MICRO INC., OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK IN
THE MANNER PERMITTED BY THE LAWS OF EACH SUCH JURISDICTION. THE GUARANTOR
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY.
SECTION 7. MISCELLANEOUS PROVISIONS.
(a) This Guaranty is a Loan Document executed pursuant to the
Credit Agreement and shall (unless otherwise expressly indicated herein)
be construed, administered and applied in accordance with the terms and
provisions thereof, including, without limitation, SECTION 5.11 and
ARTICLE XI thereof.
(b) No amendment to or waiver of any provision of this Guaranty,
nor consent to any departure by the Guarantor herefrom, shall in any event
be effective unless the same shall be in writing and signed by the
Administrative Agent on behalf of the Lender Parties, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given.
(c) All notices and other communications provided to any party
hereto shall be made in the manner, and subject to the provisions set
forth in SECTION 11.2 of the Credit Agreement.
(d) Section captions used in this Guaranty are for convenience of
reference only, and shall not affect the construction of this Guaranty.
(e) In addition to, and not in limitation of, any rights of any
Lender Party under applicable law, each Lender Party shall, upon the
occurrence and during the continuance of any Default
6 EXHIBIT I-2
148
described in any of CLAUSES (a) through (d) of SECTION 9.1.9 of the Credit
Agreement (after providing notice to the Guarantor with respect thereto)
or any Event of Default, have the right, to the fullest extent permitted
by law, to set off and apply any all deposits (general or special, time or
demand'. provisional or final), credits, accounts or moneys of the
Guarantor to the payment of the obligations of the Guarantor that are at
such time due and owing to it hereunder, irrespective of whether or not
such Lender Party shall have made any demand under any Loan Document.
(f) Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of
such provision of the remaining provisions of this Guaranty.
SECTION 8. WAIVER OF JURY TRIAL. THE LENDER PARTIES AND THE GUARANTOR
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER
PARTIES OR THE GUARANTOR. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF THIS GUARANTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE LENDER PARTIES ENTERING INTO THE CREDIT AGREEMENT AND MAKING CREDIT
EXTENSIONS THEREUNDER.
SECTION 9. ACKNOWLEDGMENT AND AGREEMENT OF OTHER GUARANTORS. By executing
the acknowledgment to this Guaranty each of the other Group Guarantors agrees
to be fully bound by the terms of SECTION 4 hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES TO FOLLOW.]
7 EXHIBIT I-2
149
IN WITNESS WHEREOF, the undersigned corporation has caused this Guaranty to be
executed on its behalf as of the date above written by one of its officers duly
authorized thereunto.
XXXXXX MICRO SINGAPORE PTE LTD., a
corporation organized and existing under the laws of
Singapore
By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Attorney
ACKNOWLEDGED AND AGREED TO THE TERMS OF SECTION 4:
XXXXXX MICRO INC., a corporation organized and INGRAM EUROPEAN COORDINATION CENTER N.V., a
existing under the laws of the State of Delaware, company organized and existing under the laws of
United States of America The Kingdom of Belgium
By _____________________________________________ By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Executive Vice President Xxxxxxx X. Xxxxxxxx, Authorized
& Worldwide Chief Financial Officer Representative
XXXXXX MICRO INC., a corporation organized and
existing under the laws of the Province of
Ontario, Canada
By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Authorized Representative
8 EXHIBIT I-2
150
EXHIBIT J
ADDITIONAL GUARANTY
Pursuant to THIS GUARANTY (the "GUARANTY"), dated as of
______________________________, 19___, [INSERT NAME OF ADDITIONAL GUARANTOR]
(the "GUARANTOR"), hereby unconditionally, absolutely and irrevocably
guarantees, as primary obligor and not as surety merely, to each Lender Party
(as defined below), without offset or deduction, (a) the full and punctual
payment when due of all amounts payable by Xxxxxx Micro Inc., a corporation
organized and existing under the laws of the State of Delaware ("MICRO"), and
Xxxxxx Micro Inc., a corporation organized and existing under the laws of the
Province of Ontario, Canada ("MICRO CANADA") (the "BORROWERS"), under or in
connection with the Canadian Credit Agreement (together with all amendments and
other modifications, if any, from time to time made thereto, the "CREDIT
AGREEMENT"; unless otherwise defined herein all capitalized terms used herein
without definition have the meanings provided for in the Credit Agreement)
dated as of October 28, 1997, among the Borrowers, certain financial
institutions (together with their respective successors and permitted assigns
and any branch or affiliate of a financial institution funding a Loan as
permitted by SECTION 5.6 of the Credit Agreement, collectively, the "LENDERS"),
The Bank of Nova Scotia, as administrative agent (in such capacity the
"ADMINISTRATIVE AGENT") for the Lenders, Royal Bank of Canada, as syndication
agent for the Lenders, and Bank of Tokyo-Mitsubishi (Canada) as co-agent
(hereinafter, the Lenders, the Administrative Agent, that Syndication Agent,
and that co-agent being, collectively, the "LENDER PARTIES"), and the other
Loan Documents, including, without limitation, all principal, interest,
premiums, fees and expenses payable by the Borrowers thereunder and all
reasonable expenses incurred by any Lender Party in enforcing any rights under
the Credit Agreement, the Notes (if any), and the other Loan Documents
(including this Guaranty) and (b) the full performance and observance of all of
the covenants, conditions and agreements provided in the Credit Agreement and
each other Loan Document required to be performed or observed by each Borrower
(all of the foregoing guaranteed obligations being the "GUARANTEED
OBLIGATIONS"). In the case of a failure of any Borrower punctually to make any
payment of principal of or interest or premium on any Credit Extension or Note,
the Guarantor hereby agrees to cause any such payment to be made punctually
when and as the same shall become due and payable, whether at the stated
maturity, on a prepayment date, by declaration of acceleration, or otherwise,
as if such payment were made by such Borrower. This Guaranty constitutes a
guaranty of payment and not a guaranty of collection. The obligations and
agreements of the Guarantor hereunder shall be performed and observed without
requiring any notice of non-payment, non-performance or nonobservance, or any
proof thereof or demand therefor, all of which the Guarantor hereby expressly
waives.
The Borrowers and the Guarantor are engaged as an integrated group in
diversified operations including wholesale distribution of microcomputer
software and hardware products. multimedia products, customer financing,
assembly and configuration and other related wholesaling, distribution and
service activities. This integrated operation requires financing on such a
basis that credit supplied to Micro and the other Borrowers be made available
from time to time to the Guarantor, as required for the continued successful
operation of each Borrower and the Guarantor, separately, and the integrated
operation as a whole. In accordance with the terms of the Credit Agreement,
and to further induce the Lender Parties to continue making Credit Extensions
pursuant thereto, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Guarantor has agreed to
guarantee, on the terms and conditions set forth herein, the obligations of the
Borrowers under the Credit Agreement, the Notes and each other Loan Document,
and the Guarantor expects to derive benefit, directly or indirectly,
EXHIBIT I-2
151
from the Credit Extensions made to the Borrowers from time to time.
Notwithstanding the foregoing, the obligations of the Guarantor hereunder
shall be limited to an aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance under Section 548 of
the United States Bankruptcy Code or any comparable provisions of applicable
law of any State of the United States.
SECTION 1. CONSENTS AND WAIVERS BY GUARANTOR, (a) This Guaranty shall be
binding upon the Guarantor, its successors and assigns, and shall remain in
full force and effect irrespective of, and shall not be terminated by, the
existence of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting the terms of the Credit Agreement, any Note, any other
Loan Document or any other agreement or instrument relating thereto (the
foregoing agreements, documents and instruments being, collectively, the
"CREDIT DOCUMENTS"), or the rights or obligations of any Obligor under or with
respect to any of the Credit Documents. The liability of the Guarantor under
this Guaranty shall be absolute, unconditional and irrevocable irrespective of:
(i) any lack of validity or enforceability of any
Obligor's obligations under or with respect to any Credit Document;
(ii) any change, whether or not agreed to by the Lender
Parties, in the time, manner or place of payment of, or in any other
term of, all or any of the Credit Documents or any other amendment,
renewal, extension, acceleration, compromise or waiver of or any
consent or departure from the terms or provisions of any of the Credit
Documents;
(iii) the lack of power or authority of any of the Obligors
to execute and deliver any of the Credit Documents, any set-off or
counterclaim which may at any time be available to or asserted by any
Obligor against any Lender Party with respect to such Obligor's
obligations under any of the Credit Documents; the existence or
continuance of any Obligor as a legal entity; the consolidation or
merger of any Obligor with or into any other corporation, or the sale,
lease or other disposition by any Obligor of all or substantially all
of its assets to any other business entity, whether or not effected in
compliance with the provisions of the Credit Agreement; or the
bankruptcy or insolvency of any Obligor, the admission in writing by
any Obligor of its inability to pay its debts as they mature, or the
making by any Obligor of a general assignment for the benefit of, or
entering into a composition or arrangement with, creditors;
(iv) any act, failure to act, delay or omission whatsoever
on the part of any Lender Party, including, without limitation, any
failure to demand, delay in demanding or rescission of a demand for
any payment under any of the Credit Documents or any failure to give
to any Obligor (including the Guarantor) notice of default in the
making of any payment due and payable under any of the Credit
Documents or performance of any covenant, condition or agreement
contained in any of the Credit Documents or any action taken by any
Lender Party in the exercise, either in whole or in part, of any right
or power conferred by any of the Credit Documents or the failure,
delay or omission by any Lender Party to exercise any such right or
power;
(v) except in each case by a written amendment, waiver,
consent, release, or termination executed and delivered by the
Administrative Agent or other appropriate Lender Party pursuant to
SECTION 8(b) of this Guaranty, SECTION 11.1(b) of the Credit
Agreement, or both, as applicable, any invalidation of any of the
obligations of the Guarantor hereunder or the
EXHIBIT J
152
repudiation of this Guaranty by the Guarantor, whether or not under
color of right, or any act, failure to act, delay or omission
whatsoever on the part of any Lender Party with respect to the
Guarantor's obligations hereunder, including, without limitation, any
termination of the obligations of the Guarantor hereunder, any
amendment, compromise or waiver of or any consent or departure from
the terms or provisions of this Guaranty with respect to the Guarantor
or any release of the Guarantor from liability hereunder;
(vi) except in each case by a written amendment, waiver,
consent, release, or termination executed and delivered by the
Administrative Agent or other appropriate Lender Party pursuant to
SECTION 8(b) of this Guaranty, SECTION 11.1(b) of the Credit
Agreement, or both, as applicable, any release, discharge,
modifications or exchange of any property pledged or mortgaged or in
which a security interest has been granted as collateral for the
Guaranteed Obligations, or any amendment or termination of or consent
or waiver under any agreement or instrument now or hereafter providing
for granting, pledging, mortgaging or conveying collateral for the
Guaranteed Obligations; and
(vii) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, the Borrowers or any other Obligor;
it being the purpose and intent of this Guaranty that the obligations of the
Guarantor hereunder shall be absolute, unconditional and irrevocable and shall
not be discharged or terminated except by full and complete performance of all
of the Guaranteed Obligations.
(b) The Guarantor agrees that it is directly and primarily and
jointly and severally liable to the Lender Parties, that the obligations
hereunder are independent of the obligations of each Borrower and any
other Obligor, and that a separate action or actions may be brought and
prosecuted against the Guarantor, whether or not an action is brought
against any Borrower or any other Obligor, or whether any Borrower or any
other Obligor is joined in any such action or actions. The Guarantor
agrees that any releases which may be given by the Lender Parties to any
Borrower or any other Obligor or endorser shall not release it from this
Guaranty.
(c) The Guarantor does hereby waive and relinquish, so far as it
may lawfully and effectively do so, the benefit and advantage of any and
all valuation, stay, appraisement, extension or redemption law or laws now
in effect or hereafter enacted, and also waives promptness, diligence,
notice of acceptance, default, dishonor, non-payment, non-performance or
any other notice to or upon any Borrower or the Guarantor.
SECTION 2. NO SUBROGATION. (a) Any and all present and future debts and
obligations of each Borrower to the Guarantor, including rights of
reimbursement and subrogation, are hereby postponed in favor of and
subordinated to the payment in full in cash of all of the Guaranteed
Obligations and termination of all the Commitments; provided, however, that the
payment of such present and future debts other than those due by virtue of
rights of reimbursement and subrogation with respect to this Guaranty shall be
so postponed and subordinated only if an Event of Default shall have occurred
and be continuing.
(b) Notwithstanding any payment or payments made or expenses
incurred by the Guarantor pursuant to this Guaranty, the Guarantor shall
not be subrogated, in whole or in part, to the rights of the Lender
Parties against the Borrowers under the Credit Documents until the
Guaranteed
4 EXHIBIT J
153
Obligations shall have been paid in cash in full and the Commitments have
terminated. If any amount shall be paid to the Guarantor in violation of
the preceding sentence, such amount shall be deemed to have been paid to
the Guarantor for the benefit of, and held in trust for, the Lender
Parties and, in addition, shall forthwith be paid to the Administrative
Agent for the account of the Lender Parties to be credited and applied
upon the Guaranteed Obligations if then matured or forthwith be repaid to
the relevant Borrower if such obligations are then unmatured. The
Guarantor hereby agrees that, as between the Guarantor on the one hand and
the Lender Parties on the other hand, the Guaranteed Obligations may be
declared to be forthwith due and payable notwithstanding any stay,
injunction or other prohibition preventing such declaration as against any
of the Borrowers and that, in the event of any such declaration, the
Guaranteed Obligations (whether or not then due and payable by any of the
Borrowers) shall forthwith become due and payable by the Guarantor for
purposes of this Guaranty.
SECTION 3. REINSTATEMENT OF GUARANTY. This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time any payment. or
any part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by any Lender Party upon the insolvency,
bankruptcy or reorganization of any Borrower the Guarantor or any other Obligor
(including the Guarantor) or otherwise, all as though such payment had not been
made.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby makes to
the Lender Parties the following representations, warranties and agreements as
to itself:
SECTION 4.01. ORGANIZATION, ETC. The Guarantor is a corporation validly
organized and existing and in good standing under the laws of the jurisdiction
of its incorporation, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the nature of its business
requires such qualification and where the failure to so qualify and to maintain
such good standing, singularly or in the aggregate, has resulted in, or would
reasonably be expected to result in, a Material Adverse Effect, and has full
power and authority and holds all requisite governmental licenses, permits and
other approvals to enter into and perform its obligations under this Guaranty
and to own and hold under lease its property and to conduct its business
substantially as currently conducted by it, excluding any such government
licenses, permits or other approvals in respect of which the failure to so
obtain, hold or maintain has not caused, and would not reasonably be expected
to result in, a Material Adverse Effect.
SECTION 4.02. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by the Guarantor of this Guaranty are within the
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action, and do not
(a) contravene the Guarantor's Organic Documents;
(b) contravene any law or governmental regulation or court decree
or order binding on or affecting the Guarantor; or
(c) result in, or require the creation or imposition of, any Lien
on any of the Guarantor's properties.
SECTION 4.03. NO DEFAULT. The Guarantor is not in default in the
performance of any obligation,
5 EXHIBIT J
154
agreement or condition contained in any bond, debenture, note, or in any
indenture, loan agreement, or other agreement, in connection with or as a
result of which default there exists a reasonable possibility that a Material
Adverse Effect could arise. The execution, delivery and performance by the
Guarantor of this Guaranty will not conflict with, or constitute a breach of,
or a default under, any such bond, debenture, note, indenture, loan agreement
or other agreement to which the Guarantor is a party or by which it is bound,
in connection with or as a result of which conflict, breach of default there
exists a reasonable possibility that a Material Adverse Effect could arise.
SECTION 4.04. GOVERNMENT APPROVAL, REGULATION, ETC. No action by, and no
notice to or filing with, any governmental authority or regulatory body or
other Person and no payment of any stamp or similar tax, is required for the
due execution, delivery or performance by the Guarantor of this Guaranty.
SECTION 4.05. VALIDITY, ETC. This Guaranty constitutes the legal. valid
and binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or limiting creditors' rights generally or by general principles of
equity.
SECTION 4.06. LITIGATION, LABOR CONTROVERSIES, ETC. Except as disclosed
in ITEM 7.8 (Litigation) of the Disclosure Schedule to the Credit Agreement,
there is no pending or, to the knowledge of the Guarantor, threatened
litigation, action, proceeding or labor controversy affecting any the
Guarantor, or any of its respective properties. businesses, assets or revenues,
in respect of which there exists a reasonable possibility of an outcome that
would result in a Material Adverse Effect or that would to affect the legality,
validity or enforceability of this Guaranty.
SECTION 4.07. TAXES. The Guarantor has filed all material tax returns and
reports it reasonably believes are required by law to have been filed by it and
has paid all taxes and governmental charges thereby shown to be owing, except
as disclosed in Item 7.11 (Taxes) of the Disclosure Schedule to the Credit
Agreement and except for any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
SECTION 5. RIGHTS OF CONTRIBUTION. The Guarantor and each other Person
providing a Guaranty pursuant to the Credit Agreement from time to time,
including those Persons executing the Acknowledgment to this Guaranty
(collectively, the "GROUP GUARANTORS"), hereby agree, as among themselves and
for the benefit of each of them, that if any Group Guarantor (in such capacity
an "EXCESS FUNDING GUARANTOR") shall make any payment in respect of any of the
Guaranteed Obligations hereunder (a "GUARANTEE PAYMENT") as a result of which
such Excess Funding Guarantor shall have paid more than its Pro Rata Share (as
defined below) of the Guaranteed Obligations, each other Group Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence
hereof), pay to such Excess Funding Guarantor an amount equal to such Group
Guarantor's Pro Rata Share of such Guarantee Payment. The payment obligation
of any Share of such Guarantee Payment. The payment obligation of any Group
Guarantor to any Excess Funding Guarantor under this SECTION 5 shall be
subordinate and subject to the prior payment in full in cash of the Guaranteed
Obligations (in favor of the Lender Parties) and termination of all the
Commitments and such Excess Funding Guarantor shall not exercise any right or
remedy with respect to such excess until all of the foregoing shall have
occurred. For the purposes hereof, "PRO RATA SHARE" shall mean, for any Group
Guarantor, the ratio (expressed as a percentage and determined as of the date
of the most recent financial statements provided to the Lender
6 EXHIBIT J
155
Parties pursuant to CLAUSE (a) or (b) of SECTION 8.1.1 of the Credit Agreement)
of (a) the sum of the unconsolidated stockholders equity of such Group
Guarantor plus the net amount (if greater than zero) of any obligations owed by
such Group Guarantor to all the Borrowers to (b) the sum of the unconsolidated
stockholders equity of all the Group Guarantors plus the net amount (if greater
than zero) of any obligations owed by all the Group Guarantors to all the
Borrowers (it being understood and agreed that, in the case of any Group
Guarantor that is also a Borrower, such Group Guarantor shall not be considered
to owe any obligation to itself in its capacity as such Borrower).
SECTION 6. ASSIGNMENT; SUCCESSORS. This Guaranty is a continuing guaranty
and shall be binding upon the Guarantor and its successors and assigns. This
Guaranty shall inure to the benefit of each Lender Party and its successors and
assigns and shall be considered to be assigned upon the assignment or transfer
by any Lender Party of its Notes and other rights and obligations under the
Credit Agreement and other Loan Documents without requiring any act of or
consent or acknowledgment from the Guarantor. In furtherance of the foregoing,
the Guarantor shall execute and deliver to any assignee or transferee of any
Lender Party such additional counterparts of this Guaranty as any such Lender
Party may request in writing at any time and from time to time.
SECTION 7. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS GUARANTY SHALL
BE GOVERNED BY AND ITS PROVISIONS CONSTRUED UNDER THE LAWS OF [THE STATE OF
_______________________] [OR, IF PERMITTED PURSUANT TO SECTION 8.1.10 OF THE
CREDIT AGREEMENT, INSERT NAME OF OTHER JURISDICTION]. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE LENDER PARTIES OR THE GUARANTORS PURSUANT TO THIS GUARANTY SHALL
BE BROUGHT AND MAINTAINED, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN SUCH
LITIGATION BY THE MAILING OF COPIES OF SUCH PROCESS TO THE GUARANTOR AT ITS
ADDRESS SPECIFIED PURSUANT TO SECTION 8(C) HEREOF, IN EACH CASE MARKED FOR THE
ATTENTION OF GENERAL COUNSEL, XXXXXX MICRO INC., OR BY PERSONAL SERVICE WITHIN
OR WITHOUT THE STATE OF NEW YORK IN THE MANNER PERMITTED BY THE LAWS OF EACH
SUCH STATE. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT
IN AS INCONVENIENT FORUM. TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS GUARANTY.
SECTION 8. MISCELLANEOUS PROVISIONS.
(a) This Guaranty is a Loan Document executed pursuant to the
Credit Agreement and shall
7 EXHIBIT J
156
(unless otherwise expressly indicated herein) be construed, administered
and applied in accordance with the terms and provisions thereof,
including, without limitation, SECTION 5.11 and ARTICLE M thereof.
(b) No amendment to or waiver of any provision of this Guaranty,
nor consent to any departure by the Guarantor herefrom, shall in any event
be effective unless the same shall be in writing and signed by the
Administrative Agent on behalf of the Lender Parties, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given.
(c) All notices and other communications provided to any party
hereto shall be made, (i) if to the Guarantor, at its address or facsimile
number set forth below its signature line hereto or at such other address
or facsimile number as the Guarantor may designate to the other parties
hereto and the Lender Parties from time to time, and each such notice or
communication shall be subject to the other provisions set forth in
SECTION 11.2 of the Credit Agreement or (ii) if to any Borrower, in the
manner, and subject to the provisions set forth in SECTION 11.2 of the
Credit Agreement.
(d) Section captions used in this Guaranty are for convenience of
referenced only, and shall not affect the construction of this Guaranty.
(e) In addition to, and not in limitation of, any rights of any
Lender Party under applicable law, each Lender Party shall, upon the
occurrence and during the continuance of any Default described in any of
CLAUSES (a) through (d) of SECTION 9.1.9 of the Credit Agreement (after
providing notice to the Guarantor with respect thereto) or any Event of
Default, have the right, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final), credits, accounts or moneys of the Guarantor to the
payment of the obligations of the Guarantor then due and owing to it
hereunder, irrespective of whether or not such Lender Party shall have
made any demand under any Loan Document.
(f) Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of
such provision of the remaining provisions of this Guaranty.
(g) Any Person required to become a party to this Guaranty from
and after the Effective Date pursuant to SECTION 8.1.10 of the Credit
Agreement may do so by executing a signed counterpart of this Guaranty on
terms satisfactory to the Administrative Agent.
SECTION 9. WAIVER OF JURY TRIAL. THE LENDER PARTIES AND GUARANTORS HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER
PARTIES OR THE GUARANTORS. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF THIS GUARANTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE LENDER PARTIES ENTERING INTO THE CREDIT AGREEMENT AND MAKING CREDIT
EXTENSIONS THEREUNDER.
8 EXHIBIT J
157
SECTION 10. ACKNOWLEDGMENT AND AGREEMENT OF OTHER GUARANTORS. By
executing the acknowledgment to this Guaranty each of the other Group
Guarantors agrees to be fully bound by the terms of SECTION 5 hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES TO FOLLOW.]
IN WITNESS WHEREOF, each undersigned corporation has caused this Guaranty
to be executed on its respective behalf as of the date above written by one of
its officers duly authorized thereunto.
[NAME OF ADDITIONAL GUARANTOR]
[ADDRESS FOR NOTICES]
By_____________________________________
Name:________________________________
Title:_______________________________
ACKNOWLEDGED AND AGREED TO THE TERMS OF SECTION 5:
XXXXXX MICRO INC., a corporation organized and XXXXXX MICRO SINGAPORE PTE LTD., a corporation
existing under the laws of the State of Delaware, organized and existing under the laws of Singapore
United States of America
By _____________________________________________ By _____________________________________________
Name: _______________________________________ Name: _______________________________________
Title: ______________________________________ Title: ______________________________________
XXXXXX MICRO INC., a corporation organized and
INGRAM EUROPEAN COORDINATION existing under the laws of the Province of
CENTER N.V., a company organized and existing Ontario, Canada
under the laws of The Kingdom of Belgium
By _____________________________________________ By _____________________________________________
Name: _______________________________________ Name: _______________________________________
Title: ______________________________________ Title: ______________________________________
[Insert blocks for any existing Additional Guarantors.]
9 EXHIBIT J
158
EXHIBIT K
LENDER ASSIGNMENT AGREEMENT
______________, 19_____
Xxxxxx Micro Inc. The Bank of Nova Scotia,
0000 Xxxx Xx. Xxxxxx Xxxxx as Administrative Agent
Xxxxx Xxx, XX 00000 00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attention: Treasurer
Attn: _________________________
We refer to the Canadian Credit Agreement (together with all amendments
and other modifications, if any, from time to time made to it the "CREDIT
AGREEMENT") dated as of October 28, 1997, among Xxxxxx Micro Inc. and Xxxxxx
Micro Inc. (Canada), as Borrowers and Guarantors, certain financial
institutions (together with their respective successors and permitted assigns
and any branch or affiliate of a financial institution funding a Loan as
permitted by SECTION 5.6 of the Credit Agreement, collectively, the "LENDERS"),
The Bank of Nova Scotia, as Administrative Agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the Lenders, Royal Bank of Canada, as syndication
agent for the Lenders, and Bank of Tokyo-Mitsubishi (Canada) as co-agent.
Terms defined in the Credit Agreement have the same meanings when used, unless
otherwise defined, in this agreement.
1. This agreement is delivered to you and constitutes notice to you under
SECTION 11.11.1 of the Credit Agreement of the assignment and delegation
without recourse by ______________________________ (the "ASSIGNOR") to
______________________________________________ (the "ASSIGNEE") of all of the
Assignor's rights and obligations under the Credit Agreement as of
_________________, ____ (the "ASSIGNMENT DATE"), with respect to (a) its
Commitment in the amount of US$_____________ and (b) outstanding Credit
Extensions comprised of (i) Pro-Rata Revolving Loans in the aggregate principal
amount of US$________, (ii) Letter of Credit Outstandings in the aggregate
principal amount of US$_____________ ________, and (iii) Non-Rata Revolving
Loans in the aggregate principal amount of US$_______________ (the "ASSIGNED
PORTION") outstanding under the Credit Agreement; provided that Assignor does
not relinquish its rights under SECTIONS 5.3, 5.4, 5.5, 5.7, 11.3, and 11.4 of
the Credit Agreement, to the extent those rights relate to any time before the
Assignment Date. From and after the Assignment Date, the Assignor's and the
Assignee's Percentages for purposes of the Credit Agreement and each other Loan
Document are as stated opposite their respective names on the signature page(s)
below.
2. On or before the Assignment Date, the Assignee shall pay to the
Assignor an amount, in immediately available funds, equal to the purchase price
agreed to between the Assignor and the Assignee. Any part of that purchase
price on account of (a) accrued and unpaid interest and Letter of Credit fees
paid in advance (pursuant to SECTION 4.3.3 of the Credit Agreement) with
respect to the Assigned Portion shall be calculated by the Assignor (in
consultation with Micro) and (b) the facility fees payable with respect to the
Assigned Portion pursuant to SECTION 4.3.2 of the Credit Agreement shall be
calculated by the Assignor (in consultation with Micro). The Assignee is
entitled to receive all payments
EXHIBIT K
159
on account of interest, principal, and fees with respect to the Assigned
Portion for the period from and after the then most recent date of payment of
interest, principal, and fees, as the case may be, by the relevant Borrower.
The Assignor and the Assignee shall, directly between themselves, make all
appropriate adjustments in payments to either of them under the Credit
Agreement for periods before the Assignment Date.
3. The Assignee represents, warrants, acknowledges, and confirms that (a)
it is legally authorized to enter into and deliver this agreement, (b) it has
received (i) a copy of the Credit Agreement, (ii) copies of the documents that
were required to be delivered under the Credit Agreement as a condition to the
initial Credit Extension under it, (iii) copies of the most recent financial
statements delivered pursuant to SECTION 8.1.1 or 6.1.4, as the case may be, of
the Credit Agreement, and (iv) all other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this agreement, (c) it independently and without reliance upon the Assignor,
the Agents, or any other Lender, and based on such documents and information as
it deemed or will deem appropriate at the time, made and shall continue to make
its own credit decisions in taking or not taking any action under the Credit
Agreement, the other Loan Documents, and the other instruments and documents
delivered in connection therewith, (d) its actions in becoming a Lender and in
making its Commitment and Credit Extensions under the Credit Agreement have
been and will be made without recourse to, or representation or warranty by,
the Agents, and (e) the Assignee is (i) in respect of payments by Micro,
entitled to receive payments under the Loan Documents and free and clear
without deduction for or on account of any United States federal income taxes,
and (ii) in respect of payments by Coordination Center entitled to receive
payments under the Loan Documents free and clear without any deduction for or
on account of any Canadian income taxes.
4. The Assignor represents, warrants, confirms, and acknowledges that (a)
it is legally authorized to enter into and deliver this agreement and (b) it is
the legal and beneficial owner of the Assigned Portion. Except as set forth in
the previous sentence, the Assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties, or
representations made pursuant to or in connection with this agreement, or the
execution, legality, validity, enforceability, genuineness, sufficiency, or
value of this agreement, the Credit Agreement, any other Loan Document, or any
other instrument or document furnished pursuant hereto or thereto, including
the financial condition of Micro and its Subsidiaries or the performance or
observance by any Lender of any of its obligations under the Credit Agreement,
any other Loan Document, or any other instrument or document furnished pursuant
hereto or thereto.
5. Except as otherwise provided in the Credit Agreement, effective as of
the Assignment Date (a) the Assignee (i) shall be deemed automatically to have
become a party to the Credit Agreement with all the rights and obligations of a
"Lender" under the Credit Agreement and the other Loan Documents as if it were
an original signatory to them to the extent specified in the PARAGRAPH 1 above,
(ii) agrees to be bound by the terms and conditions in the Credit Agreement and
the other Loan Documents as if it were an original signatory to them, and (b)
the Assignor shall be released from its obligations under the Credit Agreement
and the other Loan Documents to the extent of the Assigned Portion.
6. The Assignee shall pay to the Administrative Agent the processing fee
referred to in SECTION 11.11.1(b) of the Credit Agreement.
7. The Assignee advises you of the following administrative details with
respect to the assigned
3 EXHIBIT K
160
Credit Extensions and Commitment and requests that the Administrative Agent and
Micro acknowledge receipt of this agreement:
LENDING OFFICE FOR MICRO AND ADDRESS FOR NOTICES:
ADDRESS FOR PAYMENT OF FEES
BY MICRO:
________________________________ ___________________________________
________________________________ ___________________________________
________________________________ ___________________________________
________________________________ ___________________________________
________________________________ ___________________________________
FACSIMILE NO.:__________________ FACSIMILE NO.: ___________________
ATTENTION: ____________________ ATTENTION: ________________________
LENDING OFFICE FOR LOANS FOR MICRO ADDRESS FOR PAYMENT OF FEES:
CANACA AND ADDRESS FOR PAYMENT OF
FEES BY MICRO CANADA: ____________________________________
____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ FACSIMILE NO.: ____________________
FACSIMILE NO.: ____________________ ATTENTION: ________________________
ATTENTION: ________________________
8. This Agreement may be executed by the Assignor and Assignee in
separate counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same agreement.
Percentage ______________________, as the Assignor
(after giving effect to the Assignment)
By __________________________
Commitment and Name: __________________
Credit Extensions: _______% Title: __________________
Percentage
(after giving effect to the Assignment) ______________, as the Assignee
By _________________________
Commitment and Name: ________________
Credit Extensions: _______% Title: ________________
The foregoing is accepted and agreed to in all respects as of __________,_____.
4 EXHIBIT K
161
THE BANK OF NOVA SCOTIA, XXXXXX MICRO INC. (a
as the Administrative Agent corporation organized and
existing under the laws of the
State of Delaware, United
States of America), as Micro
By ________________________________ By ____________________________
Name:___________________________ Name:_______________________
Title: _________________________ Title:______________________
EXHIBIT L
162
EXHIBIT L
QUARTERLY REPORT
XXXXXX MICRO INC.
OUTSTANDING NON-RATA CREDIT EXTENSIONS
As of the last day of the Fiscal Period ended ______________.
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LENDER/ISSUER TYPE1 MATURITY PRINCIPAL DOLLAR
AMOUNT/STATED AMOUNT2
AMOUNT
($ OR CND $)
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Total Dollar Amount of all Outstanding Non-Rata Credit Extensions as of such
last day = $____________.
___________________________
1 Non-Rata Revolving Loan or Non-Rata Letter of Credit.
2 The Dollar Amount on such last day of any Non-Rata Revolving Loans
or Non-Rata Letters of Credit denominated in Canadian Dollars shall be
calculated based upon the spot rate at which Dollars were offered on
such day for Canadian Dollars which appeared on Telerate Page 3740 at
approximately 11:00 a.m. Toronto time on such day (and if such spot
rate is not available on Telerate Page 3740 as of such time, such
spot rate as was quoted by Scotiabank, in London at approximately
11:00 a.m. Toronto time on such day.
EXHIBIT L
163
EXHIBIT R
COMMITMENT EXTENSION REQUEST1
The Bank of Nova Scotia,
as Administrative Agent
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attn: ____________________
And each of the Lenders Party to the
Credit Agreement referred to below
This request is delivered to you pursuant to SECTION 2.2(A) of the
Canadian Credit Agreement (together with all amendments and other
modifications, if any, from time to time made to it, the "CREDIT AGREEMENT")
dated as of October 28, 1997, among Xxxxxx Micro Inc. and Xxxxxx Micro Inc.
(Canada), as Borrowers and Guarantors, certain financial institutions (together
with their respective successors and permitted assigns and any branch or
affiliate of a financial institution funding a Loan as permitted by SECTION 5.6
of the Credit Agreement, collectively, the "LENDERS"), The Bank of Nova Scotia,
Administrative Agent, Royal Bank of Canada, as Syndication Agent, and Bank of
Tokyo- Mitsubishi (Canada) as co-agent. Terms defined in the Credit Agreement
have the same meanings when used, unless otherwise defined, in this request.
Micro requests that the Commitment Termination Date be extended from
____________________, ____,2 for a [check and complete one or both]:
[ ] one-year ending ___________________, ____ (a "ONE-YEAR
EXTENSION").
[ ] two-year extension ending ___________________, ____ (a
"TWO-YEAR EXTENSION").
Micro acknowledges and agrees that the Commitment Termination Date has not
occurred and that this request and any extension of the current Commitment
Termination Date pursuant to this request shall, without notice to or action by
any Person, automatically become null and void and be of no force and effect on
the Commitment Termination Date.
_____________________________
1 ATTENTION LENDER - Xxxxxx Micro Inc. is authorized to deliver this
request only during the period beginning May 1st and ending June 30th
in the year immediately preceding the year of the current Commitment
Termination Date. Delivery of such a request at any other time is not
permitted by the Credit Agreement, and you are not required to respond
to the same.
2 Insert the current Commitment Termination Date.
EXHIBIT R
164
Please indicate whether or not you consent to the proposed extension of
the Commitment Termination Date by completing and signing below two of the
three enclosed counterparts of this request and returning one signed copy of
each NOT LATER THAN JULY 31ST OF THIS YEAR to Micro and the Administrative
Agent as follows:
Xxxxxx Micro Inc. The Bank of Nova Scotia,
0000 X. Xx. Xxxxxx Xxxxx as Administrative Agent
Xxxxx Xxx, XX 00000 00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Attention: Treasurer Xxxxxxx, XX X0X 0X0
Attn: __________________________
Micro has caused this request to be executed and delivered by its duly
Authorized Person as of the date first stated above.
XXXXXX MICRO INC., a corporation
organized and existing under the
laws of the State of Delaware,
United States
By _____________________________
Name: ______________________
Title: ______________________
In respect of the foregoing requested extension(s), the undersigned Lender
[check and complete the following, as applicable]:
DOES NOT
CONSENTS CONSENT
[ ] [ ] To the One-Year Extension, if requested.
[ ] [ ] To the Two-Year Extension, if requested.
_______________________________1
By _____________________________
Name: __________________________
Title:__________________________
____________________
1 Insert name of Lender.
2 EXHIBIT R
