EXHIBIT 10.1
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 2, 1999
by and among
CELLSTAR CORPORATION,
as Borrower,
THE FIRST NATIONAL BANK OF CHICAGO,
as Syndication Agent,
NATIONAL CITY BANK,
as Documentation Agent,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(formerly known as Texas Commerce Bank National Association),
as Administrative Agent,
and
THE CHASE MANHATTAN BANK,
as Alternate Currency Agent
$115,000,000
MULTICURRENCY REVOLVING
CREDIT FACILITY
________________________________
CHASE SECURITIES INC.,
as Lead Arranger and Book Manager
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TABLE OF CONTENTS
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Page
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ARTICLE I - Definitions............................................................................. 2
Section 1.1. Definitions................................................................... 2
Section 1.2. Other Definitional Provisions................................................. 28
ARTICLE II - Advances............................................................................... 28
Section 2.1. Advances...................................................................... 28
Section 2.2. Swing Line.................................................................... 29
Section 2.3. Notes......................................................................... 31
Section 2.4. Repayment of Advances......................................................... 32
Section 2.5. Interest...................................................................... 32
Section 2.6. Borrowing Procedure........................................................... 32
Section 2.7. Conversions and Continuations................................................. 34
Section 2.8. Use of Proceeds............................................................... 34
Section 2.9. Commitment Fee................................................................ 34
Section 2.10. Reduction or Termination of Commitments....................................... 35
Section 2.11. Administrative Fee............................................................ 35
Section 2.12. Commitment Increase........................................................... 35
Section 2.13. Amendment Fees................................................................ 36
ARTICLE III - Letters of Credit..................................................................... 36
Section 3.1. Letters of Credit............................................................. 36
Section 3.2. Procedure for Issuing Letters of Credit....................................... 37
Section 3.3. Participation by Banks........................................................ 37
Section 3.4. Payments Constitute Advances.................................................. 37
Section 3.5. Letter of Credit Fee.......................................................... 38
Section 3.6. Administrative Agent's Responsibilities....................................... 38
Section 3.7. Letter of Credit Documents.................................................... 38
ARTICLE IV - Payments; EMU Provisions............................................................... 39
Section 4.1. Method of Payment............................................................. 39
Section 4.2. Voluntary Prepayment.......................................................... 39
Section 4.3. Mandatory Prepayment.......................................................... 40
Section 4.4. Pro Rata Treatment............................................................ 40
Section 4.5. Non-Receipt of Funds by the Agent............................................. 41
Section 4.6. Withholding Taxes............................................................. 41
Section 4.7. Withholding Tax Exemption..................................................... 42
Section 4.8. Judgment Currency............................................................. 42
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TABLE OF CONTENTS
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(continued)
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Section 4.9. EMU Provisions................................................................ 43
Section 4.10. Continuity of Contract........................................................ 44
ARTICLE V - Yield Protection; Limitations on Advances; Capital Adequacy............................. 45
Section 5.1. Additional Costs.............................................................. 45
Section 5.2. Limitation on Types of Advances............................................... 46
Section 5.3. Illegality.................................................................... 47
Section 5.4. Substitute Floating Rate Advances............................................. 47
Section 5.5. Compensation.................................................................. 47
Section 5.6. Capital Adequacy.............................................................. 48
Section 5.7. Additional Costs in Respect of Letters of Credit.............................. 49
ARTICLE VI - Security............................................................................... 49
Section 6.1. Collateral.................................................................... 49
Section 6.2. Setoff........................................................................ 51
Section 6.3. Other Subsidiaries............................................................ 51
ARTICLE VII - Conditions Precedent.................................................................. 52
Section 7.1. Initial Extension of Credit................................................... 52
Section 7.2. All Extensions of Credit...................................................... 55
ARTICLE VIII - Representations and Warranties....................................................... 56
Section 8.1. Existence and Authority....................................................... 56
Section 8.2. Financial Statements.......................................................... 56
Section 8.3. Corporate Action; No Breach................................................... 57
Section 8.4. Operation of Business......................................................... 57
Section 8.5. Litigation and Judgments...................................................... 57
Section 8.6. Rights in Properties; Liens................................................... 57
Section 8.7. Enforceability................................................................ 57
Section 8.8. Approvals..................................................................... 58
Section 8.9. Debt.......................................................................... 58
Section 8.10. Taxes......................................................................... 58
Section 8.11. Use of Proceeds; Margin Securities............................................ 58
Section 8.12. ERISA......................................................................... 58
Section 8.13. Disclosure.................................................................... 58
Section 8.14. Subsidiaries; Foreign Affiliates.............................................. 59
Section 8.15. Agreements.................................................................... 59
Section 8.16. Compliance with Laws.......................................................... 59
Section 8.17. Investment Company Act........................................................ 59
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TABLE OF CONTENTS
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(continued)
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Section 8.18. Public Utility Holding Company Act............................................ 59
Section 8.19. Environment Matters........................................................... 59
Section 8.20. Patents, Trademarks and Copyrights............................................ 60
Section 8.21. Relationship to the Banks..................................................... 60
Section 8.22. Government Regulation......................................................... 60
Section 8.23. Foreign Employee Benefit Matters.............................................. 60
Section 8.24. Year 2000 Compliance.......................................................... 60
ARTICLE IX - Affirmative Covenants................................................................. 61
Section 9.1. Reporting Requirements........................................................ 61
Section 9.2. Maintenance of Existence; Conduct of Business................................. 63
Section 9.3. Maintenance of Properties..................................................... 63
Section 9.4. Taxes and Claims.............................................................. 63
Section 9.5. Insurance..................................................................... 64
Section 9.6. Inspection Rights............................................................. 64
Section 9.7. Keeping Books and Records..................................................... 64
Section 9.8. Compliance with Laws and Agreements........................................... 64
Section 9.9. Further Assurances............................................................ 64
Section 9.10. ERISA......................................................................... 65
Section 9.11. Foreign Employee Benefit Compliance........................................... 65
ARTICLE X - Negative Covenants...................................................................... 65
Section 10.1. Debt.......................................................................... 65
Section 10.2. Limitation on Liens........................................................... 66
Section 10.3. Mergers, Etc.................................................................. 67
Section 10.4. Restricted Payments........................................................... 67
Section 10.5. Loans and Investments......................................................... 68
Section 10.6. Transactions With Affiliates.................................................. 69
Section 10.7. Disposition of Assets......................................................... 70
Section 10.8. Prepayment of Debt............................................................ 70
Section 10.9. Nature of Business............................................................ 70
Section 10.10. Environmental Protection...................................................... 70
Section 10.11. Accounting.................................................................... 70
Section 10.12. Restrictive Agreements........................................................ 71
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TABLE OF CONTENTS
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(continued)
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ARTICLE XI - Financial Covenants.................................................................... 71
Section 11.1. Consolidated Tangible Net Worth............................................... 71
Section 11.2. Consolidated Interest Coverage Ratio.......................................... 71
Section 11.3. Companies Interest Coverage Ratio............................................. 71
Section 11.4. Minimum Turnover Ratio........................................................ 72
Section 11.5. Consolidated Funded Debt to Consolidated Cash Flow Ratio...................... 72
Section 11.6. Consolidated Senior Debt to Consolidated Cash Flow Ratio...................... 72
ARTICLE XII - Default............................................................................... 72
Section 12.1. Events of Default............................................................. 72
Section 12.2. Remedies Upon Default......................................................... 74
Section 12.3. Cash Collateral............................................................... 75
Section 12.4. Performance by the Agent...................................................... 75
ARTICLE XIII - The Agent............................................................................ 75
Section 13.1. Appointment, Powers and Immunities............................................ 75
Section 13.2. Rights of Agent as a Bank..................................................... 77
Section 13.3. Sharing of Payments, Etc...................................................... 77
Section 13.4. INDEMNIFICATION............................................................... 77
Section 13.5. Independent Credit Decisions.................................................. 78
Section 13.6. Several Commitments........................................................... 79
Section 13.7. Successor Agent............................................................... 79
ARTICLE XIV - Miscellaneous......................................................................... 79
Section 14.1. Expenses...................................................................... 79
Section 14.2. INDEMNIFICATION............................................................... 80
Section 14.3. Limitation of Liability....................................................... 81
Section 14.4. No Fiduciary Relationship..................................................... 81
Section 14.5. No Waiver; Cumulative Remedies................................................ 81
Section 14.6. Successors and Assigns........................................................ 81
Section 14.7. Survival...................................................................... 84
Section 14.8. ENTIRE AGREEMENT.............................................................. 85
Section 14.9. Amendments, Etc............................................................... 85
Section 14.10. Maximum Interest Rate......................................................... 85
Section 14.11. Notices....................................................................... 86
Section 14.12. GOVERNING LAW; VENUE; SERVICE OF PROCESS...................................... 86
Section 14.13. Hedging Obligations........................................................... 87
Section 14.14. Counterparts.................................................................. 89
Section 14.15. Severability.................................................................. 89
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TABLE OF CONTENTS
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(continued)
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Section 14.16. Headings...................................................................... 89
Section 14.17. Non-Application of Chapter 346 of Texas Finance Code.......................... 89
Section 14.18. Construction.................................................................. 89
Section 14.19. Independence of Covenants..................................................... 89
Section 14.20. WAIVER OF JURY TRIAL.......................................................... 89
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INDEX TO EXHIBITS
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Exhibit Description of Exhibit
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A-1 Form of Revolving Credit Note
A-2 Form of Swing Line Note
B Advance Request Form
C Letter of Credit Request Form
D Compliance Certificate
E Borrowing Base Certificate
F-1 Borrower Security Agreement
F-2 Guarantor Security Agreement
G Form of Pledge Agreement
H Guaranty
I-1 L/C Application for Standby Letters of Credit
I-2 L/C Application for Commercial Letters of Credit
J Assignment and Acceptance
K Contribution and Indemnification Agreement
L Account Information
M Consent, Ratification and Confirmation
INDEX TO SCHEDULES
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Schedule Description of Schedule
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8.5 Existing Litigation
8.9 Existing Debt
8.14 Subsidiaries and Foreign Affiliates
8.19 Environmental Matters
8.20 Patents, Trademarks and Copyrights
10.2 Existing Liens
AMENDED AND RESTATED CREDIT AGREEMENT
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THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as of
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August 2, 1999, is among CELLSTAR CORPORATION, a Delaware corporation (the
"Borrower"), each of the banks or other lending institutions which is or may
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from time to time become a signatory hereto or any successor or permitted
assignee thereof (each a "Bank" and, collectively, the "Banks"), THE FIRST
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NATIONAL BANK OF CHICAGO, as syndication agent (the "Syndication Agent"),
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NATIONAL CITY BANK, as documentation agent (the "Documentation Agent"), CHASE
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BANK OF TEXAS, NATIONAL ASSOCIATION (formerly known as Texas Commerce Bank
National Association), a national banking association ("CBT"), as agent for the
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Banks, as issuer of Letters of Credit hereunder, and as the swing line lender
(in such capacity, together with its successors in such capacity, the
"Administrative Agent"), and THE CHASE MANHATTAN BANK, as alternate currency
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agent (in such capacity, together with its successors in such capacity, the
"Alternate Currency Agency").
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R E C I T A L S:
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A. The Borrower, the Banks, The First National Bank of Chicago and
National City Bank, as Co-Agents, and Administrative Agent previously entered
into that certain Credit Agreement dated as of October 15, 1997, as amended by
(i) that certain First Amendment to Credit Agreement dated as of February 20,
1998, (ii) that certain Second Amendment to Credit Agreement dated as of July
24, 1998, (iii) that certain Third Amendment to Credit Agreement dated as of
September 11, 1998, (iv) that certain Fourth Amendment to Credit Agreement dated
as of March 5, 1999, and (v) that certain Fifth Amendment to Credit Agreement
dated as of April 8, 1999 (as amended, the "Existing Credit Agreement"),
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pursuant to which the Banks extended credit to the Borrower in the form of a
revolving credit facility, including (i) a sub-facility for the issuance of
letters of credit, (ii) a swing line facility and (iii) a sub-facility for
Alternate Currency Advances under the revolving credit facility, all on the
terms and conditions set forth therein.
B. The Banks are willing to extend credit to the Borrower in the form of a
revolving credit facility not to exceed an aggregate principal amount of
$115,000,000 (which commitment amount may be increased to $135,000,000 as
provided herein), including (i) a $30,000,000 sub-facility for the issuance of
letters of credit, (ii) a $5,000,000 swing line facility and (iii) a $25,000,000
sub-facility for Alternate Currency Advances under the revolving credit
facility, and CBT and Chase are willing to serve as Administrative Agent and
Alternate Currency Agent, respectively, upon and subject to the terms and
conditions set forth herein.
C. The parties hereto desire to amend the Existing Credit Agreement as
hereinafter provided and have agreed for purposes of clarity and ease of
administration, to amend the Existing Credit Agreement and then restate the
Existing Credit Agreement in its entirety by means of this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows, and the Existing Credit
Agreement is hereby amended and restated in its entirety as follows:
ARTICLE I
Definitions
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Section 1.1. Definitions. As used in this Agreement, the following term
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have the following meanings:
"A & S" means A & S Air Service, Inc., a Delaware corporation and a
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Subsidiary of CAS.
"ACC" means ACC-CellStar, Inc., a Delaware corporation and a
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Subsidiary of CellStar SA.
"Additional Costs" is defined in Section 5.1.
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"Administrative Questionnaire" means an administrative questionnaire
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in a form satisfactory to the Agent which each Bank shall complete and
provide to the Agent, setting forth such relevant information as Agent may
request regarding such Bank, including without limitation such Bank's
Applicable Lending Office for each Type of Advance.
"Advance" means an advance of funds by the Agent or the Banks or any
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one of them to the Borrower pursuant to Article II or Section 3.4,
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including without limitation Swingline Advances.
"Advance Request Form" means a certificate, in substantially the form
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of Exhibit B hereto, properly completed and signed by the Borrower
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requesting an Advance.
"Affiliate" means, as to any Person, any other Person (a) that
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directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that
directly or indirectly beneficially owns or holds five percent or more of
any class of voting stock of such Person; or (c) five percent or more of
the voting stock or other ownership, equity or voting interests of which is
directly or indirectly beneficially owned or held by the Person in
question. The term "control" means the possession, directly or indirectly,
of the power to direct or cause direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract,
or otherwise; provided, however, in no event shall the Agent or any Bank be
deemed an Affiliate of the Borrower, any of the Guarantors, any of the
Subsidiaries, or any of the Foreign Affiliates.
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"Agent" means (a) Chase, as Alternate Currency Agent, with respect to
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matters pertaining to Alternate Currency Advances, and (b) CBT, as
Administrative Agent, with respect to all other matters.
"Alternate Advance Rate Availability Period" means the period
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beginning on the date of this Agreement and ending on July 31, 2000 or such
earlier date as may be specified by notice from the Administrative Agent to
the Borrower in accordance with the following sentence. After the Banks
have received and reviewed the first Semiannual Collateral Audit conducted
after the date of this Agreement, if two or more Banks elect to terminate
the Alternate Advance Rate Availability Period on an earlier date, the
Administrative Agent shall notify the Borrower of such election and the
date on or after January 31, 2000 on which the Alternate Advance Rate
Availability Period shall terminate.
"Alternate Base Rate" means as of any date of determination, a rate
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per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%)
equal to the greater of (a) the Prime Rate in effect on such day, or (b)
the sum of the Federal Funds Effective Rate in effect on such day plus one-
half of one percent. If for any reason the Agent shall have determined
(which determination shall be prima facie correct) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure after diligent effort of the Agent to obtain
sufficient quotations in accordance with the definition of Federal Funds
Effective Rate, the Alternate Base Rate shall be determined without regard
to clause (b) of the first sentence of this definition, as appropriate,
until the circumstances giving rise to such inability no longer exist. Any
change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of
such change in the Prime Rate or the Federal Funds Effective Rate,
respectively, without notice to the Borrower.
"Alternate Currency" means the following so long as they are Eligible
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Currencies: British pounds sterling, Japanese yen, Canadian dollars, Hong
Kong dollars, Swedish krona, Mexican pesos and Euro Units. For purposes of
this definition of Alternate Currency, "Eligible Currency" means, subject
-----------------
to the provisions of Section 4.9, any currency other than Dollars that is
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readily available, freely traded, in which deposits are customarily offered
to banks in the London interbank market, convertible into Dollars in the
international interbank market and as to which an Equivalent Amount is
available in Dollars in the London interbank market (or other market where
the Agent's currency exchange operations in respect of the applicable
currency are then being conducted).
"Alternate Currency Advances" means Advances which are funded in
---------------------------
Alternate Currency and bear interest based upon the Alternate Currency
Rate.
"Alternate Currency Rate" means, for any Alternate Currency Advance
-----------------------
for any Interest Period therefor, an interest rate per annum determined by
the Agent by dividing: (i) the rate per annum determined by the Agent to
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be the rate per annum at which deposits in the relevant Alternate Currency
are offered by the Principal Office of the Agent
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to first class banks in the interbank euro alternate currency market
selected by the Agent at or before 11:00 a.m. (London time) (or as soon
thereafter as practicable) on the Quotation Day for a period equal to such
Interest Period and in an amount substantially equal to the amount of such
Alternate Currency Advance during such Interest Period; by (ii) Statutory
Reserves.
"Applicable Lending Office" means for each Bank and each Type of
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Advance, the lending office of such Bank (or of an Affiliate of such Bank)
designated for such Type of Advance in the Administrative Questionnaire or
such other office of such Bank (or of an Affiliate of such Bank) as such
Bank may from time to time specify to the Borrower and the Agent as the
office by which its Advances of such Type are to be made and maintained.
"Applicable Percentage" means, for any day, (a) with respect to
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Eurodollar Advances, the margin of interest over the Eurodollar Rate that
is applicable when any Applicable Rate based on the Eurodollar Rate is
determined under this Agreement, (b) with respect to Floating Rate
Advances, the margin of interest over the Alternate Base Rate that is
applicable when any Applicable Rate based on the Alternate Base Rate is
determined under this Agreement, (c) with respect to Alternate Currency
Advances, the margin of interest over the Alternate Currency Rate that is
applicable when any Applicable Rate based on the Alternate Currency Rate is
determined under this Agreement, (d) with respect to commitment fees
payable under Section 2.9, the commitment fee percentage that is applicable
-----------
when any such commitment fee is determined under this Agreement, and (e)
with respect to letter of credit fees payable under Section 3.5, the letter
-----------
of credit fee percentage that is applicable when any such letter of credit
fee is determined under this Agreement. The Applicable Percentage is
subject to adjustment (upwards or downwards, as appropriate) based on the
ratio of Consolidated Funded Debt to Consolidated Cash Flow. On each date
a Compliance Certificate is due under Section 9.1(d), the Applicable
--------------
Percentage shall be adjusted to reflect the Applicable Percentage
prescribed below for the ratio of Consolidated Funded Debt to Consolidated
Cash Flow as demonstrated by such Compliance Certificate. At all times
other than any Exception Period or Permitted Overadvance Period the
Applicable Percentage shall be as follows:
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Applicable
Percentage
Ratio of for Eurodollar Applicable
Consolidated Funded Advances and Margin Applicable
Debt to Consolidated Alternate for Floating Letter of Applicable
Cash Flow Currency Advances Rate Advances Credit Fees Commitment Fee
--------- ----------------- ------------- ----------- --------------
Less than 1.00 to 1.00 1.375% 0% 1.375% 0.250%
Greater than or equal to 1.500% 0% 1.500% 0.250%
1.00 to 1.00, but less
than 1.50 to 1.00
Greater than or equal to 1.750% 0.25% 1.750% 0.375%
1.50 to 1.00, but less
than 2.25 to 1.00
Greater than or equal to 2.000% 0.50% 2.000% 0.375%
2.25 to 1.00, but less
than 3.00 to 1.00
Greater than or equal to 2.250% 0.75% 2.250% 0.500%
3.00 to 1.00 but less
than 3.50 to 1.00
Greater than or equal to 2.500% 1.00% 2.500% 0.500%
3.50 to 1.00
During each Exception Period and during each Permitted Overadvance Period,
the Applicable Percentage shall be as follows:
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Applicable
Percentage
Ratio of for Eurodollar Applicable
Consolidated Funded Advances and Margin Applicable
Debt to Consolidated Alternate for Floating Letter of Applicable
Cash Flow Currency Advances Rate Advances Credit Fees Commitment Fee
--------- ----------------- ------------- ----------- --------------
Less than 1.00 to 1.00 1.625% 0.25% 1.625% 0.250%
Greater than or equal to 1.00 1.750% 0.25% 1.750% 0.250%
to 1.00, but less than 1.50
to 1.00
Greater than or equal to 1.50 2.000% 0.50% 2.000% 0.375%
to 1.00, but less than 2.25
to 1.00
Greater than or equal to 2.25 2.250% 0.75% 2.250% 0.375%
to 1.00, but less than 3.00
to 1.00
Greater than or equal to 3.00 2.500% 1.00% 2.500% 0.500%
to 1.00 but less than 3.50 to
1.00
Greater than or equal to 3.50 2.750% 1.25% 2.750% 0.500%
to 1.00
After each adjustment of the Applicable Percentage in accordance herewith
due to a change in the ratio of Consolidated Funded Debt to Consolidated
Cash Flow as demonstrated by the Compliance Certificate, the new Applicable
Percentage shall apply to all Advances made or outstanding thereafter until
the next date that a Compliance Certificate is due under Section 9.1(d) and
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demonstrates a change in the ratio of Consolidated Funded Debt to
Consolidated Cash Flow to an amount so that another Applicable Percentage
shall be applied. Upon the request of the Agent, the Borrower must
demonstrate to the reasonable satisfaction of the Agent the required
applicable ratio in order to obtain an adjustment to a lower Applicable
Percentage. If the Borrower fails to furnish to the Agent any Compliance
Certificate by the date required by this Agreement, then the maximum
Applicable Percentage shall apply at all times after such date for all
Advances made or outstanding after such date until the Borrower furnishes
the required Compliance Certificate to the Agent.
"Applicable Rate" means: (i) during the period that an Advance is a
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Floating Rate Advance (including, without limitation, the Swing Line
Advances), the Alternate Base Rate plus the Applicable Percentage; (ii)
during the period that an Advance is a Eurodollar Advance, the Eurodollar
Rate plus the Applicable Percentage; and (iii) during the period that an
Advance is an Alternate Currency Advance, the Alternate Currency Rate plus
the Applicable Percentage.
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"Assignment and Acceptance" means an assignment and acceptance entered
-------------------------
into by a Bank and its assignee and accepted by the Agent pursuant to
Section 14.6, in substantially the form of Exhibit J hereto.
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"Audiomex" means Audiomex Export Corp., a Texas corporation and a
--------
Subsidiary of NAC.
"Borrower Security Agreement" means the Security Agreement of the
---------------------------
Borrower dated as of October 15, 1997, executed by Borrower in favor of
Agent, a copy of which is attached hereto as Exhibit F-1, as the same may
-----------
be amended, supplemented, or modified from time to time.
"Borrowing Base" means:
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(a) at any time other than during any Exception Period, an amount
equal to the sum of (i) 80% of the Eligible Accounts, plus (ii) the
lesser of the Inventory Cap or 50% of Eligible Inventory; and
(b) at any time during each Exception Period, an amount equal to
the sum of (i) either 80% or 85% of the Eligible Accounts, as selected
by the Borrower in the Borrowing Base Report, plus (ii) the lesser of
Inventory Cap or either 50% or 65% of Eligible Inventory, as selected
by the Borrower in the Borrowing Base Report; provided, however, that
in the event the information delivered to the Agent with any Borrowing
Base Report furnished pursuant to Section 9.1(i) during any Exception
Period shows that less than 65% of Eligible Inventory is Price
Protected Inventory, as of the last day of the month for which such
Borrowing Base Report was delivered, the advance rate for Eligible
Inventory shall be 50% until the Borrowing Base Report and related
information delivered during such Exception Period pursuant to Section
9.1(i) for any month show that at least 65% of Eligible Inventory is
Price Protected Inventory, as of the last day of such month.
If the Banks so elect, the Borrowing Base shall also include such portion
of Credit Insured Accounts as the Banks shall elect. The Banks shall have
no obligation to allow any of the Credit Insured Accounts to be included in
the Borrowing Base. Any election by the Banks to include Credit Insured
Accounts in the Borrowing Base and any election regarding the amount or
percentage of Credit Insured Accounts to be included in the Borrowing Base
shall require the unanimous approval of all of the Banks, which approval
may be given or withheld in the exercise of each Bank's sole and absolute
discretion.
"Business Day" means (a) any day (other than a Saturday or Sunday) on
------------
which national banks in Dallas, Texas are open for the conduct of
commercial banking business, and (b) with respect to all borrowings,
payments, Conversions, Continuations, Interest Periods, and notices in
connection with each Eurodollar Advance or Alternate Currency Advance, any
day which is a Business Day described in clause (a) above and which is also
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a day on which
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dealings in Dollar or Alternate Currency deposits are carried out in the
relevant interbank market referred to by the Agent to determine the
Eurodollar Rate for such Eurodollar Advance or the Alternate Currency Rate
for such Alternate Currency Advance and which is also a day on which banks
and foreign exchange markets are open for business in London and (if
applicable) for the purpose of payments in an Alternate Currency in the
principal financial center of the country of such currency; provided,
however, that with respect to any amount denominated or to be denominated
in the Euro Unit or a National Currency Unit, "Business Day" means a day
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(other than a Saturday or Sunday) on which banks are generally open for
business in London, in Dallas, Texas and in Frankfurt am Main, Germany (or
such principal financial center or centers in such Participating Member
State(s) as the Agent may from time to time nominate for this purpose).
"Capital Lease Obligations" means, as to any Person, the obligations
-------------------------
of such Person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) real and/or personal property, which
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP. For purposes of this
Agreement, the amount of such Capital Lease Obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"CAS" means CellStar Air Services, Inc., a Delaware corporation and a
---
Subsidiary of the Borrower.
"CellStar Asia" means CellStar (Asia) Corporation LTD., a Hong Kong
-------------
corporation and a Subsidiary of CellStar International.
"CellStar Global" means CellStar Global Satellite Service, Ltd., a
---------------
Texas limited partnership.
"CellStar International" means CellStar International
----------------------
Corporation/Asia, a Delaware corporation and a Subsidiary of NAC.
"CellStar Ireland" means CellStar Ireland, a United Kingdom company
----------------
resident in Ireland and a Subsidiary.
"CellStar SA" means CellStar International Corporation/SA, a Delaware
-----------
corporation and a Subsidiary of NAC.
"CellStar Telecom" means CellStar Telecom, Inc., a Delaware
----------------
corporation and a Subsidiary of the Borrower.
"Celular Express" means Celular Express S.A. de C.V., a Mexico
---------------
corporation and a Subsidiary of Audiomex.
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"Change of Control" means any of the following:
-----------------
(a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
other than an Excluded Person is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, as amended, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of 30% or
more of the combined voting stock of Borrower ordinarily having the
right to vote at an election of directors; provided that no Change of
Control shall be deemed to have occurred from a transfer of the
Borrower's voting securities by Xx. Xxxx X. Xxxxxxxxx ("Goldfield") to
---------
(i) a member of Goldfield's immediate family (determined in accordance
with Rule 16a-1(e) of the Securities Exchange Act of 1934, as amended)
either during Goldfield's lifetime or by will or the laws of descent
and distribution; (ii) any trust as to which Goldfield or a member of
(or members) of his immediate family is the sole beneficiary; (iii)
any trust as to which Goldfield is the settlor and the sole trustee
with sole power to revoke; (iv) any entity over which Goldfield has
the power, directly or indirectly, to direct or cause the direction of
the management and policies of the entity, whether through the
ownership of voting securities, by contract or otherwise or (v) any
charitable trust, foundation or corporation under Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended, that is funded and
controlled by Goldfield; provided, further, that any further transfer
by any of the foregoing Persons is not excluded from being deemed a
Change of Control if such further transfer is to a person or group
other than those specified in clauses (i) through (v) above;
----------- ---
(b) during any period of 12 consecutive calendar months,
individuals:
(i) who were directors of Borrower on the first day of such
period, or
(ii) whose election or nomination for election to the board
of directors of Borrower was recommended or approved by at least
a majority of the directors then still in office who were
directors of Borrower on the first day of such period, or whose
election or nomination for election was so approved,
shall cease to constitute a majority of the board of directors of
Borrower;
(c) Both Xxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxxx shall at any time
cease to be involved in the management of the Borrower and NAC (other
than temporary absences for any period of time not longer than 60
days); and
-9-
(d) The occurrence of a Change of Control (as defined in the
Subordinated Note Documents).
"Code" means the Internal Revenue Code of 1986, as amended, and the
----
regulations promulgated and rulings issued thereunder.
"Collateral" is defined in Section 6.1.
---------- -----------
"Commencement of the Third Stage of EMU" means January 1, 1999, the
--------------------------------------
date of commencement of the third stage of EMU.
"Commitment" means (i) as to the Administrative Agent, the obligation
----------
of the Administrative Agent to make Swing Line Advances pursuant to Section
-------
2.2 and issue Letters of Credit pursuant to Section 3.1, and (ii) as to
--- -----------
each Bank, the obligation of such Bank to make Advances pursuant to
Sections 2.1 and 2.2 and participate in Letters of Credit pursuant to
------------ ---
Sections 3.1 and 3.3 in an aggregate principal amount at any time
------------ ---
outstanding up to but not exceeding the amount set forth below opposite the
name of such Bank under the heading "Commitment":
Bank Commitment
---- ----------
CBT $25,000,000
The First National Bank of Chicago $25,000,000
National City Bank $25,000,000
Credit Lyonnais New York Branch $20,000,000
Xxxxx Fargo Bank (Texas), National Association $20,000,000
, or the Commitment amount assigned or retained pursuant to an Assignment
and Acceptance, or the Commitment amount for such Bank specified in
documentation executed pursuant to Section 2.12; in each case, as such
------------
amount may be reduced pursuant to Section 2.10 or terminated pursuant to
------------
Section 2.10 or Section 12.2; provided, however, that with regard to CBT's
------------ ------------
Commitment, the commitment to make Alternate Currency Advances shall be the
commitment of Chase. Notwithstanding anything to the contrary contained
herein, CBT shall have no commitment to make Alternate Currency Advances,
and Chase shall have no commitment to make any Advances other than
Alternate Currency Advances.
"Commitment Percentage" means, at any time for any Bank, the
---------------------
proportion (stated as a percentage) that its Commitment under this
Agreement bears to the Banks' total Commitments under this Agreement;
provided, however, that except as otherwise provided herein, the Commitment
Percentages of the Banks shall be determined without regard to
-10-
Chase, and references herein to the Commitment Percentages of the Banks shall
not include Chase.
"Companies" means, collectively, the Partnerships, NAC and each other
---------
Domestic Subsidiary that owns accounts and inventory in which Agent has a first
priority perfected security interest.
"Companies Cash Flow" means, for any period, the sum of the following,
-------------------
calculated on a combined basis for the Companies, without duplication:
(a) the amount of net income for such period (whether positive or
negative) before interest expense, income taxes and extraordinary items,
net of
(b) all non-cash items (such as deferred taxes, depreciation,
amortization of goodwill and all other non-cash charges accrued but not
actually paid) which, in determining net income for such period, were
deducted from (or included in) gross income for such period; provided,
however, that in calculating Companies Cash Flow (i) changes in the
allowance for doubtful accounts shall not be treated as a non-cash item for
purposes of such calculation, (ii) special charges in the aggregate amount
of $20,382,000 recorded in the quarter ending November 30, 1998, for the
settlement of the shareholder lawsuit and a charge taken as part of
Borrower's strategic repositioning, shall be excluded from the calculation
of Companies Cash Flow, and (iii) non-recurring charges in an amount not to
exceed $8,000,000 recorded in the quarter ending May 31, 1999, for the
reorganization of the Borrower's operations in the United States of America
and Asia, shall be excluded from the calculation of Companies Cash Flow.
"Compliance Certificate" means a certificate of the president, chief
----------------------
executive officer, chief financial officer or corporate controller of the
Borrower, in the form of Exhibit D hereto, with appropriate completions.
"Consent, Ratification and Confirmation" means that certain Consent,
--------------------------------------
Ratification and Confirmation in substantially the form of Exhibit M hereto,
---------
executed by the parties thereto.
"Consolidated Average Inventory" means, as of the end of each fiscal
------------------------------
quarter of the Borrower, the average inventory of the Borrower and the
Subsidiaries on a consolidated basis for the period of the four fiscal quarters
then ended, calculated as follows: (a) the sum obtained by adding together the
Consolidated Average Inventory Per Quarter for each of such four fiscal
quarters, divided by (b) four.
"Consolidated Average Inventory Per Quarter" means, for any fiscal
------------------------------------------
quarter of the Borrower, the following for the Borrower and the Subsidiaries on
a consolidated basis: (a) the sum of (i) the beginning inventory amount for such
quarter, plus (ii) the ending inventory amount for such quarter, divided by (b)
two.
-11-
"Consolidated Cash Flow" means, for any period, the sum of the following,
----------------------
calculated on a consolidated basis for the Borrower and the Subsidiaries without
duplication:
(a) the amount of net income for such period (whether positive or
negative) before interest expense, income taxes and extraordinary items,
net of
(b) all non-cash items (such as deferred taxes, depreciation,
amortization of goodwill and all other non-cash charges accrued but not
actually paid) which, in determining net income for such period, were
deducted from (or included in) gross income for such period; provided,
however, that in calculating Consolidated Cash Flow, changes in the
allowance for doubtful accounts shall not be treated as a non-cash item for
purposes of such calculation.
"Consolidated Cost of Goods Sold" means, as of the end of each fiscal
-------------------------------
quarter of the Borrower, the cost of goods sold for the Borrower and the
Subsidiaries on a consolidated basis in the period of the four fiscal quarters
then ended.
"Consolidated Funded Debt" means, at any particular time, the sum of the
------------------------
following, calculated on a consolidated basis for the Borrower and the
Subsidiaries in accordance with GAAP:
(a) all obligations for borrowed money (whether as a direct obligor
on a promissory note, bond, debenture or other similar instrument, as a
reimbursement obligor with respect to an issued letter of credit or similar
instrument, as an obligor under a Guarantee of borrowed money, or as any
other type of direct or contingent obligor), plus (but without duplication)
----
(b) all Capital Lease Obligations (other than the interest component
of such obligations).
"Consolidated Senior Debt" means Consolidated Funded Debt other than
------------------------
Subordinated Debt.
"Consolidated Tangible Net Worth" means, at any particular time, all
-------------------------------
amounts which, in conformity with GAAP, would be included as stockholders' or
owners' equity on a consolidated balance sheet of the Borrower and the
Subsidiaries; provided, however, there shall be excluded therefrom: (a) any
amount at which shares of capital stock of any Person appear as an asset on the
balance sheet of such Person, (b) goodwill, including any amounts, however
designated, that represent the excess of the purchase price paid for assets or
stock over the value assigned thereto, (c) patents, trademarks, trade names, and
copyrights, (d) deferred expenses, (e) loans and advances to any stockholder,
director, officer, partner, or employee of the Borrower, any Subsidiary, or any
Affiliate of the Borrower or any Subsidiary, and (f) all other assets which are
properly classified as intangible assets.
-12-
"Continue", "Continuation", and "Continued" shall refer to the continuation
-------- ------------ ---------
pursuant to Section 2.7 of (a) a Eurodollar Advance as a Eurodollar Advance from
-----------
one Interest Period to the next Interest Period and (b) an Alternate Currency
Advance as an Alternate Currency Advance from one Interest Period to the next
Interest Period.
"Contribution and Indemnification Agreement" means that certain
------------------------------------------
Contribution and Indemnification Agreement in substantially the form of Exhibit
-------
K hereto, executed by the Borrower and the Guarantors, as the same may be
-
amended, supplemented or modified from time to time.
"Convert", "Conversion", and "Converted" shall refer to a conversion
------- ---------- ---------
pursuant to Section 2.7 or Article V of one Type of Advance into another Type
----------- ---------
of Advance.
"Credit Insured Accounts" means (a) all accounts receivable that do not
-----------------------
meet the requirements of clauses (b), (j) or (p) of the definition of "Eligible
----------------------- --------
Accounts" set forth in this Section 1.1 but are otherwise Eligible Accounts,
-------- -----------
provided that (i) such account is supported by a policy of credit insurance in
an amount and in all other respects satisfactory to all of the Banks and issued
by an insurance company satisfactory to all of the Banks, (ii) the rights of the
owner of such account under such insurance policy have been transferred and
assigned to the Agent, or the Agent has been named as a loss payee under such
insurance policy, all in a manner and pursuant to documentation satisfactory to
all of the Banks and for sufficient consideration, (iii) the original (or a copy
if acceptable to the Banks) of such insurance policy has been delivered to the
Agent, (iv) the Person transferring such insurance policy to the Agent has the
corporate power and authority to transfer and assign to the Agent any and all
such insurance policies, and (v) all of the Banks have approved inclusion of
such account receivable in the Borrowing Base and all requirements of each Bank
for such approval have been satisfied in full, and (b) Eligible Foreign
Accounts.
"CWI" means CellStar West, Inc., a Delaware corporation and a Subsidiary of
---
NAC.
"Debt" means as to any Person at any time (without duplication): (a) all
----
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, notes, debentures, or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable of such Person arising in the ordinary
course of business (including ordinary and customary duties related to purchases
of inventory by Foreign Subsidiaries and Foreign Affiliates from or financed by
the Companies, or any of them), (d) all Capital Lease Obligations of such
Person, (e) all Debt or other obligations of others Guaranteed by such Person,
except Guarantees by the Borrower or any Subsidiary of any obligations of any
other Subsidiary which obligations do not otherwise constitute Debt, provided
that each payment under any such Guarantee shall be treated as either a loan or
a capital contribution, as appropriate, to a Subsidiary and any such loans or
capital contributions to Subsidiaries other than Guarantors shall be subject to
the limitations set forth in subsections (F) and (H) of Section 10.5(i), (f) all
--------------- --- ---------------
obligations secured by a Lien existing on property owned by such Person, whether
or not the obligations secured
-13-
thereby have been assumed by such Person or are non-recourse to the credit of
such Person, (g) all reimbursement obligations of such Person (whether
contingent or otherwise) in respect of letters of credit, bankers' acceptances,
surety or other bonds and similar instruments, and (h) all liabilities of such
Person in respect of unfunded vested benefits under any Plan.
"Default" means an Event of Default or the occurrence of an event or
-------
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means the Maximum Rate or, if no Maximum Rate exists the sum
------------
of the Alternate Base Rate in effect from day to day plus four percent.
"Dollars" and "$" mean lawful money of the United States of America.
------- -
"Domestic Subsidiary" means any Subsidiary which is domiciled in the United
-------------------
States of America.
"Eligible Accounts" means, at any time, all accounts receivable of the
-----------------
Companies, or any of them, created in the ordinary course of business that are
acceptable to the Agent in its sole discretion and satisfy the following
conditions:
(a) The account complies with all applicable laws, rules, and
regulations, including, without limitation, usury laws, the Federal Truth
in Lending Act, and Regulation Z of the Board of Governors of the Federal
Reserve System;
(b) The account has not been outstanding for more than 90 days past
the original date of invoice;
(c) The account was created in connection with (i) the sale of goods
by any Company in the ordinary course of business and such sale has been
consummated and such goods have been shipped and delivered and received by
the account debtor, or (ii) the performance of services by any Company in
the ordinary course of business and such services have been completed and
accepted by the account debtor;
(d) The account arises from an enforceable contract, the performance
of which has been completed by any Company;
(e) The account does not include any progress xxxxxxxx;
(f) The account does not arise from the sale of any good that is on a
xxxx-and-hold, guaranteed sale, sale-or-return, sale on approval,
consignment, or any other repurchase or return basis;
-14-
(g) Any Company has good and indefeasible title to the account and
the account is not subject to any Lien except Liens in favor of the Agent
and Liens permitted by Section 10.2;
------------
(h) The account does not arise out of a contract with or order from,
an account debtor that, by its terms, prohibits or makes void or
unenforceable the grant of a security interest by any Company to the Agent
in and to such account;
(i) The account is not subject to any setoff, counterclaim, defense,
dispute, recoupment, or adjustment other than normal discounts for prompt
payment or contra accounts as set forth below;
(j) The account debtor is not insolvent or the subject of any
bankruptcy or insolvency proceeding and has not made an assignment for the
benefit of creditors, suspended normal business operations, dissolved,
liquidated, terminated its existence, ceased to pay its debts as they
become due, or suffered a receiver or trustee to be appointed for any of
its assets or affairs;
(k) The account is not evidenced by chattel paper or an instrument ;
(l) No default exists under the account by any party thereto;
(m) The account debtor has not returned or refused to retain, or
otherwise notified any Company of any dispute concerning, or claimed
nonconformity of, any of the goods from the sale of which the account
arose;
(n) The account is not owed by an employee or Affiliate of any
Company, including without limitation any Foreign Subsidiary or Foreign
Affiliate, except for accounts owed by Xxxx Telecom for sales of inventory
by any Company to Xxxx Telecom in the ordinary course of the Companies'
business;
(o) The account is payable in Dollars by the account debtor;
(p) If the account debtor is domiciled in any country other than the
United States of America the account shall be ineligible to the extent all
such accounts exceed $15,000,000 in the aggregate;
(q) All accounts owed by any account debtor shall be ineligible if
more than 20% of the aggregate balances then outstanding on accounts owed
by such account debtor and its Affiliates to the Companies on a
consolidated basis have been outstanding for more than 90 days past the
dates of their original invoices;
(r) All accounts owed by any account debtor shall be ineligible if
the aggregate balances then outstanding on accounts owed by such account
debtor and
-15-
its Affiliates to the Companies on a consolidated basis constitute more
than 10% of the total accounts receivable of the Companies on a
consolidated basis;
(s) The account shall be ineligible if the account debtor is the
United States of America or any department, agency, or instrumentality
thereof, and the Federal Assignment of Claims Act of 1940, as amended,
shall not have been complied with.
The amount of the Eligible Accounts owed by an account debtor to any
Company shall be reduced by the amount of all "contra accounts" and other
obligations which are owed by any Company to such account debtor and either (i)
are payable pursuant to terms which are not ordinary and customary, as
determined by Agent in its sole discretion, or (ii) are past due or otherwise in
default. The amount of the Eligible Accounts owed by an account debtor to any
Company shall be reduced by the amount of all past due credits owed by any
Company to such account debtor.
"Eligible Assignee" means any commercial bank, savings and loan
-----------------
association, savings bank, finance company, insurance company, mutual fund, or
other financial institution (whether a corporation, partnership, or other
entity) acceptable to the Agent.
"Eligible Foreign Accounts" means all Foreign Accounts that do not meet the
-------------------------
requirements of clauses (b), (j), (o) or (p) of the definition of "Eligible
--------
Accounts" set forth in this Section 1.1 but are otherwise Eligible Accounts
-------- -----------
(determined as provided below), provided that (a) the Agent has been granted a
valid and perfected first priority security interest in such account pursuant to
documentation satisfactory in all respects to all of the Banks, (b) such account
is either (i) secured by a transferable letter of credit in an amount and in all
respects satisfactory to all of the Banks and issued by a bank satisfactory to
all of the Banks, or (ii) supported by a policy of insurance issued by the
Export-Import Bank of the United States in an amount satisfactory to all of the
Banks or a policy of insurance in an amount and in all other respects
satisfactory to all of the Banks and issued by an insurance company satisfactory
to all of the Banks, (c) the rights of the owner of such account under such
letter of credit or insurance policy have been transferred and assigned to the
Agent, or the Agent has been named as loss payee under such insurance policy,
all in a manner and pursuant to documentation satisfactory to all of the Banks
and for sufficient consideration, (d) the original (or a copy if acceptable to
the Banks) of such letter of credit or insurance policy has been delivered to
the Agent, (e) the Person transferring such letter of credit or insurance policy
to the Agent has the corporate power and authority to transfer and assign to the
Agent any and all letters of credit and insurance policies securing or
supporting any Eligible Foreign Accounts of such Person, and (f) all of the
Banks have approved inclusion of such account in the Borrowing Base and all
requirements of each Bank for such approval have been satisfied in full. For
purposes of determining whether any Foreign Account is an Eligible Account, each
reference to "Company" or "Companies" in such definition shall instead be a
reference to the owner of such Foreign Account.
-16-
"Eligible Inventory" means, at any time, all inventory of finished goods
------------------
then owned by (and in the possession or under the control of) the Companies, or
any of them, and held for sale or disposition in the ordinary course of the
Companies' business, in which the Agent has a perfected, first priority security
interest, valued at the lower of (i) actual cost for the purchase of such
inventory from the original wholesale supplier or (ii) fair market value.
Eligible Inventory shall not include (a) work-in-process inventory (for purposes
of this Agreement, finished goods which are in the process of being packaged
into kits shall not be considered work-in-process inventory), (b) the value of
the obsolescence reserve, (c) inventory that has been shipped or delivered to a
customer on consignment, a sale-or-return basis, or on the basis of any similar
understanding, (d) inventory that is in transit for any reason, except inventory
in transit from Motorola, Nokia or Ericsson to the Companies' main warehouse in
Carrollton, Texas, the Companies' warehouse with Circle Freight at XXX Xxxxxxx,
Xxxxx, or any of the Companies' warehouses in Miami, Florida or Chino,
California, which is properly documented and insured pursuant to shipping
documents and insurance, and proof thereof, satisfactory to the Agent in all
respects in the exercise of the Agent's sole and absolute discretion, (e)
inventory that is offsite for any reason, except offsite inventory covered by a
waiver and agreement satisfactory to the Agent in all respects in the exercise
of the Agent's sole and absolute discretion, executed by the owner and lessee of
the premises where such inventory is located, (f) service or repair parts or
equipment, (g) inventory located at any location for which a landlord's waiver
is required to be delivered under the Loan Documents and has not been received
by the Agent, (h) inventory with respect to which a claim exists disputing the
Companies' title to or right to possession of such inventory, (i) inventory that
is not in good condition or does not comply with any applicable law, rule, or
regulation or any standard imposed by any Governmental Authority with respect to
its manufacturer, use, or sale, (j) inventory located outside of the United
States of America, and (k) inventory that the Agent, in its sole discretion, has
determined to be unmarketable.
"EMU" means the economic and monetary union as contemplated in the Treaty
---
on European Union.
"EMU Legislation" means legislative measures of the European Council for
---------------
the introduction of, changeover to, or operation of, a single or unified
European currency, being in part the implementation of the third stage of EMU.
"Environmental Laws" means any and all United States of America federal,
------------------
state, and local laws, regulations, and requirements pertaining to health,
safety, or the environment.
"Environmental Liabilities" means all liabilities, obligations,
-------------------------
responsibilities, remedial actions, losses, damages, punitive damages,
consequential damages, treble damages, costs, expenses, fines, penalties,
sanctions, and interest arising from environmental, health or safety conditions
or the release or threatened release of a Hazardous Material into the
environment, resulting from the past, present, or future operations of the
Borrower or any Subsidiary.
-17-
"Equivalent Amount" means (a) the equivalent in Dollars of any Alternate
-----------------
Currency and (b) the equivalent in any Alternate Currency of Dollars. For
purposes of this Agreement, each Equivalent Amount shall be determined by using
the quoted spot rate at which the Alternate Currency Agent or any affiliate of
the Alternate Currency Agent offers to exchange Dollars for such Alternate
Currency at 11:00 A.M. Dallas, Texas time two Business Days prior to the date on
which such equivalent is to be determined pursuant to the provisions of this
Agreement. The Agent shall notify each affected Bank of such determination on
such date. The Equivalent Amount of each Advance made in Alternate Currency
shall be recalculated hereunder on each date it is necessary to determine the
unused portion of each Bank's Commitment or any Advances outstanding on such
date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
---------------
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or any Guarantor or is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower or
any Guarantor.
"Euro" means the single currency of Participating Member States.
----
"Euro Unit" means the currency unit of the Euro.
---------
"Eurodollar Advances" means Advances which are funded in Dollars and bear
-------------------
interest at rates determined on the basis of the rates referred to in the
definition of "Eurodollar Rate" in this Section 1.1.
-----------
"Eurodollar Rate" means, for any Eurodollar Advance for any Interest Period
---------------
therefor, an interest rate per annum determined by the Agent by dividing: (i)
--------
the rate per annum equal to the annual rate of interest shown on the appropriate
reference page of Reuters America, Inc. at or before 11:00 a.m. (London time)
(or as soon thereafter as practicable) on the Quotation Day for a period equal
to such Interest Period, or if such page is not available, the annual rate of
interest shown on the Bloomberg Screen British Banker's LIBOR Fixing at or
before 11:00 a.m. (London time) (or as soon thereafter as practicable) for a
period equal to such Interest Period, or if neither of the foregoing is
available, the rate per annum determined by the Agent to be the rate per annum
at which deposits of Dollars are offered by the Principal Office of the Agent to
first class banks in the interbank Eurodollar market selected by the Agent at or
before 11:00 a.m. (London time) (or as soon thereafter as practicable) on the
Quotation Day for a period equal to such Interest Period and in an amount
substantially equal to the amount of such Eurodollar Advance during such
Interest Period; by (ii) Statutory Reserves.
"Event of Default" is defined in Section 12.1.
---------------- ------------
-18-
"Exception Period" means each period from and including the date of
----------------
delivery to the Agent of any Borrowing Base Report that specifies an advance
rate percentage of 85% for Eligible Accounts or an advance rate percentage of
65% for Eligible Inventory to but excluding the date of delivery to the Agent of
any Borrowing Base that specifies an advance rate percentage of 80% for Eligible
Accounts and an advance rate percentage of 50% for Eligible Inventory.
"Excluded Person" means (a) Xxxx X. Xxxxxxxxx, (b) a trustee or other
---------------
fiduciary holding securities under an employee benefit plan of the Borrower and
acting in such capacity, and (c) a corporation owned, directly or indirectly, by
the stockholders of the Borrower in substantially the same proportions as their
ownership of voting securities of the Borrower.
"Federal Funds Effective Rate" means, for any day, the rate per annum
----------------------------
determined by the Agent to be equal to the weighted average of the rate on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, New York, or if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three Federal Funds
brokers of recognized standing selected by the Agent in its sole discretion. The
determination by the Agent of the rate of interest per annum provided above
shall be conclusive absent manifest error.
"Fee Letter" means that certain Fee Letter, dated June 17, 1999, among the
----------
Borrower, CBT and Chase Securities, Inc.
"Financo" means CellStar Financo, Inc., a Delaware corporation and a
-------
Subsidiary of Borrower.
"FIRA" is defined in Section 8.21.
---- ------------
"Floating Rate Advances" means Advances which are funded in Dollars and
----------------------
bear interest based upon the Alternate Base Rate, including without limitation,
Swing Line Advances.
"Florida Properties" means Florida Properties, Inc., a Texas corporation
------------------
and a Subsidiary of Holdings.
"Foreign Accounts" means all accounts receivable of any Foreign Subsidiary
----------------
or Foreign Affiliate.
-19-
"Foreign Affiliate" means any Person in which the Borrower or any
-----------------
Subsidiary has an equity or ownership interest equal to or less than 50% and
which is organized or domiciled in any country other than the United States of
America.
"Foreign Employee Benefit Plan" means any employee benefit plan as defined
-----------------------------
in Section 3(3) of ERISA which is maintained or contributed to for the benefit
of the employees of Borrower, any of its Subsidiaries or any Affiliates and is
not covered by ERISA pursuant to ERISA Section 4(b)(4).
"Foreign Pension Plan" means any employee benefit plan as described in
--------------------
Section 3(3) of ERISA which (a) is maintained or contributed to for the benefit
of employees of Borrower, any of its Subsidiaries or any of its ERISA
Affiliates, (b) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA,
and (c) under applicable local law, is required to be funded through a trust or
other funding vehicle.
"Foreign Subsidiary" means any Subsidiary which is organized or domiciled
------------------
in any country other than the United States of America.
"Fulfillment" means CellStar Fulfillment, Inc., a Delaware corporation, a
-----------
Subsidiary of the Borrower and general partner of CellStar Fulfillment, Ltd.
"GAAP" means generally accepted accounting principles, applied on a
----
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants and/or in statements of
the Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting principles
applied in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"Governmental Authority" means any nation or government, any state or
----------------------
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
---------
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect the obligee
against loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements
-20-
for collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Guaranteed Obligations" has the meaning specified in Section 14.13.
---------------------- -------------
"Guaranties" means the guaranties heretofore executed by the Guarantors in
----------
favor of the Agent and the Banks, as ratified and confirmed pursuant to the
Consent, Ratification and Confirmation, and all guaranties hereafter executed by
Guarantors, each in substantially the form of Exhibit H hereto, as the same may
---------
be amended, supplemented or modified from time to time.
"Guarantor Security Agreements" means the security agreements heretofore
-----------------------------
executed by the Guarantors in favor of the Agent, as ratified and confirmed
pursuant to the Consent, Ratification and Confirmation, and all security
agreements hereafter executed by Guarantors, each in substantially the form of
Exhibit F-2 hereto, as the same may be amended,supplemented or modified from
-----------
time to time.
"Guarantors" means, collectively, the Partnerships, NAC, ACC, Financo, CWI,
----------
Holdings, Fulfillment, CellStar International, Audiomex, CellStar SA, CAS, A &
S, CellStar Telecom and Florida Properties and each other Subsidiary that at any
time executes a Guaranty in favor of the Agents and the Banks.
"Hazardous Material" means any substance, product, waste, pollutant,
------------------
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law, including,
without limitation, asbestos, petroleum, and polychlorinated biphenyls.
"Hedging Obligations" of a Person means any and all obligations of such
-------------------
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collateral protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Holdings" means NAC Holdings, Inc., a Nevada corporation, a Subsidiary of
--------
the Borrower and the limited partner of the Partnerships.
"Interest Coverage Ratio" means the ratio of (a) Consolidated Cash Flow to
-----------------------
(b) interest expense of the Borrower and the Subsidiaries on a consolidated
basis.
-21-
"Interest Period" means with respect to any Eurodollar Advances or
---------------
Alternate Currency Advances, each period commencing on the date such Advances
are made or Converted from Floating Rate Advances or, in the case of each
subsequent, successive Interest Period applicable to a Eurodollar Advance or an
Alternate Currency Advance, the last day of the next preceding Interest Period
with respect to such Advance, and ending on the numerically corresponding day in
the first, second, or third calendar month thereafter, as the Borrower may
select as provided in Section 2.6 or 2.7 hereof, except that each such Interest
----------- ---
Period which commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (a) each Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day (or, if such succeeding Business Day falls
in the next succeeding calendar month, on the next preceding Business Day); (b)
any Interest Period which would otherwise extend beyond the Termination Date
shall end on the Termination Date; (c) no more than five Interest Periods for
Eurodollar Advances shall be in effect at the same time; (d) no more than five
Interest Periods for Alternate Currency Advances shall be in effect at the same
time; and (e) no Interest Period for any Eurodollar Advances or any Alternate
Currency Advances shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Advances or any Alternate Currency Advances
would otherwise be a shorter period, such Advances shall not be available
hereunder.
"Inventory Cap" means the amount equal to 60% of the Total Commitment
-------------
Amount.
"L/C Application" is defined in Section 3.1.
--------------- -----------
"L/C Documents" is defined in Section 3.1.
------------- -----------
"Letter of Credit" means any letter of credit issued by the Agent for the
----------------
liability of the Borrower pursuant to Article III.
-----------
"Letter of Credit Liabilities" means, at any time, the aggregate face
----------------------------
amounts of all outstanding Letters of Credit.
"Letter of Credit Request Form" means a certificate, in substantially the
-----------------------------
form of Exhibit C hereto, properly completed and signed by the Borrower
---------
requesting issuance of a Letter of Credit.
"Lien" means any lien, mortgage, security interest, tax lien, financing
----
statement, pledge, charge, hypothecation, assignment, preference, priority, or
other encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or title retention agreement), whether arising
by contract, operation of law, or otherwise.
-22-
"Loan Documents" means this Agreement and all promissory notes, security
--------------
agreements, pledge agreements, assignments, letters of credit, guaranties, L/C
Documents, and other instruments, documents, and agreements executed and
delivered pursuant to or in connection with this Agreement, as such instruments,
documents, and agreements may be amended, modified, renewed, extended, or
supplemented from time to time; provided, however that "Loan Documents" shall
--------------
not include the Subordinated Note Documents.
"Material Adverse Effect" means a material adverse effect on the business,
-----------------------
condition (financial or otherwise), operations, prospects, or properties of the
Borrower or the Subsidiaries and the Foreign Affiliates taken as a whole or the
ability of the Borrower or any Guarantor to pay and perform the Obligations.
"Maximum Rate" means, at any time, the maximum rate of interest under
------------
applicable law that the Agent or the Banks may charge the Borrower. The Maximum
Rate shall be calculated in a manner that takes into account any and all fees,
payments, and other charges in respect of the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to the Borrower at the time of such change in
the Maximum Rate. For purposes of determining the Maximum Rate under Texas law,
the applicable rate ceiling shall be the applicable weekly ceiling described in,
and computed in accordance with, Article 5069-1D.001 et seq., Vernon's Texas
Civil Statutes.
"Multiemployer Plan" means a multiemployer plan defined as such in Section
------------------
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"NAC" means National Auto Center, Inc., a Delaware corporation, a
---
Subsidiary of the Borrower and general partner of CellStar, Ltd. and CellStar
Global.
"National Currency Unit" means the unit of currency (other than a Euro
----------------------
Unit) of a Participating Member State.
"Net Proceeds" from any issuance, sale or other disposition of any shares
------------
of equity securities (or any securities convertible or exchangeable for any such
shares, or any rights, warrants, or options to subscribe for or purchase any
such shares) means the amount equal to (a) the aggregate gross proceeds of such
issuance, sale or other disposition, less (b) the following: (i) placement agent
fees, (ii) underwriting discounts and commissions, (iii) bank and other lender
fees, and (iv) legal fees and other expenses payable by the issuer in connection
with such issuance, sale or other disposition.
"Notes" means, collectively, the Revolving Credit Notes and the Swing Line
-----
Note.
-23-
"Obligated Party" means any Guarantor or any other Person who is or becomes
---------------
party to any agreement that guarantees or secures payment and performance of the
Obligations or any part thereof.
"Obligations" means all of the following obligations, indebtedness, and
-----------
liabilities of the Borrower or any Subsidiary to the Agent, CBT, Chase and the
other Banks, or any of them, now existing or hereafter arising, whether direct,
indirect, related, unrelated, fixed, contingent, liquidated, unliquidated,
joint, several, or joint and several, and all interest accruing thereon and all
attorneys' fees and other expenses incurred in the enforcement or collection
thereof: (a) all obligations, indebtedness and liabilities of the Borrower or
any Subsidiary under the Loan Documents (including, without limitation, all
contingent reimbursement obligations in respect of Letters of Credit) and (b)
all Hedging Obligations of the Borrower or any Subsidiary to the Agent, CBT,
Chase or any other Bank.
"Obligee" has the meaning specified in Section 14.13.
-------
"Overadvance" is defined in Section 4.3.
----------- -----------
"Participating Member State" means each state so described in any EMU
--------------------------
Legislation.
"Partnerships" means, collectively, CellStar, Ltd. and CellStar
------------
Fulfillment, Ltd., each a Texas limited partnership, and CellStar Global.
"Payor" is defined in Section 4.5.
----- -----------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to all or any of its functions under ERISA.
"Permitted Overadvance Period" has the meaning specified in Section 4.3.
---------------------------- ------- ---
"Person" means any individual, corporation, business trust, association,
------
company, partnership, joint venture, Governmental Authority, or other entity.
"Plan" means any employee benefit or other plan established or maintained
----
by the Borrower or any ERISA Affiliate and which is covered by Title IV of
ERISA.
"Pledge Agreements" means the pledge agreements heretofore executed by the
-----------------
Borrower, Fulfillment, Holdings, Audiomex, NAC, CAS, CellStar International and
CellStar Telecom in favor of the Agent, as ratified and confirmed pursuant to
the Consent, Ratification and Confirmation, and all pledge agreements hereafter
executed by any Subsidiary, each in substantially the form of Exhibit G hereto,
---------
as the same may be amended,supplemented or modified from time to time.
-24-
"Price Protected Inventory" means inventory that is the subject of terms or
-------------------------
agreements between the manufacturer thereof and a Company to the effect that
such Company will receive the benefit of any reductions of the manufacturer's
sales prices for inventory of the same type that occur after such Company has
purchased such inventory from such manufacturer.
"Prime Rate" means the Prime Rate as announced from time to time by the
----------
Agent, automatically fluctuating upward or downward with each announcement
without notice to the Borrower or any other Person. The Borrower understands
that the Prime Rate may not be the Agent's best or lowest rate or a favored
rate, and any statement, representation or warranty to that effect is expressly
disclaimed by the Agent and the Banks.
"Principal Office" means (a) with respect to the Administrative Agent, the
----------------
principal office of the Administrative Agent, presently located at 0000 Xxxxxx
Xx., 0xx Xxxxx, XX00, Xxxxxxx, Xxxxx 00000 and, for purposes of interest rate
determinations, at 000 Xxxxxx, Xxxxxxx, Xxxxx 00000, and (b) with respect to the
Alternate Currency Agent, the principal office of Chase Manhattan International
Limited, presently located at 0 Xxxxxx Xxxxx Xxxxxx, Xxxxxx, X0 0XX, Xxxxxx
Xxxxxxx.
"Prohibited Transaction" means any transaction set forth in Section 406 of
----------------------
ERISA or Section 4975 of the Code.
"Quarterly Payment Date" means the last day of each March, June, September,
----------------------
and December of each year, the first of which shall be the first such day after
the date of this Agreement.
"Quotation Day" means, in relation to any Interest Period for which an
-------------
interest rate is to be determined, (a) if the currency is Euro, two TARGET
Operating Days before the first day of that Interest Period, or (b) for any
other currency, two Business Days before the first day of that Interest Period,
unless market practice differs in the relevant interbank market for a currency,
in which case the Quotation Day for that currency will be determined by the
Agent in accordance with market practice in the relevant interbank market (and
if quotations would normally be given by leading banks in the relevant interbank
market on more than one day, the Quotation Day shall be the last of those days).
"Refunded Swing Line Advances" is defined in Section 2.2.
---------------------------- -----------
"Register" is defined in Section 14.6(d).
-------- ---------------
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to the Agent or any Bank, any
-----------------
implementation, adoption or change after the date of this Agreement of United
States federal,
-25-
state, or foreign laws, rules or regulations (including Regulation D) or the
adoption or making after such date of any interpretations, directives, or
requests applying to a class of banks including the Agent or such Bank of or
under any United States federal or state, or any foreign, laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.
"Reportable Event" means any of the events set forth in Section 4043 of
----------------
ERISA.
"Required Banks" means (a) prior to termination of the Commitments, at any
--------------
time while no Advances are outstanding, the Banks having at least 50.1% of the
aggregate amount of the Total Commitment Amount and, at any time while Advances
are outstanding, the Banks holding at least 50.1% of the outstanding aggregate
principal amount of the Advances other than Swing Line Advances, and (b) after
termination of the Commitments, the Banks holding at least 50.1% of the
outstanding aggregate principal amount of the Advances, including Swing Line
Advances.
"Required Payment" is defined in Section 4.5.
---------------- -----------
"Restricted Payment" means, as to any Person, (a) the declaration or
------------------
payment of any dividends or any other payment or distribution (in cash,
property, or obligations) by a Person on account of such Person's capital stock,
(b) the redemption, purchase, retirement, or other acquisition by a Person of
any of its capital stock, or (c) the setting apart of any money for a sinking
fund or other analogous fund for any dividend or other distribution on such
Person's capital stock or for any redemption, purchase, retirement, or other
acquisition of any of such Person's capital stock.
"Revolving Credit Note" means a promissory note of the Borrower payable to
---------------------
the order of a Bank, in substantially the form of Exhibit A-1 hereto, and all
-----------
extensions, renewals, and modifications thereof.
"Semiannual Collateral Audits" has the meaning specified in Section 9.6.
---------------------------- ------- ---
"Significant Subsidiary" means at any time (a) each Domestic Subsidiary,
----------------------
(b) CellStar Asia, (c) Celular Express, and (d) each other Foreign Subsidiary
that has assets or revenues that are greater than 10% of the total assets or
revenues, respectively, of the Borrower and the Subsidiaries on a consolidated
basis as of the end of Borrower's most recent fiscal quarter then ended.
"Specified Currency" is defined in Section 4.8.
------------------ -----------
"Statutory Reserves" means the difference (expressed as a decimal) of the
------------------
number one minus the aggregate of the maximum reserve percentages (including,
without limitation, any marginal, special, emergency, or supplemental reserves)
expressed as a decimal established by the Board of Governors of the Federal
Reserve System and any other banking authority
-26-
to which a Bank is subject for Eurocurrency Liabilities (as defined in
Regulation D). Such reserve percentages shall include, without limitation, those
imposed under Regulation D. Eurodollar Advances and Alternate Currency Advances
shall be deemed to constitute Eurocurrency Liabilities and as such shall be
deemed to be subject to such reserve requirements without benefit of or credit
for proration, exceptions or offsets which may be available from time to time to
a Bank under Regulation D. Statutory Reserves shall be adjusted automatically on
and as of the effective date of any change in any reserve percentage.
"Subordinated Debt" means all Debt of the Borrower and the Subsidiaries
-----------------
subordinated in right of payment to the Obligations pursuant to documents
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to the Required Banks.
"Subordinated Note Documents" means that certain Indenture dated as of
---------------------------
October 14, 1997, relating to $150,000,000 of convertible subordinated notes due
October 15, 2002 and all promissory notes and other documents and agreements
executed and delivered pursuant to or in connection with such Indenture.
"Subsidiary" means (a) any corporation of which at least a majority of the
----------
outstanding shares of stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
one or more of the Borrower and the Subsidiaries, and (b) any other entity (i)
of which at least a majority of the ownership, equity or voting interests is at
the time directly or indirectly owned or controlled by one or more of the
Borrower and the Subsidiaries and (ii) which is treated as a subsidiary in
accordance with GAAP. Without in any way limiting the foregoing, the
Subsidiaries shall include the Partnerships.
"Swing Line" means the swing line facility provided by the Administrative
----------
Agent under Section 2.2.
-----------
"Swing Line Advance" means, any Floating Rate Advance disbursed by the
------------------
Administrative Agent to or on behalf of the Borrower under the Swing Line.
"Swing Line Commitment" means, at any time, the Commitment of the
---------------------
Administrative Agent under the Swing Line in the amount of $5,000,000.
"Swing Line Note" means a promissory note of the Borrower payable to the
---------------
order of the Administrative Agent, in substantially the form of Exhibit A 2
-----------
hereto, and all extensions, renewals, and modifications thereof.
-27-
"TARGET Operating Day" means any day on which the Trans-European Automated
--------------------
Real-time Gross Settlement Express Transfer payment system (or any successor
settlement system) is open for the settlement of payments in Euro.
"Termination Date" means 11:00 A.M. Dallas, Texas time on June 1, 2002, or
----------------
such earlier date on which the Commitments terminate as provided in this
Agreement.
"Xxxx Telecom" means Xxxx Telecom, Inc., a Florida corporation.
------------
"Total Commitment Amount" means the aggregate amount of the Commitments of
-----------------------
the Banks, which amount is $115,000,000 as of the date of this Agreement and may
be increased to $135,000,000 subject to and in accordance with the terms,
conditions and provisions of Section 2.12. For purposes of these definitions of
------------
"Total Commitment Amount" and "Required Banks"set forth in this Section 1.1, the
----------------------- -----------
portion of the Total Commitment Amount attributable to the Commitment of Chase
and CBT shall be deemed to be held by CBT.
"Treaty on European Union" means the Treaty of Rome of March 25, 1957, as
------------------------
amended by the Single European Act of 1986 and the Maastricht Treaty (which was
signed at Maastricht on February 7, 1992 and came into force on November 1,
1993), as amended from time to time.
"Type" means any type of Advance (i.e., Floating Rate Advance, Eurodollar
----
Advance, Swing Line Advance or Alternate Currency Advance).
"UCC" means the Uniform Commercial Code as in effect in the State of Texas.
---
Section 1.2. Other Definitional Provisions. All definitions contained
-----------------------------
in this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. Terms used herein that are defined in the UCC, unless
otherwise defined herein, shall have the meanings specified in the UCC. Unless
indicated otherwise, all references to amounts expressed in Dollars shall be
deemed to refer also to the Equivalent Amounts thereof.
ARTICLE II
Advances
--------
Section 2.1. Advances. Subject to the terms and conditions of this
--------
Agreement, each Bank severally agrees to make one or more Advances to the
Borrower from time to time from the date hereof to and including the Termination
Date in an aggregate principal amount at any time
-28-
outstanding up to but not exceeding the amount of such Bank's Commitment as then
in effect, provided that:
(a) the aggregate amount of all Advances at any time outstanding
shall not exceed, and the Banks shall not be obligated to make any Advance
which would cause the aggregate amount of all outstanding Advances to
exceed, the amount equal to (i) the lesser of (A) the Total Commitment
Amount or (B) the Borrowing Base, minus (ii) the Letter of Credit
Liabilities, except as permitted by Section 4.3; and
-----------
(b) the aggregate amount of all Alternate Currency Advances at any
time outstanding shall not exceed, and the Banks shall not be obligated to
make any Alternate Currency Advances which would cause the aggregate amount
of all outstanding Alternate Currency Advances to exceed the Equivalent
Amount of $25,000,000.
Subject to the foregoing limitations, and the other terms and provisions of this
Agreement, the Borrower may borrow, repay, and reborrow hereunder. The Borrower
may borrow hereunder by means of Floating Rate Advances, Alternate Currency
Advances or Eurodollar Advances and, until the Termination Date, the Borrower
may Convert all or part of one Type of Advance into another Type of Advance or
Continue all or part of any Eurodollar Advance or Alternate Currency Advance.
Advances of each Type made by each Bank shall be made and maintained at such
Bank's Applicable Lending Office for Advances of such Type.
Section 2.2. Swing Line.
----------
(a) Subject to the terms and conditions of this Agreement, the
Administrative Agent agrees to make loans to the Borrower as Swing Line
Advances from time to time until and including the Business Day immediately
preceding the Termination Date and not thereafter, in an aggregate
principal amount at any time outstanding not to exceed its Swing Line
Commitment, provided that at any time, the sum of the aggregate amount of
all outstanding Advances plus the Letter of Credit Liabilities shall not
exceed the lesser of the Borrowing Base or the Total Commitment Amount (as
such amount is reduced or cancelled in accordance with this Agreement),
except as permitted by Section 4.3. At any time until and including the
-----------
Business Day immediately preceding the Termination Date, the Borrower may
use the Swing Line by borrowing, prepaying the aggregate amount of all
outstanding Advances under the Swing Line in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
proceeds of each Swing Line Advance shall be used by the Borrower solely
for its short-term cash needs for working capital and general business
purposes.
(b) Each Swing Line Advance shall be a Floating Rate Advance and
shall bear interest prior to maturity at a rate per annum equal to the
lesser of (a) the Applicable Rate, or (b) the Maximum Rate. The Borrower
shall not be entitled to Convert Swing Line Advances into either Eurodollar
Advances or Alternate Currency Advances.
-29-
(c) The Borrower may request Swing Line Advances by giving written
notice to the Administrative Agent. Such notice shall be irrevocable and
must be received by the Administrative Agent prior to 2:00 P.M. Dallas,
Texas time for Swing Line Advances to be made by crediting the account of
Borrower maintained with the Administrative Agent and prior to 1:00 P.M.
Dallas, Texas time for Swing Line Advances to be made by wire transfer, in
either case on the same Business Day as the requested date of the Swing
Line Advance (which shall be a Business Day). Such notice shall be given
by means of an Advance Request Form, specifying (i) the requested date of
such Swing Line Advance (which shall be a Business Day), and (ii) the
amount of the requested Swing Line Advance, which shall be in a minimum
amount of $100,000. The proceeds of such Swing Line Advance will be made
available by the Administrative Agent to the Borrower at the Principal
Office of the Administrative Agent on the requested date of such Advance by
crediting the account of the Borrower maintained with the Administrative
Agent with such proceeds or by wire transfer in accordance with written
instructions from the Borrower. Notwithstanding anything to the contrary
contained herein, the Borrower may, at any time and from time to time,
prepay the aggregate amount of outstanding Swing Line Advances, in whole or
in part, without premium or penalty, by giving the Administrative Agent at
least one Business Day advance irrevocable notice of the date and amount of
prepayment. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein.
(d) Notwithstanding anything herein to the contrary, the
Administrative Agent shall not fund any Swing Line Advances if the
conditions set forth in Article VII have not been satisfied.
-----------
(e) The Administrative Agent, at any time in its sole and absolute
discretion, may, on behalf of the Borrower (which hereby irrevocably
directs the Administrative Agent to act on its behalf) request each Bank,
by giving written notice to the Administrative Agent and each Bank, to make
a Floating Rate Advance in an amount equal to such Bank's Commitment
Percentage of the amount of the Swing Line Advances outstanding on the date
such notice is given or such lesser amount as the Administrative Agent
shall specify (the "Refunded Swing Line Advances"). Unless any of the
----------------------------
events described in Section 12.1(e) or 12.1(f) shall have occurred with
--------------- -------
respect to the Borrower (in which event the procedures specified in Section
-------
2.2(f) shall apply) each Bank shall make the proceeds of its Advance
------
available to the Administrative Agent at its Principal Office prior to
12:00 noon (Dallas, Texas time) in funds immediately available on the
Business Day next succeeding the date such notice is given. The proceeds
of such Floating Rate Advances shall be immediately applied to repay the
Refunded Swing Line Advances. Effective on the day such Floating Rate
Advances are made, the portion of the Swing Line Advances so paid shall no
longer be outstanding as Swing Line Advances, and shall be due under the
respective Revolving Credit Notes payable to the Banks in accordance with
their respective Commitment Percentages.
(f) If prior to the making of an Advance pursuant to Section 2.2(e)
--------------
one of the events described in Section 12.1(e) or 12.1(f) shall have
--------------- -------
occurred and be continuing with respect to the Borrower, each Bank will, on
the date such Advance was to have been made
-30-
pursuant to Section 2.2(e), purchase an undivided participating interest in
-------------
the Refunded Swing Line Advances in an amount equal to (i) its Commitment
Percentage times (ii) the Refunded Swing Line Advances. Each Bank will
-----
immediately transfer to the Administrative Agent, in immediately available
funds, the amount of its participation. Thereafter, all payments of
principal and interest on the Refunded Swing Line Advances shall be made to
and distributed to the Banks by the Administrative Agent.
(g) Whenever, at any time after any Bank has purchased a
participating interest in a Swing Line Advances, the Administrative Agent
receives any payment on account thereof, the Administrative Agent will
distribute to such Bank its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Bank's participating interest was
outstanding and funded); provided, however, that in the event that such
-------- -------
payment received by the Administrative Agent is thereafter recovered from
the Administrative Agent in connection with any bankruptcy or insolvency
proceeding of the Borrower or otherwise, such Bank will return to the
Administrative Agent any portion thereof previously distributed by the
Administrative Agent to it.
(h) Each Bank's obligation to make the Advances referred to in
Section 2.2(e) and to purchase participating interests pursuant to Section
-------------- -------
2.2(f) shall be absolute and unconditional and shall not be affected by any
------
circumstance, including without limitation (i) any setoff, counterclaim,
recoupment, defense or other right which such Bank or the Borrower may have
against the Administrative Agent, the Borrower or any other Person for any
reason whatsoever; (ii) the occurrence or continuance of a Default or an
Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of the Borrower; (iv) any breach of this Agreement or any other
Loan Documents by the Borrower, any Guarantor or any other Bank; or (v) any
other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing; provided, however, that (x) the Banks' obligations
-------- -------
under Section 2.2(e) shall be subject to the minimum amounts specified in
--------------
Section 2.6 so long as no Default or Event of Default is continuing, and
-----------
(y) no Bank shall be required to make an Advance or purchase a
participating interest in a Swing Line Advance that would cause the
aggregate amount of such Bank's Advances, participations in Swing Line
Advances and share of Letter of Credit Liabilities to exceed its Commitment
under this Agreement.
Section 2.3. Notes. The obligation of the Borrower to repay each Bank
-----
for Advances made by such Bank and interest thereon shall be evidenced by a
Revolving Credit Note executed by the Borrower, payable to the order of such
Bank, in the principal amount of such Bank's Commitment as in effect on the date
hereof, and dated the date hereof. The obligation of the Borrower to repay the
Administrative Agent for Swing Line Advances made by the Administrative Agent
and interest thereon shall be evidenced by a Swing Line Note executed by the
Borrower, payable to the order of the Administrative Agent, in the principal
amount of the Swing Line Commitment as in effect on the date hereof, and dated
the date hereof.
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Section 2.4. Repayment of Advances. The Borrower shall repay the
---------------------
unpaid principal amount of all Advances on the Termination Date.
Section 2.5. Interest. The unpaid principal amount of the Advances
--------
shall bear interest prior to maturity at a varying rate per annum equal from day
to day to the lesser of (a) the Maximum Rate, or (b) the Applicable Rate.
Interest on the Eurodollar Advances and Alternate Currency Advances shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed; provided that, in the case of Advances denominated in any Alternate
Currency in respect of which the Alternate Currency Agent has determined that a
365-day basis is standard market practice in the applicable interbank market,
interest shall be calculated on the basis of a year of 365 days and the actual
number of days elapsed. Interest on the Floating Rate Advances shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed at all times when the Alternate Base Rate is based on the Federal Funds
Effective Rate and a year of 365 or 366 days, as the case may be, and the actual
number of days elapsed at all times when the Alternate Base Rate is the Prime
Rate. If at any time the Applicable Rate for any Advance shall exceed the
Maximum Rate, thereby causing the interest accruing on such Advance to be
limited to the Maximum Rate, then any subsequent reduction in the Applicable
Rate for such Advance shall not reduce the rate of interest on such Advance
below the Maximum Rate until the aggregate amount of interest accrued on such
Advance equals the aggregate amount of interest which would have accrued on such
Advance if the Applicable Rate had at all times been in effect. Accrued and
unpaid interest on the Advances shall be due and payable as follows:
(i) in the case of Floating Rate Advances, on each Quarterly
Payment Date;
(ii) in the case of each Eurodollar Advance and each Alternate
Currency Advance, on the last day of the Interest Period with respect
thereto;
(iii) upon the payment or prepayment of any Advance or the
Conversion of any Advance to an Advance of another Type (but only on the
principal amount so paid, prepaid, or Converted); and
(iv) on the Termination Date.
All past due principal and interest shall bear interest at the Default Rate.
Interest payable at the Default Rate shall be payable from time to time on
demand.
Section 2.6. Borrowing Procedure. The Borrower shall give the
-------------------
Administrative Agent notice of each requested Advance (other than Swing Line
Advances and Alternate Currency Advances), and shall give the Alternate Currency
Agent and the Administrative Agent notice of each requested Alternate Currency
Advance, by means of an Advance Request Form, (a) before 11:00 A.M. Dallas,
Texas time on the same Business Day as the requested date of each Floating Rate
Advance, (b) before 11:00 A.M. Dallas, Texas time at least three Business Days
before the requested date of each Eurodollar Advance, and (c) before 11:00 A.M.
London time, at least three Business Days before the requested date of each
Alternate Currency Advance, specifying: (i) the requested date of such Advance
(which shall be a Business Day), (ii) the amount of such Advance, (iii) the Type
of
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the Advance, (iv) in the case of Alternate Currency Advances, the requested
Alternate Currency, it being agreed that Advances made on any one day shall be
made in the same currency, and (v) in the case of a Eurodollar Advance or an
Alternate Currency Advance, the duration of the Interest Period for such
Advance. The Agent at its option may accept telephonic requests for Advances,
provided that such acceptance shall not constitute a waiver of the Agent's right
to delivery of an Advance Request Form in connection with subsequent Advances.
Any telephonic request for an Advance by the Borrower shall be promptly
confirmed by submission of a properly completed Advance Request Form to the
Agent. Each Advance (other than Swing Line Advances) shall be in a minimum
principal amount of $1,000,000 or the Equivalent Amount thereof or such greater
amount which is an integral multiple of $100,000 or the Equivalent Amount
thereof. The aggregate principal amount of Eurodollar Advances having the same
Interest Period shall be at least equal to $1,000,000. The aggregate principal
amount of Alternate Currency Advances having the same Interest Period shall be
at least equal to the Equivalent Amount of $1,000,000. The Agent shall notify
each Bank of the contents of each such notice on the day such notice is received
by the Agent if received by 11:00 A.M. Dallas, Texas time (or 11:00 A.M. London
time in the case of Alternate Currency Advances) on a Business Day and otherwise
on the next succeeding Business Day. Promptly on the date specified for each
Advance hereunder, each Bank will make available to the Agent at the Principal
Office of the Administrative Agent or, as to Alternate Currency Advances, at the
Principal Office of the Alternate Currency Agent or other office designated by
the Alternate Currency Agent for such Alternate Currency, in the specified
Alternate Currency for Alternate Currency Advances and in Dollars for all other
Advances and in immediately available funds, for the account of the Borrower,
such Bank's pro rata share of each Advance; provided that in relation to the
payment of any amount of Euro Units or National Currency Units, such amounts
shall be made available to the Alternate Currency Agent in immediately
available, freely transferable, cleared funds to such account with such bank in
Frankfurt am Main, Germany (or such other principal financial center in such
Participating Member State as the Alternate Currency Agent may from time to time
nominate for this purpose) as the Alternate Currency Agent shall from time to
time nominate for this purpose. After the Agent's receipt of such funds and
subject to the terms and conditions of this Agreement, the Agent will (a) make
each Advance (other than Alternate Currency Advances) available to the Borrower
by depositing the same, in Dollars in immediately available funds, in an account
of the Borrower maintained with the Agent designated by the Borrower or by wire
transfer in accordance with written instructions from the Borrower, (b) make
each Alternate Currency Advance (other than Advances in Euro Units) available to
the Borrower by depositing the same, in the requested Alternate Currency in
immediately available funds, in an account of the Borrower maintained with a
financial institution in the country where such Alternate Currency is legal
tender, and (c) make each Advance in Euro Units available by depositing the same
in an account of the Borrower maintained with a financial institution in
Frankfurt am Main, Germany; in each case designated by the Borrower by written
notice to the Agent containing the information specified in Exhibit L hereto for
---------
such account, which notice shall be received by the Agent at least five Business
Days before the requested date of such Advance. All notices by the Borrower to
the Agent under this Section shall be irrevocable and shall be given not later
than the time specified above for such notice on the day which is not less than
the number of Business Days specified above for such notice.
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Section 2.7. Conversions and Continuations. The Borrower shall have
-----------------------------
the right from time to time to Convert all or part of one Type of Advance
(excluding Swing Line Advances) into another Type of Advance or to Continue all
or part of any Eurodollar Advance or any Alternate Currency Advance by giving
the Agent written notice (by means of an Advance Request Form) at least one
Business Day before Conversion into a Floating Rate Advance, and at least three
Business Days before Conversion into or Continuation of a Eurodollar Advance or
an Alternate Currency Advance, specifying: (i) the Conversion or Continuation
date, (ii) the amount of the Advance to be Converted or Continued, (iii) in the
case of Conversions, the Type of Advance to be Converted into, (iv) in the case
of Alternate Currency Advances, the requested Alternate Currency, and (v) in the
case of a Continuation of or Conversion into a Eurodollar Advance or an
Alternate Currency Advance, the duration of the Interest Period applicable
thereto; provided that (a) Eurodollar Advances and Alternate Currency Advances
may only be Converted on the last day of the Interest Period, (b) except for
Conversions to Floating Rate Advances, no Conversions shall be made while a
Default or Event of Default has occurred and is continuing and no Continuations
of any Eurodollar Advances or any Alternate Currency Advances shall be made
while a Default or an Event of Default has occurred and is continuing, unless
such Conversion or Continuation has been approved by Required Banks, (c) the
aggregate principal amount of Eurodollar Advances having the same Interest
Period shall be at least equal to $1,000,000 and (d) the aggregate principal
amount of Alternate Currency Advances having the same Interest Period shall be
at least equal to the Equivalent Amount of $1,000,000. All notices given under
this Section shall be irrevocable and shall be given not later than 11:00 A.M.
Dallas, Texas time (or 11:00 A.M. London time in the case of Alternate Currency
Advances) on the day which is not less than the number of Business Days
specified above for such notice. If the Borrower shall fail to give the Agent
the notice as specified above for Continuation or Conversion of a Eurodollar
Advance prior to the end of the Interest Period with respect thereto, such
Eurodollar Advance shall automatically be Converted into a Floating Rate Advance
on the last day of the Interest Period for such Eurodollar Advance. If Borrower
shall fail to give the Agent notice as specified above for the Continuation or
Conversion of an Alternate Currency Advance prior to the end of the Interest
Period with respect thereto, such Alternate Currency Advance shall be Continued
for an Interest Period of one month; provided, however, that no Alternate
Currency Advance shall be Continued as such if a Default or Event of Default has
occurred and continuing but in such event shall instead be Converted to a
Floating Rate Advance in Dollars at the end of the applicable Interest Period.
Section 2.8. Use of Proceeds. The proceeds of Advances shall be used
---------------
by the Borrower and the Subsidiaries (subject to the terms and provisions of
this Agreement) for working capital in the ordinary course of business and
general corporate purposes and to refinance existing Debt. All advances of loan
proceeds by Borrower to any Guarantor shall be evidenced by a promissory note
payable by such Guarantor to the order of the Borrower, and each such promissory
note shall be endorsed to the order of the Agent and subject to a security
interest in favor of the Agent pursuant to the Loan Documents.
Section 2.9. Commitment Fee. The Borrower agrees to pay to the Agent
--------------
for the account of each Bank (other than Chase) a commitment fee equal to the
Applicable Percentage of the daily average unused amount of such Bank's
Commitment. The commitment fee shall be in each case based
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on a 360 day year and the actual number of days elapsed. For the purpose of
calculating the commitment fee hereunder, (a) the Commitments of the Banks other
than CBT and Chase shall be deemed utilized by the amount of all outstanding
Advances of such Banks (which shall not include Swing Line Advances) and all
Letter of Credit Liabilities of such Banks, and (b) the Commitment of CBT shall
be deemed utilized by the amount of all outstanding Advances of CBT, all
outstanding Swing Line Advances of CBT, all Letter of Credit Liabilities of CBT
and all Alternate Currency Advances of Chase. Accrued commitment fees shall be
payable in arrears on each Quarterly Payment Date and on the Termination Date.
Section 2.10. Reduction or Termination of Commitments. The Borrower
---------------------------------------
shall have the right to terminate in whole or reduce in part the unused portion
of the Commitments upon at least five Business Days prior notice (which notice
shall be irrevocable) to the Agent specifying the effective date thereof,
whether a termination or reduction is being made, and the amount of any partial
reduction, provided that each partial reduction shall be in a minimum amount of
$1,000,000 or Equivalent Amount or such greater amount which is an integral
multiple of $100,000 or Equivalent Amount and the Borrower shall simultaneously
prepay the amount by which the unpaid principal amount of the Advances exceeds
the Total Commitment Amount (after giving effect to such notice) plus accrued
and unpaid interest on the principal amount so prepaid. The Commitments may not
be reinstated after they have been terminated or reduced, except for the
Commitment Increase pursuant to Section 2.12.
Section 2.11. Administrative Fee. The Borrower shall pay to the
------------------
Administrative Agent, solely for its own account, an administrative fee as
provided in the Fee Letter.
Section 2.12. Commitment Increase. The parties hereto understand that
-------------------
the Borrower may seek one or more financial institutions to take a Commitment or
Commitments in the aggregate amount of $20,000,000 (the "Commitment Increase").
-------------------
The Commitment Increase may be taken by any existing Bank hereunder by
increasing the Commitment of such existing Bank (each an "Increasing Bank") or
---------------
by a new Bank added as a party hereto (each an "Additional Bank"), subject to
---------------
the conditions hereinafter specified. For purposes of the foregoing, Agent may,
from time to time, (i) admit Additional Banks hereunder, or (ii) at the request
of any Increasing Bank, increase the Commitment of such Increasing Bank, subject
to the following conditions:
(a) each Additional Bank shall be an Eligible Assignee;
(b) Borrower shall execute (i) a new Revolving Credit Note payable to the order
of each Additional Bank, or (ii) a replacement Revolving Credit Note payable to
the order of each Increasing Bank;
(c) Borrower and Agent shall execute appropriate documentation to add each
Additional Bank as a party to this Agreement, whereupon such Additional Bank
shall have all of the rights and obligations of a Bank hereunder and under the
other Loan Documents;
-35-
(d) Each Additional Bank and each Increasing Bank shall pay to the Agent for
the account of the other Banks an amount equal to its Percentage Commitment of
outstanding Advances, and such amount so paid shall constitute an Advance by
such Additional Bank or Increasing Bank under its Note and a payment of
principal to the other Banks under their respective Notes, and the outstanding
principal balances of the respective Notes shall be increased or reduced
accordingly;
(e) After giving effect to the admission of any Additional Bank or the increase
in the Commitment of any Increasing Bank, the Total Commitment Amount shall not
exceed $135,000,000; and
(f) No admission of any Additional Bank shall increase the Commitment of any
existing Bank.
Upon and as of the date of the addition of any Additional Bank to the Agreement
or the increase of the Commitment of any Increasing Bank, (i) the Commitments of
the other Banks shall remain unchanged, and the respective Commitment
Percentages and pro rata shares of such Banks shall be adjusted accordingly, and
(ii) each of the other Banks shall be deemed to have sold and transferred to
such Additional Bank or such Increasing Bank, as the case may be, and such
Additional Bank or Increasing Bank shall be deemed irrevocably and
unconditionally to have purchased and received from each such other Banks (on a
pro rata basis, based on such other Banks' respective Commitment Percentages, as
adjusted in accordance with this Section) a portion of such other Banks'
participation shares under Section 3.3 in all Letters of Credit outstanding on
-----------
such date and related rights, in an aggregate amount equal to such Additional
Bank's or such Increasing Bank's Commitment Percentage of such outstanding
Letters of Credit. The addition of any Additional Bank or the increase of the
Commitment of an Increasing Bank and the effects thereof as described in this
Section shall occur automatically upon satisfaction of the conditions specified
above, without the necessity for further documentation to be executed by the
other Banks. None of the Agent, the Syndication Agent, the Documentation Agent,
Chase, CBT or any other Bank or any of their respective Affiliates shall have
any obligation to find or arrange for any Additional Bank, and no Bank shall
have any obligation to increase its Commitment.
Section 2.13. Amendment Fees. The Borrower agrees to pay to the
--------------
Administrative Agent for the account of each Bank an amendment fee as provided
in the Fee Letter.
ARTICLE III
Letters of Credit
-----------------
Section 3.1. Letters of Credit. Subject to the terms and conditions
-----------------
of this Agreement, the Administrative Agent agrees to issue one or more Letters
of Credit denominated and payable in Dollars for the account of the Borrower
from time to time from the date hereof to and including the Termination Date;
provided, however, that the outstanding Letter of Credit Liabilities shall not
-------- -------
at any time exceed, and the Administrative Agent shall not be obligated to issue
any Letter of Credit which would cause the outstanding Letter of Credit
Liabilities to exceed, the lesser of (a) $30,000,000 or (b) an amount equal to
(i) the lesser of the Total Commitment Amount or the Borrowing Base, minus (ii)
the outstanding Advances, except as permitted by Section 4.3. Each Letter of
-----------
Credit may be
-36-
issued for the account of or used by the Borrower or any Subsidiary of the
Borrower (including the Partnerships), but the Borrower shall have full
liability for each Letter of Credit. Each Letter of Credit shall have an
expiration date not to exceed one year, shall not have an expiration date beyond
the Termination Date, shall be payable in Dollars, shall have a minimum face
amount of $50,000, must support a transaction that is entered into in the
ordinary course of the Borrower's or its Subsidiaries' business, must be
satisfactory in form and substance to the Administrative Agent, and shall be
issued pursuant to such documents and instruments (including, without
limitation, the Administrative Agent's standard application for issuance of
standby or commercial letters of credit, as the case may be, as then in effect
[each an "L/C Application"]) as the Administrative Agent may require
----------------
(collectively, the "L/C Documents"). A copy of the form of L/C Application which
-------------
is in effect as of the date hereof for standby letters of credit is attached
hereto as Exhibit I-1, and a copy of the form of L/C Application which is in
-----------
effect as of the date hereof for commercial letters of credit is attached hereto
as Exhibit I-2. However, the form of L/C Application may be changed by the
-----------
Administrative Agent from time to time without notice to the Borrower or the
Banks.
Section 3.2. Procedure for Issuing Letters of Credit. Each Letter of
---------------------------------------
Credit shall be issued on at least four Business Days prior notice from the
Borrower to the Administrative Agent by means of a Letter of Credit Request Form
describing the transaction proposed to be supported thereby and specifying (a)
the requested date of issuance (which shall be a Business Day), (b) the face
amount of the Letter of Credit, (c) the expiration date of the Letter of Credit,
(d) the name and address of the beneficiary, and (e) the name and address of the
account party (which shall be the Borrower or a Subsidiary of the Borrower), (f)
the purpose for which such Letter of Credit will be used, and (g) the form of
the draft and any other documents required to be presented at the time of any
drawing (such notice to set forth the exact wording of such documents or to
attach copies thereof). The Administrative Agent shall notify each Bank of the
contents of each such notice on the day such notice is received by
Administrative Agent if received by 11:00 A.M. Dallas, Texas time on a Business
Day and otherwise on the next succeeding Business Day.
Section 3.3. Participation by Banks. Immediately upon the Administrative
----------------------
Agent's issuance of any Letter of Credit on or after the date hereof, the
Administrative Agent shall be deemed to have sold and transferred to each Bank
(other than Chase) and each Bank (other than Chase) shall be deemed irrevocably
and unconditionally to have purchased and received from the Administrative
Agent, without recourse or warranty, an undivided interest and participation (to
the extent of such Bank's Commitment Percentage) in such Letter of Credit and
all applicable rights of the Administrative Agent in such Letter of Credit. The
Administrative Agent shall provide to each Bank (other than Chase) a copy of
each Letter of Credit issued on or after the date hereof, promptly after
issuance.
Section 3.4. Payments Constitute Advances. Each payment by the
----------------------------
Administrative Agent pursuant to a drawing under a Letter of Credit shall
constitute and be deemed a Floating Rate Advance by each Bank (other than Chase)
to the Borrower under such Bank's Revolving Credit Note and this Agreement as of
the day and time such payment is made by the Administrative Agent and in the
amount of such Bank's pro rata share of such payment. Promptly on the date of
each payment by the Administrative Agent pursuant to a drawing under a Letter of
Credit and after receipt of notice
-37-
from the Administrative Agent as to the amount of such payment, each Bank (other
than Chase) will make available to the Administrative Agent at its Principal
Office in immediately available funds, such Bank's pro rata share of such
payment.
Section 3.5. Letter of Credit Fee. The Borrower shall pay to the
--------------------
Administrative Agent for the account of the Banks (other than Chase) a
nonrefundable letter of credit fee with respect to standby Letters of Credit,
payable on the date each such Letter of Credit is issued in an amount equal to
the Applicable Percentage per annum of the face amount of such Letter of Credit,
for the period during which such Letter of Credit will remain outstanding. The
letter of credit fee is based on a 365 or 366 day year, as the case may be, and
the actual number of days in the stated term of such Letter of Credit. The
Borrower shall pay to the Administrative Agent for the account of the Banks
(other than Chase) a nonrefundable letter of credit fee with respect to
commercial Letters of Credit, payable on the date each such Letter of Credit is
issued, for the three month period following such issuance, and on the first day
of each succeeding three month period, if such Letter of Credit is outstanding
on such day. Each such fee for commercial Letters of Credit shall be in an
amount equal to the Applicable Percentage per annum of the face amount of such
Letter of Credit, for each such entire three month period, regardless of whether
such Letter of Credit actually remains outstanding for such entire three month
period, and shall be calculated based on a 365 or 366 day year, as the case may
be. The Borrower shall pay to the Administrative Agent, solely for its own
account, a nonrefundable issuance and fronting fee for each Letter of Credit in
an amount equal to one eighth of one percent per annum of the face amount of
such Letter of Credit, calculated on the basis of a year of 365 or 366 days, as
the case may be, and payable on the date each such Letter of Credit is issued.
Section 3.6. Administrative Agent's Responsibilities. Administrative
---------------------------------------
Agent agrees with each Bank that it will exercise and give the same care and
attention to each Letter of Credit as it gives to its other letters of credit.
Each Bank and the Borrower agree that, in paying any draft or draw under any
Letter of Credit, the Administrative Agent has no responsibility to obtain any
document (other than any documents expressly required by the respective Letter
of Credit) or to ascertain or inquire as to any document's validity,
enforceability, sufficiency, accuracy or genuineness or the authority of any
Person delivering it. Neither the Administrative Agent nor any of its
representatives, directors, officers, employees, attorneys or agents shall be
liable to any Bank, the Borrower or any Subsidiary for any Letter of Credit's
use or for any beneficiary's acts or omissions. The Administrative Agent shall
have no liability to the Borrower, any Subsidiary or any Bank for any action,
inaction, error, delay or omission taken or suffered by the Administrative Agent
or any of its representatives, directors, officers, employees, attorneys or
agents in connection with any Letter of Credit, applicable draws, drafts or
documents, or the transmission, dispatch or delivery of any related message or
advice, if done, taken or made in accordance with the L/C Documents.
Section 3.7. Letter of Credit Documents. Certain additional
--------------------------
provisions regarding the obligations, liabilities, rights, remedies and
agreements of the Borrower and the Administrative Agent relative to the Letters
of Credit shall be set forth in the L/C Documents. The terms of this Agreement
shall control any express conflict between the terms of this Agreement and the
terms of any L/C Application.
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ARTICLE IV
Payments; EMU Provisions
------------------------
Section 4.1. Method of Payment. All payments of principal, interest,
-----------------
and other amounts to be made by the Borrower under this Agreement and the other
Loan Documents (other than payments of principal and interest with respect to
Alternate Currency Advances) shall be made to the Administrative Agent at its
Principal Office in Dollars and immediately available funds, without setoff,
deduction, or counterclaim, not later than 11:00 A.M., Dallas, Texas time on the
date on which such payment shall become due (each such payment made after such
time on such due date to be deemed to have been made on the next succeeding
Business Day). All payments of principal and interest to be made by the
Borrower under this Agreement and the other Loan Documents with respect to
Alternate Currency Advances shall be made to the Alternate Currency Agent, in
such Alternate Currency and immediately available funds, without setoff,
deduction, or counterclaim, to such account at such bank, in the country where
such Alternate Currency is legal tender, as the Alternate Currency Agent may
designate to the Borrower, or as otherwise provided in Section 4.9. Such
-----------
payments of principal and interest with respect to Alternate Currency Advances
shall be made no later than 11:00 A.M. local time in the place where such bank
is located on the date on which such payment shall become due (each such payment
made after such time on such due date to be deemed to have been made on the next
succeeding Business Day). The Borrower shall, at the time of making each
payment under this Agreement and the other Loan Documents, specify to the Agent
the sums payable by the Borrower under this Agreement and the other Loan
Documents to which such payment is to be applied (and in the event the Borrower
fails to so specify, or if an Event of Default has occurred and is continuing,
the Agent may apply such payment to the Obligations in such order and manner as
it may elect in its sole discretion, subject to Section 4.4 hereof). Each
-----------
payment received by the Agent under this Agreement or any other Loan Document
for the account of a Bank shall be paid promptly to such Bank, in immediately
available funds, for the account of such Bank's Applicable Lending Office.
Whenever any payment under this Agreement or any other Loan Document shall be
stated to be due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of the payment of interest and commitment
fee, as the case may be. Each payment received by Agent hereunder or under any
Revolving Credit Note shall be paid promptly to the Banks in accordance with
Section 4.4, in immediately available funds, for the account of each Bank's
-----------
Applicable Lending Office for the Advance in respect of which such payment is
made.
Section 4.2. Voluntary Prepayment. The Borrower may prepay the
--------------------
Advances in whole at any time or from time to time in part without premium or
penalty but with accrued interest to the date of prepayment on the amount so
prepaid, provided that (a) the Borrower shall give the Agent at least five
Business Days' prior notice of any prepayment of Advances other than Floating
Rate Advances, (b) each partial prepayment of any Advances (excluding Swing Line
Advances) shall be in the principal amount of $1,000,000 or the Equivalent
Amount or such greater amount which is an integral multiple of $1,000,000 or the
Equivalent Amount, and (c) any and all amounts required pursuant to Section 5.5
-----------
hereof shall be paid concurrently with such prepayment. All notices under this
Section
-39-
shall be irrevocable and shall be given not later than 11:00 A.M. Dallas, Texas
time on the day which is not less than the number of Business Days specified
above for such notice.
Section 4.3. Mandatory Prepayment. If at any time the amount equal to
--------------------
the sum of (i) the outstanding principal amount of the Advances (including
without limitation the Equivalent Amount of any Alternate Currency Advances),
plus (ii) the Letter of Credit Liabilities exceeds the lesser of the Borrowing
Base or the Total Commitment Amount (the amount of such excess being referred to
herein as the "Overadvance"), the Borrower shall promptly prepay the outstanding
-----------
Advances by the amount of the Overadvance plus accrued and unpaid interest on
the amount so prepaid or, if no Advances are outstanding, the Borrower shall
immediately pledge to the Agent cash or cash equivalent investments in an amount
equal to the Overadvance as security for the Obligations; provided, however,
that in the event an Overadvance exists at the end of the Alternate Advance Rate
Availability Period solely due to the decrease in the Borrowing Base advance
------
rate for Eligible Accounts to 80% or the decrease in the Borrowing Base advance
rate for Eligible Inventory to 50%, so long as no Default exists and is
continuing, (a) Borrower shall not be obligated to prepay the outstanding
Advances by the amount of such Overadvance or pledge cash or cash equivalents in
an amount equal to such Overadvance as security for the Obligations, (b) the
existence of such Overadvance shall not constitute a Default or Event of
Default, and (c) no Advances shall be made while such Overadvance exists. The
period during which any such permitted Overadvance exists is referred to herein
as the "Permitted Overadvance Period."
----------------------------
Section 4.4. Pro Rata Treatment. Except to the extent otherwise
------------------
provided herein: (a) each Advance shall be made by the Banks under Section 2.1
-----------
or 2.2 or deemed made by the Banks under Section 3.4, each payment of the
--- -----------
commitment fee under Section 2.9 and each letter of credit fee under Section 3.5
----------- -----------
shall be made for the account of the Banks, each termination or reduction of the
Commitments under Section 2.10 shall be applied to the Commitments of the Banks,
------------
and each Letter of Credit shall be deemed participated in by the Banks, pro rata
according to the amounts of their respective Commitments; (b) the making,
Conversion, and Continuation of Advances of a particular Type (other than
Conversions provided for by Section 5.4) shall be made pro rata among the Banks
-----------
holding Advances of such Type according to the amounts of their respective
Commitments; (c) each payment and prepayment of principal of or interest on
Advances by the Borrower of a particular Type shall be made to the Agent for the
account of the Banks holding Advances of such Type pro rata in accordance with
the respective unpaid principal amounts of such Advances held by such Banks; and
(d) Interest Periods for Advances of a particular Type shall be allocated among
the Banks holding Advances of such Type pro rata according to the respective
principal amounts held by such Banks. For purposes of this Section 4.4, (i)
-----------
Chase's pro rata share of Alternate Currency Advances shall be determined as if
Chase held the entire Commitment of Chase and CBT; (ii) Chase shall not be
entitled to receive any commitment fees or letter of credit fees; (iii) each
reduction of the Commitments shall reduce CBT's Commitment on a pro rata basis
with the other Banks, with a corresponding reduction of Chase's commitment to
make Alternate Currency Advances, and (iv) Chase shall not participate in
Letters of Credit.
Section 4.5. Non-Receipt of Funds by the Agent. Unless the Agent
---------------------------------
shall have been notified by a Bank or the Borrower (the "Payor") prior to the
-----
date on which such Bank is to make payment
-40-
to the Agent of the proceeds of an Advance to be made by it hereunder or the
Borrower is to make a payment to the Agent for the account of one or more of the
Banks, as the case may be (such payment being herein called the "Required
--------
Payment"), which notice shall be effective upon receipt, that the Payor does not
-------
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment shall, on demand, pay to the
Agent the amount made available to it together with interest thereon in respect
of the period commencing on the date such amount was so made available by the
Agent until the date the Agent recovers such amount at a rate per annum equal to
the Federal Funds Effective Rate for such period.
Section 4.6. Withholding Taxes. All payments by the Borrower of
-----------------
principal of and interest on the Advances and of all fees and other amounts
payable under any Loan Document are payable without deduction for or on account
of any present or future taxes, duties or other charges levied or imposed by the
United States of America or by the government of any jurisdiction outside the
United States of America or by any political subdivision or taxing authority of
or in any of the foregoing through withholding or deduction with respect to any
such payments, or otherwise with respect to any Alternate Currency Advances. If
any such taxes, duties or other charges are so levied or imposed, the Borrower
will pay additional interest or will make additional payments in such amounts so
that every net payment of principal of and interest on the Advances and of all
other amounts payable by it under any Loan Document, after withholding or
deduction for or on account of any such present or future taxes, duties or other
charges, will not be less than the amount provided for herein or therein,
provided that the Borrower shall have no obligation to pay such additional
amounts to any Bank to the extent that such taxes, duties, or other charges are
levied or imposed by reason of the failure of such Bank to comply with the
provisions of Section 4.7. The Borrower shall furnish promptly to the Agent for
-----------
distribution to each affected Bank, as the case may be, official receipts
evidencing any such withholding or reduction and shall confirm that all
applicable taxes, if any, imposed on this Agreement or transactions hereunder
shall have been properly and legally paid by it to the appropriate taxing
authorities by sending official tax receipts or notarized copies of such
receipts to the Agent within 30 days after payment of any applicable tax. The
Borrower agrees to cause all present and future taxes, duties or other charges
levied or imposed by the government of any jurisdiction outside the United
States of America or by any political substitution or taxing authority thereof
(including those to be paid on behalf of any Bank, if any) directly to the
appropriate Governmental Authority. Upon written demand by the Agent, the
Borrower shall indemnify the Agent and the Banks and hold them harmless for the
full amount of such taxes, duties or other charges payable with respect to any
Alternate Currency Advance and any liabilities (including penalties, interest
and expenses) arising from such taxes.
Section 4.7. Withholding Tax Exemption. Each Bank that is not
-------------------------
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to the Borrower and the Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, certifying
in either case that such Bank is entitled to receive payments from the Borrower
under any Loan Document without deduction or withholding of any United States
federal income taxes. Each
-41-
Bank which so delivers a Form 1001 or 4224 further undertakes to deliver to the
Borrower and the Agent two additional copies of such form (or a successor form)
on or before the date such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form so delivered
by it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrower or the Agent, in each case certifying that
such Bank is entitled to receive payments from the Borrower under any Loan
Document without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank advises the Borrower and the Agent that it is not capable of
receiving such payments without any deduction or withholding of United States
federal income tax.
Section 4.8. Judgment Currency. If, for the purposes of obtaining
-----------------
judgment in any court, it is necessary to convert a sum due from the Borrower
hereunder or under any of the Notes in the currency expressed to be payable
herein or under the Notes (the "Specified Currency") into another currency, the
------------------
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Alternate Currency Agent could purchase the Specified
Currency with such other currency at the Principal Office of the Alternate
Currency Agent on the Business Day preceding that on which the final, non-
appealable judgment is given. The obligations of the Borrower in respect of any
sum due to any Bank or the Agent hereunder or under any Note shall,
notwithstanding any judgment in a currency other than the Specified Currency, be
discharged only to the extent that on the Business Day following receipt by such
Bank or the Agent (as the case may be) of any sum adjudged to be so due in such
other currency such Bank or the Agent (as the case may be) may in accordance
with normal, reasonable banking procedures purchase the Specified Currency with
such other currency. If the amount of the Specified Currency so purchased is
less than the sum originally due to such Bank or the Agent, as the case may be,
in the Specified Currency, the Borrower agrees, to the fullest extent that it
may effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Agent, as the case may be, against such
loss, and if the amount of the Specified Currency so purchased exceeds (a) the
sum originally due to any Bank or the Agent, as the case may be, in the
Specified Currency and (b) any amounts shared with the other Banks as a result
of allocations of such excess as a disproportionate payment to such Bank under
Section 13.3, such Bank or the Agent, as the case may be, agrees to remit such
------------
excess to the Borrower. Without prejudice to the survival of any of the other
agreements of the Borrower hereunder, the agreements and obligations of the
Borrower under this Section 4.8 shall survive the termination of this Agreement
-----------
and the payment of all other amounts owing hereunder.
Section 4.9. EMU Provisions.
--------------
(a) Effectiveness of Provisions. If and to the extent that any of the
---------------------------
provisions of subsections (b) to (h) below (inclusive) relates to any state (or
--------------- -
the currency of such state) that is not a Participating Member State on the
Commencement of the Third Stage of EMU, such provision shall become
-42-
effective in relation to such state (and the currency of such state) at and from
the date on which such state becomes a Participating Member State.
(b) Redenomination and Alternative Currencies. Each obligation under
-----------------------------------------
this Agreement of a party to this Agreement which has been denominated in the
National Currency Unit of a Participating Member State shall be redenominated
into the Euro Unit in accordance with EMU Legislation, provided, that if and to
the extent that any EMU Legislation provides that following the Commencement of
the Third Stage of EMU an amount denominated either in the Euro Unit or in the
National Currency Unit of a Participating Member State and payable within that
Participating Member State by crediting an account of the creditor can be paid
by the debtor either in the Euro Unit or in that National Currency Unit, each
party to this Agreement shall be entitled to pay or repay any such amount either
in the Euro Unit or in such National Currency Unit.
(c) Advances. Any Advance in the currency of a Participating Member State shall
--------
be made in the Euro Unit.
(d) Payments to the Alternate Currency Agent. Sections 2.6, 4.1 and
---------------------------------------- ------------ ---
13.3 shall be construed so that, in relation to the payment of any amount of
----
Euro Units or National Currency Units, such amount shall be made available to
the Alternate Currency Agent in immediately available, freely transferable,
cleared funds to such account with such bank in Frankfurt am Main, Germany (or
such other principal financial center in such Participating Member State as the
Alternate Currency Agent may from time to time nominate for this purpose) as the
Alternate Currency Agent shall from time to time nominate for this purpose.
(e) Payments by the Alternate Currency Agent to the Banks. Any amount
-----------------------------------------------------
payable by the Alternate Currency Agent to the Banks under this Agreement in the
currency of a Participating Member State shall be paid in Euro Units.
(f) Payments by the Alternate Currency Agent. Generally, with respect
----------------------------------------
to the payment of any amount denominated in the Euro or in a National Currency
Unit, the Alternate Currency Agent shall not be liable to the Borrower or any of
the Banks in any way whatsoever for any delay, or the consequences of any delay,
in the crediting to any account of any amount required by this Agreement to be
paid by the Alternate Currency Agent if the Alternate Currency Agent shall have
taken all relevant steps to achieve, on the date required by this Agreement, the
payment of such amount in immediately available, freely transferable, cleared
funds (in the Euro Unit or, as the case may be, in a National Currency Unit) to
the account with the bank in the principal financial center in the Participating
Member State which the Borrower or, as the case may be, any Bank shall have
specified for such purpose. In this subsection (f), "all relevant steps" means
all such steps as may be prescribed from time to time by the regulations or
operating procedures of such clearing or settlement system as the Alternate
Currency Agent may from time to time determine for the purpose of clearing or
settling payments of the Euro.
(g) Basis of Accrual. If the basis of accrual of interest or fees expressed in
----------------
this Agreement with respect to the currency of any state that is or becomes a
Participating Member State shall be
-43-
inconsistent with any convention or practice in the London Interbank Market or
any other applicable interbank market for the basis of accrual of interest or
fees in respect of the Euro, such convention or practice shall replace such
expressed basis effective as of and from the date on which such state becomes a
Participating Member State; provided, that if any Advance in the currency of
--------
such state is outstanding immediately prior to such date, such replacement shall
take effect, with respect to such Advance, at the end of the then current
Interest Period.
(h) Rounding and Other Consequential Changes. Without prejudice and in addition
----------------------------------------
to any method of conversion or rounding prescribed by any EMU Legislation and
without prejudice to the respective liabilities for indebtedness of the Borrower
to the Banks and the Banks to the Borrower under or pursuant to this Agreement:
(i) each reference in this Agreement to a minimum amount (or an integral
multiple thereof) in a National Currency Unit to be paid to or by the Alternate
Currency Agent shall be replaced by a reference to such reasonably comparable
and convenient amount (or an integral multiple thereof) in the Euro Unit as the
Alternate Currency Agent may from time to time specify; and
(ii) except as expressly provided in this Section 4.9, each provision of this
-----------
Agreement shall be subject to such reasonable changes of construction as the
Alternate Currency Agent may from time to time specify to be necessary or
appropriate to reflect the introduction of or changeover to the Euro in
Participating Member States.
(i) Increased Costs. The Borrower shall from time to time, at the request of
---------------
the Alternate Currency Agent, pay to the Alternate Currency Agent for the
account of each Bank the amount of any cost or increased cost incurred by, or of
any reduction in any amount payable to or in the effective return on its capital
to, or of interest or other return foregone by, such Bank or any holding company
of such Bank as a result of the introduction of, changeover to or operation of
the Euro in any Participating Member State.
Section 4.10. Continuity of Contract. Except as otherwise provided
----------------------
herein, no implementation of the EMU or change in currency nor any economic
consequences resulting therefrom shall (i) give rise to any right to terminate
prematurely, contest, cancel, rescind, alter, modify or renegotiate the
provisions of this Agreement or (ii) discharge, excuse or otherwise affect the
performance of any obligations of the Borrower under this Agreement or other
Loan Documents.
ARTICLE V
Yield Protection; Limitations on Advances; Capital Adequacy
-----------------------------------------------------------
Section 5.1. Additional Costs.
----------------
(a) The Borrower shall pay directly to each Bank from time to time
such amounts as such Bank may determine to be necessary to compensate it
for any costs incurred by such Bank which such Bank determines are
attributable to its making or maintaining of any
-44-
Eurodollar Advances or any Alternate Currency Advances hereunder or its
obligation to make such Advances hereunder, or any reduction in any amount
receivable by such Bank hereunder in respect of any such Advances or such
obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any Regulatory
----------------
Change which:
(i) changes the basis of taxation of any amounts payable to
such Bank under this Agreement or its Note in respect of any
Eurodollar Advances or any Alternate Currency Advances (other than
taxes imposed on the overall net income of such Bank or its Applicable
Lending Office for any Eurodollar Advances or any Alternate Currency
Advances by the jurisdiction in which such Bank has its principal
office or such Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio, or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Bank (including (A) any Eurodollar
Advances or any deposits referred to in the definition of "Eurodollar
Rate" in Section 1.1 hereof or (B) any Alternate Currency Advances or
-----------
any deposits referred to in the definition of "Alternate Currency
Rate" in Section 1.1 hereof); or
-----------
(iii) imposes any other condition affecting this Agreement or its
Note or any of such extensions of credit or liabilities or
commitments.
Each Bank will notify the Borrower (with a copy to the Agent) of any event
occurring after the date of this Agreement which will entitle such Bank to
compensation pursuant to this Section 5.1(a) as promptly as practicable
--------------
after it obtains knowledge thereof and determines to request such
compensation, and will designate a different Applicable Lending Office for
Eurodollar Advances or Alternate Currency Advances if such designation will
avoid the need for, or reduce the amount of, such compensation and will
not, in the sole opinion of such Bank, violate any law, rule, or regulation
or be in any way disadvantageous to such Bank, provided that such Bank
shall have no obligation to so designate an Applicable Lending Office
located outside the United States of America. Each Bank will furnish to
the Borrower, within 180 days after the occurrence of the event resulting
in Additional Costs, a certificate setting forth the basis and the amount
of each request of such Bank for compensation under this Section 5.1(a).
--------------
If any Bank requests compensation from the Borrower under this Section
-------
5.1(a), the Borrower may, by notice to such Bank (with a copy to Agent),
------
suspend the obligation of such Bank to make or Continue making, or Convert
Advances into, Eurodollar Advances or Alternate Currency Advances until the
Regulatory Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.4 hereof shall be applicable) and
-----------
may Convert any Eurodollar Advance into a Floating Rate Advance or Convert
any Alternate Currency Advance into a Floating Rate Advance which is funded
in Dollars, subject to the provisions of Section 5.5.
-----------
-45-
(b) Without limiting the effect of the foregoing provisions of
this Section 5.1, in the event that, by reason of any Regulatory Change,
-----------
any Bank either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or
other liabilities of such Bank which includes deposits by reference to
which the interest rate on Eurodollar Advances or Alternate Currency
Advances is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes Eurodollar
Advances or Alternate Currency Advances or (ii) becomes subject to
restrictions on the amount of such a category of liabilities or assets
which it may hold, then, if such Bank so elects by notice to the Borrower
the obligation of such Bank to make or Continue making, or Convert Advances
into, Eurodollar Advances or Alternate Currency Advances hereunder shall be
suspended until such Regulatory Change ceases to be in effect (in which
case the provisions of Section 5.4 hereof shall be applicable).
-----------
(c) Determinations and allocations by any Bank for purposes of
this Section 5.1 of the effect of any Regulatory Change on its costs of
-----------
maintaining its obligations to make Advances or of making or maintaining
Advances or on amounts receivable by it in respect of Advances, and of the
additional amounts required to compensate such Bank in respect of any
Additional Costs, shall be conclusive, provided that such determinations
and allocations are made on a reasonable basis.
Section 5.2. Limitation on Types of Advances. Anything herein to the
-------------------------------
contrary notwithstanding, if with respect to any Eurodollar Advances or any
Alternate Currency Advances for any Interest Period therefor:
(a) The Agent determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits
referred to in the definitions of "Eurodollar Rate" and "Alternate Currency
Rate" in Section 1.1 hereof are not being provided in the relative amounts
-----------
or for the relative maturities for purposes of determining the rate of
interest for such Advances as provided in this Agreement; or
(b) Required Banks determine (which determination shall be
conclusive) that the relevant rates of interest referred to in the
definitions of "Eurodollar Rate" and "Alternate Currency Rate" in Section
-------
1.1 hereof on the basis of which the rate of interest for such Advances for
---
such Interest Period is to be determined do not accurately reflect the cost
to the Banks of making or maintaining such Advances for such Interest
Period; or
(c) There occurs on or before the date an Alternate Currency
Advance is to be made any material adverse change in national or
international financial, political or economic conditions or currency
exchange rates or exchange controls which would in the opinion of Agent
make it impracticable for the Alternate Currency Advance to be denominated
in the Alternate Currency specified by the Borrower;
then the Agent shall give the Borrower prompt notice thereof specifying relevant
amounts or periods, and so long as such condition remains in effect, the Banks
shall be under no obligation to make
-46-
additional Eurodollar Advances or Alternate Currency Advances or to Convert
Floating Rate Advances into Eurodollar Advances or Alternate Currency Advances,
and the Borrower shall, (i) on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Advances, either prepay such Eurodollar
Advances or Convert such Eurodollar Advances into Floating Rate Advances in
accordance with the terms of this Agreement, and (ii) either prepay such
Alternate Currency Advances or Convert such Alternate Currency Advances into
Floating Rate Advances funded in Dollars in accordance with the terms of this
Agreement.
Section 5.3. Illegality. Notwithstanding any other provision of this
----------
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to (a) honor its obligation to make Eurodollar Advances or
Alternate Currency Advances hereunder or (b) maintain Eurodollar Advances or
Alternate Currency Advances hereunder, then such Bank shall promptly notify the
Borrower (with a copy to the Agent) thereof and such Bank's obligation to make
or maintain Eurodollar Advances or Alternate Currency Advances and to Convert
Floating Rate Advances into Eurodollar Advances or Alternate Currency Advances
hereunder shall be suspended until such time as such Bank may again make and
maintain Eurodollar Advances or Alternate Currency Advances (in which case the
provisions of Section 5.4 hereof shall be applicable).
-----------
Section 5.4. Substitute Floating Rate Advances. If the obligation of
---------------------------------
any Bank to make Eurodollar Advances or Alternate Currency Advances shall be
suspended pursuant to Section 5.1 or 5.3 hereof, all Advances which would be
----------- ---
otherwise made by such Bank as Eurodollar Advances or Alternate Currency
Advances shall be made instead as Floating Rate Advances in Dollars and all
Advances which would otherwise be Converted into Eurodollar Advances or any
Alternate Currency Advances shall be Converted instead into (or shall remain as)
Floating Rate Advances in Dollars (and, if an event referred to in Section
-------
5.1(b) or 5.3 hereof has occurred and such Bank so requests by notice to the
------ ---
Borrower (with a copy to the Agent), all Eurodollar Advances and all Alternate
Currency Advances of such Bank then outstanding shall be automatically Converted
into Floating Rate Advances in Dollars on the date specified by such Bank in
such notice) and, to the extent that Eurodollar Advances and Alternate Currency
Advances are so made as (or Converted into) Floating Rate Advances, all payments
and prepayments of principal which would otherwise be applied to such Bank's
Eurodollar Advances or Alternate Currency Advances shall be applied instead to
its Floating Rate Advances.
Section 5.5. Compensation. The Borrower shall pay to the Agent for the
------------
account of each Bank, upon the request of such Bank through the Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost, or expense incurred by it as a result
of:
(a) Any payment, prepayment or Conversion of a Eurodollar Advance
or an Alternate Currency Advance for any reason (including, without
limitation, the acceleration of outstanding Advances pursuant to Section
-------
12.2) on a date other than the last day of an Interest Period for such
----
Advance; or
-47-
(b) Any failure by the Borrower for any reason (including,
without limitation, the failure of any conditions precedent specified in
Article VII to be satisfied) to borrow, Convert, or prepay a Eurodollar
-----------
Advance or an Alternate Currency Advance on the date for such borrowing,
Conversion, or prepayment, specified in the relevant notice of borrowing,
prepayment, or Conversion under this Agreement; or
(c) Any failure to pay any Alternate Currency Advance in the
Alternate Currency in which it was made.
Without limiting the effect of the preceding sentence, such compensation shall
include, without limitation, (i) an amount equal to the excess, if any, of (1)
the amount of interest which otherwise would have accrued on the principal
amount so paid or Converted or not borrowed for the period from the date of such
payment, Conversion, or failure to borrow to the last day of the Interest Period
for such Advance (or, in the case of a failure to borrow, the Interest Period
for such Advance which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Advance provided for
herein over (2) the interest component of the amount such Bank would have bid in
the London interbank market for Dollar deposits (or deposits in the applicable
Alternate Currency) of leading banks and amounts comparable to such principal
amount and with maturities comparable to such period, (ii) any loss or
reasonable expense sustained or incurred in liquidating or employing deposits
from third Persons acquired to effect or maintain such Alternate Currency
Advance or Eurodollar Advance or any part thereof, (iii) any loss incurred in
liquidating or closing out any foreign currency contract undertaken by such Bank
in funding and maintaining such Alternate Currency Advance, and (iv) any loss
arising from any change in the value of Dollars in relation to any such
Alternate Currency Advance which was not paid on the date due between the date
such payment was due and the date of payment, or which was not paid in the
Alternate Currency in which it was made, all as determined by such Bank in its
good faith discretion.
Section 5.6. Capital Adequacy. If after the date hereof, the Agent or
----------------
any Bank shall have determined that any Regulatory Change or compliance by the
Agent or such Bank (or its parent) with any guideline, request, or directive
regarding capital adequacy (whether or not having the force of law) of any such
central bank or other Governmental Authority, has or would have the effect of
reducing the rate of return on the Agent's or such Bank's (or their respective
parent's) capital as a consequence of its obligations hereunder or the
transactions contemplated hereby to a level below that which the Agent or such
Bank (or their respective parent) could have achieved but for such Regulatory
Change or compliance (taking into consideration the Agent's or such Bank's
policies with respect to capital adequacy) by an amount deemed by the Agent or
such Bank to be material, then from time to time, within 10 Business Days after
demand by the Agent or such Bank (with a copy to the Agent), the Borrower shall
pay to the Agent or such Bank (or their respective parent) such additional
amount or amounts as will compensate the Agent or such Bank for such reduction.
The Agent or such Bank will furnish to the Borrower, within 180 days after such
Bank actually incurs such reduction in its rate of return, a certificate of the
Agent or such Bank claiming compensation under this Section and setting forth
the basis and the additional amount or amounts to be paid to it hereunder. Each
such certificate shall be conclusive, provided that the determination of such
amount
-48-
or amounts is made on a reasonable basis. In determining such amount or amounts,
the Agent or such Bank may use any reasonable averaging and attribution methods.
Section 5.7. Additional Costs in Respect of Letters of Credit. If as a
------------------------------------------------
result of any Regulatory Change there shall be imposed, modified, or deemed
applicable any tax, reserve, special deposit, or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder or the Commitments to issue or participate in Letters of Credit
hereunder, and the result shall be to increase the cost to the Agent or any Bank
of issuing, maintaining or participating in any Letter of Credit or its
Commitment to issue or participate in Letters of Credit hereunder or reduce any
amount receivable by the Agent or any Bank hereunder in respect of any Letter of
Credit (which increase in cost, or reduction in amount receivable, shall be the
result of the Agent's or such Bank's reasonable allocation of the aggregate of
such increases or reductions resulting from such event), then, upon demand by
the Agent or such Bank, the Borrower agrees to pay the Agent or such Bank, as
the case may be, from time to time as specified by the Agent or such Bank, as
the case may be, such additional amounts as shall be sufficient to compensate
the Agent or such Bank for such increased costs or reductions in amount. Each
Bank will furnish to the Borrower, within 180 days after such Bank actually
incurs such increase in cost or reduction in amount receivable, a certificate of
such Bank claiming compensation under this Section and setting forth the basis
and the additional amount or amounts to be paid to it hereunder. Each such
certificate shall be conclusive, provided that the determination of such amount
or amounts is made on a reasonable basis.
ARTICLE VI
Security
--------
Section 6.1. Collateral. To secure full and complete payment and
----------
performance of the Obligations, the Borrower shall execute and deliver or cause
to be executed and delivered the documents described below covering the property
and collateral described in this Section 6.1 (which, together with any other
-----------
property and collateral which may now or hereafter secure the Obligations or any
part thereof, is sometimes herein called the "Collateral"):
----------
(a) The Borrower shall grant to the Agent or confirm that the
Agent has, for the pro rata benefit of the Banks, a first priority security
interest in all of the Borrower's personal property, including without
limitation all of its accounts, accounts receivable, equipment, furniture,
fixtures, inventory, chattel paper, documents, instruments and general
intangibles, whether now owned or hereafter acquired, and all products and
proceeds thereof, pursuant to the Borrower Security Agreement and the
Consent, Ratification and Confirmation, provided that the Agent's security
interest in the Collateral shall be junior in priority to any prior Liens
thereon existing on the date hereof and permitted under this Agreement.
(b) The Guarantors shall grant to the Agent or confirm that the
Agent has, for the pro rata benefit of the Banks, a first priority security
interest in all personal property of the Guarantors, including without
limitation all accounts, accounts receivable, equipment (except
-49-
that one certain aircraft owned by A & S), furniture, fixtures, inventory,
chattel paper, documents, instruments and general intangibles of each
Guarantor, whether now owned or hereafter acquired, and all products and
proceeds thereof, pursuant to the Guarantor Security Agreements and the
Consent, Ratification and Confirmation, provided that the Agent's security
interest in the Collateral shall be junior in priority to any prior Liens
thereon existing on the date hereof and permitted under this Agreement.
(c) The Borrower shall grant to the Agent or confirm that the
Agent has, for the pro rata benefit of the Banks, a first priority security
interest in all of the Borrower's shares of capital stock of NAC, Financo,
CAS and CellStar Telecom pursuant to the Pledge Agreements and the Consent,
Ratification and Confirmation.
(d) NAC shall grant to Agent or confirm that the Agent has, for
the pro rata benefit of the Banks, a first priority security interest in
(a) all of NAC's shares of capital stock of Holdings, Fulfillment, and CWI,
(b) 65% of the shares of voting stock and all of the shares of non-voting
preferred stock of CellStar SA, Audiomex and CellStar International, and
(c) all of NAC's rights, titles and interests as a general partner of
CellStar, Ltd. and CellStar Global pursuant to the Pledge Agreements and
the Consent, Ratification and Confirmation.
(e) CAS shall grant to the Agent or confirm that the Agent has,
for the pro rata benefit of the Banks, a first priority security interest
in all of the shares of capital stock of A & S, pursuant to a Pledge
Agreement and the Consent, Ratification and Confirmation.
(f) CellStar SA shall grant to the Agent or confirm that the
Agent has, for the pro rata benefit of the Banks, a first priority security
interest in all of CellStar SA's shares of capital stock of ACC, pursuant
to a Pledge Agreement and the Consent, Ratification and Confirmation.
(g) CellStar International shall grant to the Agent or confirm
that the Agent has, for the pro rata benefit of the Banks, a first priority
security interest in 65% of the shares of capital stock of CellStar Asia,
pursuant to a Pledge Agreement and the Consent, Ratification and
Confirmation.
(h) Audiomex shall grant to the Agent or confirm that the Agent
has, for the pro rata benefit of the Banks, a first priority security
interest in 65% of the shares of capital stock of Celular Express, pursuant
to a Pledge Agreement and the Consent, Ratification and Confirmation.
(i) Fulfillment shall grant to the Agent or confirm that the
Agent has, for the pro rata benefit of the Banks, a security interest in
all of its rights, titles and interest as a general partner of CellStar
Fulfillment, Ltd., pursuant to a Pledge Agreement and the Consent,
Ratification and Confirmation.
-50-
(j) Holdings shall grant to the Agent or confirm that the Agent
has, for the pro rata benefit of the Banks, a security interest in (a) all
of its rights, titles and interest as a limited partner of the Partnerships
and CellStar Global and (b) all of Holdings' shares of capital stock of
Florida Properties pursuant to the Pledge Agreements and the Consent,
Ratification and Confirmation.
(k) CellStar Telecom shall grant to Agent or confirm that the
Agent has, for the pro rata benefit of the Banks, a first priority security
interest in all of CellStar Telecom's shares of capital stock of Xxxx
Telecom, pursuant to a Pledge Agreement and the Consent, Ratification and
Confirmation.
(l) The Borrower and each Guarantor shall execute and cause to be
executed such further documents and instruments, including without
limitation Uniform Commercial Code financing statements, as the Agent, in
its sole discretion, deems necessary or desirable to create, evidence,
preserve, and perfect its liens and security interest in the Collateral.
Notwithstanding any provision or language to the contrary, nothing herein or in
the Loan Documents shall operate or be construed to create any assignment,
mortgage or Lien in any xxxx of Borrower or any Guarantor which is the subject
of an intent-to-use application for federal registration under 15 U.S.C. (S)
1051(b), prior to the filing of the Verified Statement of Use under 15 U.S.C.
(S) 1051(d) or any assignment, mortgage or Lien otherwise prohibited under the
provisions of the second sentence of 15 U.S.C. (S) 1060.
Section 6.2. Setoff. If an Event of Default shall have occurred and be
------
continuing, the Agent and each Bank shall have the right to set off and apply
against the Obligations in such manner as the Agent or such Bank may determine,
at any time and without notice to the Borrower, any and all deposits (general or
special, time or demand, provisional or final) or other sums at any time
credited by or owing from the Agent or such Bank to the Borrower whether or not
the Obligations are then due. Each Bank agrees to promptly notify the Agent
after any such setoff and application. The rights and remedies of the Agent and
the Banks hereunder are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which the Agent and the Banks may
have.
Section 6.3. Other Subsidiaries. The Borrower shall cause each Person
------------------
which is now or hereafter becomes a Subsidiary (other than Foreign Subsidiaries)
to execute and deliver to the Agent (a) a Guaranty in form and substance
satisfactory to the Agent, pursuant to which such Subsidiary guaranties the
prompt payment and performance in full of all of the Obligations, (b) a
Guarantor Security Agreement in form and substance satisfactory to the Agent,
pursuant to which such Subsidiary grants to the Agent, for the pro rata benefit
of the Banks, a first priority security interest in all of such Subsidiary's
personal property, including without limitation the types of personal property
described in Section 6.1(b), whether now owned or hereafter acquired, and all
--------------
products and proceeds thereof, and (c) appropriate documentation to become a
party to the Contribution and Indemnification Agreement. With regard to each
Person which is now or hereafter becomes a Subsidiary (other than Foreign
Subsidiaries), the Borrower shall execute or cause to be executed a pledge
agreement in form and substance satisfactory to the Agent, pursuant to which the
Agent, for
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the pro rata benefit of the Banks, is granted a first priority security interest
(a) in the case of a Domestic Subsidiary (excluding the holding company of any
Foreign Subsidiary), in all of the capital stock of such Subsidiary, and (b) in
the case of a holding company of any Foreign Subsidiary, 65% of the shares of
voting stock and all of the shares of non-voting preferred stock of such
Subsidiary. The Borrower shall cause to be executed and delivered to the Agent
(i) such further documents and instruments, including without limitation Uniform
Commercial Code financing statements, as the Agent in its sole discretion deems
necessary or desirable to create, evidence, preserve, and perfect its Liens in
the Collateral, and (ii) such legal opinions, corporate and partnership
documents and certificates as Agent or its counsel may require in connection
with the documents executed and delivered pursuant to this Section.
ARTICLE VII
Conditions Precedent
--------------------
Section 7.1. Initial Extension of Credit. The obligation of the Agent
---------------------------
and the Banks to make the initial Advance or issue the initial Letter of Credit
hereunder is subject to the condition precedent that the Agent shall have
received on or before the day of such Advance or Letter of Credit all of the
following, each dated (unless otherwise indicated) the date hereof or the date
of the Existing Credit Agreement, as appropriate, in form and substance
satisfactory to the Agent:
(a) Resolutions. Resolutions of the Board of Directors of the
-----------
Borrower and each Guarantor certified by the Secretary or an Assistant
Secretary of such Person which authorize (i) the execution, delivery, and
performance by the Borrower of this Agreement and the other Loan Documents
to which such Person is or is to be a party, (ii) the execution, delivery,
and performance by each Guarantor of the Guaranty and other Loan Documents
to which such Person is or is to be a party, and (iii) the execution,
delivery and performance by NAC, Holdings and Fulfillment, respectively, on
behalf of the Partnerships, of the Loan Documents to which the Partnerships
are or are to be parties;
(b) Incumbency Certificate. A certificate of incumbency certified
----------------------
by the Secretary or an Assistant Secretary of the Borrower and each
Guarantor, respectively, certifying the names of (i) the officers of the
Borrower authorized to sign this Agreement and each of the other Loan
Documents to which the Borrower is or is to be a party (including the
certificates contemplated herein) together with specimen signatures of such
officers, (ii) the officers of each Guarantor authorized to sign the
Guaranty and the other Loan Documents to which each Guarantor is or is to
be a party (including the certificates contemplated herein) together with
specimen signatures of such officers, and (iii) the officers of NAC,
Holdings and Fulfillment on behalf of the Partnerships authorized to sign
the Loan Documents to which the Partnerships are or are to be parties
(including the certificates contemplated therein) together with specimen
signatures of such officers;
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(c) Articles of Incorporation. The articles or certificate of
-------------------------
incorporation of the Borrower and each Guarantor, if applicable,
respectively, certified by the Secretary of State of such Person's state of
incorporation and dated within 20 days prior to the date hereof;
(d) Bylaws. The bylaws of the Borrower and each Guarantor, if
------
applicable, certified by the Secretary or an Assistant Secretary of such
Person;
(e) Governmental Certificates. Certificates of the appropriate
--------------------------
governmental officials of the respective states of incorporation of the
Borrower and each Guarantor as to the existence and good standing of such
Persons and certificates of the appropriate governmental officials of each
state where any such Persons own property, conduct business or employ any
Persons as to the qualification and good standing of such Persons,
respectively, in such jurisdictions, each dated within 20 days prior to the
date hereof;
(f) Partnership Agreements. A copy of the Agreement of Limited
----------------------
Partnership of each of the Partnerships, certified by the Secretary or an
Assistant Secretary of the general partner of such Partnership;
(g) Certificate of Limited Partnership. Certificate of Limited
-----------------------------------
Partnership, certified by the Secretary of State of the State of Texas, for
each of the Partnerships, dated within 20 days prior to the date hereof;
(h) Partnership Governmental Certificates. Certificates of the
-------------------------------------
Secretary of State of the State of Texas as to the existence of each of the
Partnerships, and certificates of the appropriate governmental officials of
each state where the Partnerships conduct business or employ any Persons as
to the qualification of the Partnerships to do business in such
jurisdictions, each dated within 20 days prior to the date hereof;
(i) Notes. The Notes of the Agent and each Bank, executed by the
-----
Borrower;
(j) Borrower Security Agreement. The Borrower Security Agreement
---------------------------
executed by the Borrower;
(k) Guarantor Security Agreements. The Guarantor Security Agreements
-----------------------------
executed by the respective Guarantors;
(l) Pledge Agreements. The Pledge Agreements, each executed by the
-----------------
Borrower, Fulfillment, Holdings, Audiomex, NAC, CAS, CellStar International
and CellStar Telecom;
(m) Financing Statements. Uniform Commercial Code financing
--------------------
statements executed by the Borrower and the Guarantors and covering such
Collateral as the Agent may request;
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(n) Intellectual Property Documentation. Documentation satisfactory
-----------------------------------
to the Agent, executed by the appropriate parties, (i) for recording in the
U.S. Patent and Trademark Office to properly reflect Agent's security
interest in all U.S. patents, trademarks and applications therefor of the
Borrower and the Guarantors, and (ii) for recording with the United States
Library of Congress to properly reflect Agent's security interest in all
U.S. copyrights and applications therefor of the Borrower and the
Guarantors;
(o) Guaranties. The Guaranties, executed by the Guarantors;
----------
(p) Contribution and Indemnification Agreement. A Contribution and
------------------------------------------
Indemnification Agreement, executed by the Borrower and the Guarantors;
(q) Consent, Ratification and Confirmation. The Consent, Ratification
--------------------------------------
and Confirmation, executed by the Borrower and the Guarantors.
(r) Intercompany Loan Documentation. Documentation (including without
-------------------------------
limitation promissory notes, security agreements and financing statements)
satisfactory to Agent evidencing advances made or to be made by the
Borrower or any Guarantor to any Guarantor and obligations of such
Guarantor to repay such advances, such obligations to be secured by a
second priority security interest on the Collateral, and all of such
obligations, security interests and documentation to be subject to a
security interest in favor of the Agent pursuant to the Loan Documents;
(s) Landlord and Mortgagee Waivers. Landlord and mortgagee waivers
------------------------------
required by Section 4.7 of the Borrower Security Agreement and the
-----------
Guarantor Security Agreements to be delivered on or before the date hereof;
(t) L/C Documents. With respect to issuance of any Letter of Credit,
-------------
Agent shall have received all applicable L/C Documents, if any, as required
by Section 3.1;
-----------
(u) Insurance Policies. Certificate of insurance with respect to all
------------------
insurance policies required by Section 9.5, and reflecting loss payable
-----------
endorsements in favor of the Agent with respect to all insurance policies
covering Collateral;
(v) UCC Search. The results of a Uniform Commercial Code search
----------
showing all financing statements and other documents or instruments on file
against the Borrower and the Guarantors in the office of the Secretary of
State of the State of Texas and such other jurisdictions as the Agent may
request, each such search to be as of a date no more than 10 days prior to
the date hereof;
(w) Opinion of Counsel. Favorable opinion of legal counsel to the
------------------
Borrower, Guarantors and the Subsidiaries, in form and substance
satisfactory to the Agent, as to such matters as the Agent may reasonably
request;
-54-
(x) Fees. Evidence that all fees provided for in the Engagement
----
Letter and the Fee Letter shall have been paid in full by the Borrower;
(y) Financial Statements. A copy of Form 10Q of the Borrower and
--------------------
the Subsidiaries on a consolidated basis for the fiscal quarter ended May
31, 1999 and for the portion of the fiscal year then ended;
(z) Compliance Certificate. An initial Compliance Certificate
----------------------
dated as of the date hereof for the fiscal quarter ended May 31, 1999,
executed by the president, chief executive officer, chief financial officer
or corporate controller of the Borrower;
(aa) Solvency Certificate. A certificate, in form and substance
--------------------
satisfactory to the Agent, executed by the chief financial officer of the
Borrower as to the solvency of each of the Companies;
(aa) Legal Structure. Evidence of legal structure of the Borrower
---------------
and its Subsidiaries, in form and substance satisfactory to Banks.
Section 7.2. All Extensions of Credit. The obligation of the Banks to
------------------------
make any Advance or issue any Letter of Credit (including the initial Advance
and the initial Letter of Credit) is subject to the following additional
conditions precedent:
(a) Request for Advance or Letter of Credit. The Agent shall have
---------------------------------------
received in accordance with Section 2.6 or 3.2, as the case may be, an
----------- ---
Advance Request Form or Letter of Credit Request Form dated the date of
such Advance or Letter of Credit and executed by an authorized officer of
the Borrower;
(b) L/C Documents. With respect to any Letter of Credit, Agent
-------------
shall have received all applicable L/C Documents as required by Section
-------
3.1;
---
(c) No Default. No Default shall have occurred and be continuing,
----------
or would result from such Advance or Letter of Credit;
(d) Representations and Warranties. All of the representations
------------------------------
and warranties contained in Article VIII hereof and in the other Loan
------------
Documents shall be true and correct on and as of the date of such Advance
with the same force and effect as if such representations and warranties
had been made on and as of such date;
(e) No Material Adverse Change. No material adverse change in the
--------------------------
Borrower or its Subsidiaries shall have occurred since the date of the most
recent financial statements delivered by Borrower to Agent or could be
reasonably expected to occur, and no material adverse change shall have
occurred in the business condition (financial or otherwise), operations,
prospects, or properties of the Borrower and its Subsidiaries on a
consolidated basis; and
-55-
(f) Additional Documentation. The Agent shall have received such
------------------------
additional approvals, opinions, or documents as the Agent or its legal
counsel, Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., may reasonably request.
ARTICLE VIII
Representations and Warranties
------------------------------
To induce the Agent and the Banks to enter into this Agreement, the
Borrower represents and warrants to the Agent and the Banks that:
Section 8.1. Existence and Authority. The Borrower and each
-----------------------
Significant Subsidiary (a) is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation, or
is a limited partnership duly organized and validly existing under the laws of
the State of Texas; (b) has all requisite power and authority to own its assets
and carry on its business as now being or as proposed to be conducted; and (c)
is qualified to do business in all jurisdictions in which the nature of its
business makes such qualification necessary and where failure to so qualify
would have a Material Adverse Effect. The Borrower and each Guarantor each has
the power and authority to execute, deliver, and perform its obligations under
this Agreement and the other Loan Documents to which it is or may become a
party.
Section 8.2. Financial Statements. The Borrower has delivered to the
--------------------
Agent audited consolidated financial statements of the Borrower and its
Subsidiaries as at and for the fiscal year ended November 30, 1998 and unaudited
consolidated financial statements of the Borrower and its Subsidiaries for the
six-month period ended May 31, 1999. Such financial statements are true and
correct, have been prepared in accordance with GAAP, and fairly and accurately
present, on a consolidated basis, the financial condition of the Borrower and
the Subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. Neither the Borrower
nor any of the Subsidiaries has any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments, or unrealized or anticipated
losses from any unfavorable commitments that are material with respect to the
Borrower or the Subsidiaries taken as a whole, except as referred to or
reflected in such financial statements. There has been no material adverse
change in the business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower or any of the Subsidiaries since the
effective date of the most recent consolidated financial statements referred to
in this Section.
Section 8.3. Corporate Action; No Breach. The execution, delivery, and
---------------------------
performance by the Borrower of this Agreement and by the Borrower and each
Guarantor of the other Loan Documents to which they are party and compliance
with the terms and provisions hereof and thereof, have been duly authorized by
all requisite corporate and partnership action on the part of each such Person
and do not and will not (a) violate or conflict with, or result in a breach of,
or require any consent under (i) the articles of incorporation, certificate of
incorporation, bylaws, partnership agreement or other organizational documents
of any such Person, (ii) any applicable law, rule, or regulation or any order,
writ, injunction, or decree of any Governmental Authority or arbitrator, or
-56-
(iii) any agreement or instrument to which any such Person is a party or by
which any of them or any of their property is bound or subject, or (b)
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien (except as provided in Article VI) upon any
----------
of the revenues or assets of any such Person.
Section 8.4. Operation of Business. The Borrower and each of the
---------------------
Significant Subsidiaries possess all licenses, permits, franchises, patents,
copyrights, trademarks, and tradenames, or rights thereto, necessary to conduct
their respective businesses substantially as now conducted and as presently
proposed to be conducted, except where failure to do so would not have a
Material Adverse Effect. None of the Borrower or the Significant Subsidiaries
is in violation of any valid rights of others with respect to any of the
foregoing, except where such violation would not have a Material Adverse Effect.
Section 8.5. Litigation and Judgments. Except as disclosed on Schedule 8.5
------------------------ ------------
hereto, there is no action, suit, investigation, or proceeding before or by any
Governmental Authority or arbitrator pending, or to the knowledge of the
Borrower, threatened against or affecting the Borrower, any Subsidiary, or any
Foreign Affiliate that would, if adversely determined, have a Material Adverse
Effect. There are no outstanding judgments against the Borrower or any
Subsidiary which individually or in the aggregate have or could have a Material
Adverse Effect. As of the date hereof, there are no outstanding judgments
against the Borrower or any Subsidiary.
Section 8.6. Rights in Properties; Liens. The Borrower and each
---------------------------
Significant Subsidiary have good and indefeasible title to or valid leasehold
interests in their respective properties and assets, real and personal,
including the properties, assets, and leasehold interests reflected in the
financial statements described in Section 8.2, and none of the properties,
-----------
assets, or leasehold interests of the Borrower or any Significant Subsidiary is
subject to any Lien, except as permitted by Section 10.2.
------------
Section 8.7. Enforceability. This Agreement constitutes, and the other
--------------
Loan Documents when delivered, shall constitute legal, valid, and binding
obligations of the Borrower and each Guarantor, respectively, which are party
thereto, enforceable against such Persons, respectively, in accordance with
their respective terms, except as limited by (i) bankruptcy, insolvency, or
other laws of general application relating to the enforcement of creditors'
rights, and (ii) general principles of equity, whether applied in a proceeding
in equity or at law.
Section 8.8. Approvals. No authorization, approval, or consent of, and no
---------
filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Borrower or
any Guarantor of this Agreement and the other Loan Documents to which the
Borrower or the Guarantors, respectively, is or may become a party or the
validity or enforceability thereof.
Section 8.9. Debt. The Borrower and the Subsidiaries have no Debt, except
----
as disclosed on Schedule 8.9 hereto or otherwise permitted by Section 10.1
------------ ------------
hereof.
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Section 8.10. Taxes. The Borrower and each Subsidiary have filed all tax
-----
returns (federal, state, and local) required to be filed, including all income,
franchise, employment, property, and sales tax returns, except for any state or
local tax returns the nonfiling of which will not have a Material Adverse
Effect. The Borrower and each Subsidiary have paid all of their respective
liabilities for taxes, assessments, governmental charges, and other levies that
are due and payable, except for any state or local taxes, assessments,
governmental charges and levies which are not known by the Borrower or any
Subsidiary to be due and payable if the nonpayment thereof will not have a
Material Adverse Effect. The Borrower does not know of any pending investigation
of the Borrower or any Subsidiary by any taxing authority or of any pending but
unassessed tax liability of the Borrower or any Subsidiary.
Section 8.11. Use of Proceeds; Margin Securities. None of the Borrower or
----------------------------------
the Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations T, U, or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Advance will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying margin stock.
Section 8.12. ERISA. The Borrower and each Subsidiary are in compliance in
-----
all material respects with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan. No notice of intent to terminate a Plan has been
filed, nor has any Plan been terminated. No circumstances exist which constitute
grounds entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such proceedings.
Neither the Borrower nor any Guarantor nor any ERISA Affiliate has completely or
partially withdrawn from a Multiemployer Plan. The Borrower, each Guarantor and
each ERISA Affiliate have met their minimum funding requirements under ERISA
with respect to all of their Plans, and the present value of all vested benefits
under each Plan do not exceed the fair market value of all Plan assets allocable
to such benefits, as determined on the most recent valuation date of the Plan
and in accordance with ERISA. Neither the Borrower nor any Guarantor nor any
ERISA Affiliate has incurred any liability to the PBGC under ERISA.
Section 8.13. Disclosure. No statement, information, report,
----------
representation, or warranty made by the Borrower or any Guarantor in this
Agreement or in any other Loan Document or furnished to the Agent in connection
with this Agreement or any of the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements herein or therein not materially misleading.
There is no fact known to the Borrower or any Guarantor which has a Material
Adverse Effect, or which is likely to in the future have a Material Adverse
Effect, that has not been disclosed in writing to the Agent.
Section 8.14. Subsidiaries; Foreign Affiliates. The Borrower has no
--------------------------------
Subsidiaries other than those listed on Schedule 8.14 hereto, and Schedule 8.14
------------- -------------
(a) sets forth the jurisdiction of incorporation or organization of each
Subsidiary, (b) sets forth the percentage of the Borrower's or any Subsidiary's
ownership of the outstanding voting stock or other ownership or equity interests
of each Subsidiary, and (c) designates the Foreign Subsidiaries. All of the
outstanding capital stock of each Subsidiary,
-58-
other than the Foreign Subsidiaries, has been validly issued, is fully paid, and
is nonassessable. All of the Foreign Affiliates are specified on Schedule 8.14,
-------------
and Schedule 8.14 (a) sets forth the jurisdiction of incorporation or
-------------
organization of each Foreign Affiliate, and (b) sets forth the percentage of the
Borrower's or any Subsidiary's ownership of the outstanding voting stock or
other ownership or equity interests of each Foreign Affiliate. The Borrower
shall, from time to time as necessary, deliver to Agent an updated Schedule 8.14
-------------
to this Agreement, together with a certificate of an authorized officer of the
Borrower certifying that the information set forth in such schedule is true,
correct, and complete as of such date.
Section 8.15. Agreements. None of the Borrower or the Subsidiaries is a
----------
party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction
which could have a Material Adverse Effect. None of the Borrower or the
Subsidiaries is in default in any material respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument material to its business to which it is
a party.
Section 8.16. Compliance with Laws. None of the Borrower, the Subsidiaries
--------------------
or, to the best of the Borrower's knowledge, the Foreign Affiliates is in
violation in any material respect of any law, rule, regulation, order, or decree
of any Governmental Authority or arbitrator, except to the extent that the
failure to comply therewith will not have a Material Adverse Effect.
Section 8.17. Investment Company Act. None of the Borrower or the
----------------------
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 8.18. Public Utility Holding Company Act. None of the Borrower or
----------------------------------
the Subsidiaries is a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 8.19. Environmental Matters. Except as disclosed on Schedule 8.19
--------------------- -------------
hereto, (a) to the best of the Borrower's knowledge, there are no conditions or
circumstances associated with the currently or previously owned or leased
properties or operations of the Borrower or any Subsidiary that could reasonably
be expected to give rise to any Environmental Liabilities of the Borrower or any
Subsidiary, and (b) no Lien arising under any Environmental Law has attached to
any property or revenues of the Borrower or any Subsidiary.
Section 8.20. Patents, Trademarks and Copyrights. Schedule 8.20 hereto
---------------------------------- -------------
sets forth a true, accurate and complete listing, as of the date hereof, of all
patents, trademarks and copyrights, and applications therefor, of the Borrower
and Guarantors. Except as created or permitted under the Loan Documents, no Lien
exists with respect to the interest of the Borrower or any Guarantor in any such
patents, trademarks, copyrights or applications, and neither the Borrower nor
any Guarantor has transferred or subordinated any interest it may have in such
patents, trademarks, copyrights and applications. The Borrower shall, from time
to time as necessary, deliver to Agent an updated Schedule 8.20 to this
-------------
Agreement, together with a certificate of an authorized officer of the Borrower
-59-
certifying that the information set forth on such schedule is true, correct and
complete as of such date, which schedule may be used to prepare additional
assignments, if necessary.
Section 8.21. Relationship to the Banks. No Person having "control" (as
-------------------------
such term is defined in the Financial Institutions Regulatory and Interest Rate
Control Act of 1978 ("FIRA"), or in regulations promulgated pursuant thereto) of
----
the Borrower or any of the Subsidiaries is an "executive officer," "director" or
"person who directly or indirectly or in concert with one or more persons, owns,
controls, or has the power to vote more than 10% of any class of voting
securities" (as such terms are defined in FIRA or in any regulations promulgated
pursuant thereto) of the Agent or any of the Banks.
Section 8.22. Government Regulation. Neither the Borrower, any Subsidiary
---------------------
nor any Foreign Affiliate is subject to regulation under the Federal Power Act,
the Interstate Commerce Act (as any of the preceding acts have been amended) or
any other Law (other than Regulation X) which regulates the incurring by
Borrower or any Subsidiary of Advances.
Section 8.23. Foreign Employee Benefit Matters. To the best of Borrower's
--------------------------------
and its Subsidiaries' knowledge after diligent inquiry of all relevant Persons:
(a) each Foreign Employee Benefit Plan is in compliance in all respects with all
laws, regulations and rules applicable thereto and the respective requirements
of the governing documents for such Plan, except for any non-compliance the
consequences of which, in the aggregate, would not result in a Material Adverse
Effect; (b) the aggregate of the accumulated benefit obligations under all
Foreign Pension Plans does not exceed the current fair market value of the
assets held in the trusts or similar funding vehicles for such Plans or
reasonable reserves have been established in accordance with prudent business
practices or as required by Agreement Accounting Principles with respect to any
shortfall; (c) with respect to any Foreign Employee Benefit Plan (other than a
Foreign Pension Plan) maintained or contributed to by Borrower or any
Subsidiary, reasonable reserves have been established in accordance with prudent
business practice or where required by ordinary accounting practices in the
jurisdiction in which such Plan is maintained; and (d) there are no actions,
suits or claims (other than routine claims for benefits) pending or, to the
knowledge of Borrower and its Subsidiaries, threatened against Borrower or any
Subsidiary of it or any ERISA Affiliate with respect to any Foreign Employee
Benefit Plan that would, if adversely determined, have a Material Adverse
Effect.
Section 8.24. Year 2000 Compliance. Any reprogramming required to permit
--------------------
the proper functioning, in and following the year 2000, of each of the
Borrower's and the Subsidiaries' computer systems and equipment containing
embedded microchips the failure of which systems or equipment would have a
Material Adverse Effect (including systems and equipment supplied by others or
with which each of the Borrower's and the Subsidiaries' systems interface) and
the testing of all such systems and equipment, as so reprogrammed, will be
completed by September 30, 1999. The cost to the Borrowers and the Subsidiaries
of such reprogramming and testing and of the reasonably foreseeable consequences
of year 2000 to each of the Borrowers and the Subsidiaries (including, without
limitation, reprogramming errors and the failure of others' systems or
equipment) will not result in a Default, an Event of Default, or have a Material
Adverse Effect. Except for such of the reprogramming referred to in the
preceding sentence as may be necessary, the computer and
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management information systems of each of the Borrowers and the Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the term
of this Agreement to be, sufficient to permit each of the Borrowers and the
Subsidiaries to conduct their respective business without having a Material
Adverse Effect.
ARTICLE IX
Affirmative Covenants
---------------------
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or the Agent or any Bank has any Commitment
hereunder, the Borrower will perform and observe the following affirmative
covenants, unless the Required Banks (or Agent with the consent of the Required
Banks) shall otherwise consent in writing:
Section 9.1. Reporting Requirements. The Borrower will furnish to the
----------------------
Agent and each Bank:
(a) Annual Consolidated and Consolidating Financial Statements.
----------------------------------------------------------
As soon as available, and in any event within 90 days after the end of each
fiscal year of the Borrower (or such later period as may be permitted by
law for reporting companies under the Securities Exchange Act of 1934, as
amended), beginning with the fiscal year ending November 30, 1999, (i) a
copy of the Borrower's annual report on Form 10-K as filed with the
Securities and Exchange Commission and a copy of the annual audited
financial report of the Borrower and the Subsidiaries for such fiscal year
containing, on a consolidated basis, balance sheets and statements of
operations, stockholders' equity, and cash flows as at the end of such
fiscal year and for the 12-month period then ended, in each case setting
forth in comparative form the figures for the preceding fiscal year, all in
reasonable detail and audited and certified by, and accompanied by the
unqualified opinion of, independent certified public accountants of
recognized standing acceptable to the Agent, to the effect that such report
has been prepared in accordance with GAAP and presents fairly the
consolidated financial condition and results of operations of the Borrower
and the Subsidiaries at the date and for the periods indicated therein, and
(ii) consolidating financial statements of the Borrower and the
Subsidiaries, containing a balance sheet and statement of operations, all
in reasonable detail;
(b) Quarterly Consolidated and Consolidating Financial
--------------------------------------------------
Statements. As soon as available, and in any event within 45 days after the
----------
end of each of the first three quarters of each fiscal year of the Borrower
(or such later period as may be permitted by law for reporting companies
under the Securities Exchange Act of 1934, as amended), (i) a copy of an
unaudited financial report of the Borrower and the Subsidiaries as of the
end of such fiscal quarter and for the portion of the fiscal year then
ended on Form 10-Q as filed with the Securities and Exchange Commission,
containing, on a consolidated basis, balance sheets and statements of
operations and cash flows, in each case setting forth in comparative form
the figures for the corresponding period of the preceding fiscal year, all
in reasonable detail and
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certified by the chief financial officer or corporate controller of the
Borrower to have been prepared in accordance with GAAP and to fairly and
accurately present (subject to year-end audit adjustments) the financial
condition and results of operations of the Borrower and the Subsidiaries,
on a consolidated basis, at the date and for the periods indicated therein,
and (ii) consolidating financial statements of the Borrower and the
Subsidiaries, containing a balance sheet and statement of operations, all
in reasonable detail;
(c) Annual Budget. As soon as available, and in any event within 60
-------------
days after the end of each fiscal year of the Borrower, a copy of the
annual budget for the Borrower's next succeeding fiscal year including,
without limitation, (i) a forecasted balance sheet, statement of income and
statement of cash flows for such fiscal year, (ii) forecasted balance
sheets, statements of income and statements of cash flows for each fiscal
quarter of such fiscal year, and (iii) as soon as practicable, all material
amendments, updates and revisions, if any, to the information provided
pursuant to this subsection (e);
--------------
(d) Compliance Certificate. Concurrently with the delivery of each of
----------------------
the financial statements referred to in subsections 9.1(a) and (b), a
------------------ ---
Compliance Certificate showing calculation of the financial covenants;
(e) Notice of Litigation. Promptly after the commencement thereof,
--------------------
notice of all actions, suits, and proceedings before any Governmental
Authority or arbitrator affecting the Borrower, any Subsidiary or any
Foreign Affiliate which, if determined adversely to the Borrower, such
Subsidiary, or such Foreign Affiliate could have a Material Adverse Effect;
(f) Notice of Default. As soon as possible and in any event within
-----------------
five days after the Borrower, any Subsidiary or any Foreign Affiliate
obtains knowledge or becomes aware of the occurrence of any Default, a
written notice setting forth the details of such Default and the action
that the Borrower and such other Person have taken and propose to take with
respect thereto;
(g) Notice of Material Adverse Change. As soon as possible and in any
---------------------------------
event within five days after the Borrower, any Subsidiary or any Foreign
Affiliate obtains knowledge or becomes aware of the occurrence of any
matter that could have a Material Adverse Effect, written notice of such
matter;
(h) Notice of Change in Representation or Warranty. As soon as
----------------------------------------------
possible and in any event within five days after the Borrower, any
Subsidiary or any Foreign Affiliate obtains knowledge or becomes aware of
any change in any material fact or circumstance represented or warranted in
any of the Loan Documents, written notice of such change;
(i) Borrowing Base Report. As soon as available, and in any event
---------------------
within 25 days after the end of each calendar month, a Borrowing Base
Report, in substantially the form of Exhibit E hereto, certified by the
---------
president, chief executive officer, chief financial officer or corporate
controller of the Borrower, together with (i) an accounts receivable aging
report
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in form and detail satisfactory to Agent showing all accounts receivable of
the Companies divided into domestic and international categories and aged
in thirty-day intervals, (ii) an inventory report in form and detail
satisfactory to Agent, (iii) information in form and detail satisfactory to
the Agent showing the percentage of Eligible Inventory comprised of
cellular telephones, and (iv) an accounts receivable report in form and
detail satisfactory to Agent, showing with respect to each Foreign
Subsidiary and each Foreign Affiliate all accounts receivable of the
Companies owed by such Foreign Subsidiary or Foreign Affiliate, and (v)
such additional information regarding inventory turns on domestic inventory
as the Agent or any Bank may at any time require; and
(j) General Information. Promptly, such other information
-------------------
concerning the Borrower, any Subsidiary or any Foreign Affiliate as the
Agent or any Bank may from time to time reasonably request.
All financial statements, certificates and reports required to be delivered
under this Section shall be due on the Business Day immediately following the
specified due date if the specified due date is not a Business Day.
Section 9.2. Maintenance of Existence; Conduct of Business. Except as
---------------------------------------------
permitted by Section 10.3, the Borrower will preserve and maintain, and will
------------
cause each Subsidiary to preserve and maintain, its corporate or partnership
existence and all of its leases, privileges, licenses, permits, franchises,
qualifications, agreements and rights that are necessary or desirable in the
ordinary conduct of its business. The Borrower will conduct, and will cause
each Subsidiary and each Foreign Affiliate to conduct, its business in an
orderly and efficient manner in accordance with good business practices.
Section 9.3. Maintenance of Properties. The Borrower will maintain,
-------------------------
keep, and preserve, and cause each Subsidiary to maintain, keep, and preserve,
in good working order and condition, all of its properties (tangible and
intangible) which are useful in any material respect in the proper conduct of
its business or are necessary in the proper conduct of its business.
Section 9.4. Taxes and Claims. The Borrower will pay or discharge, and
----------------
will cause each Subsidiary to pay or discharge, at or before maturity or before
becoming delinquent (a) all taxes, levies, assessments, and governmental charges
imposed on it or its income or profits or any of its property, and (b) all
lawful claims for labor, material, and supplies, which, if unpaid, might become
a Lien upon any of its property; provided, however, that none of the Borrower or
the Subsidiaries shall be required to pay or discharge any tax, levy,
assessment, or governmental charge or any claim for labor, material, or supplies
which is being contested in good faith by appropriate proceedings diligently
pursued, and for which adequate reserves have been established.
Section 9.5. Insurance. The Borrower will maintain, and will cause
---------
each of the Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies in such amounts and covering such risks as is
usually carried by corporations engaged in similar businesses and owning similar
properties in the same general geographic areas in which the Borrower and the
Subsidiaries
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operate, provided that in any event the Borrower will maintain and cause each
Subsidiary to maintain workmen's compensation insurance, property insurance,
comprehensive general liability insurance, and products liability insurance
reasonably satisfactory to the Agent. Each insurance policy covering Collateral
shall name the Agent as loss payee and shall provide that such policy will not
be cancelled or reduced without 30 days prior written notice to the Agent.
Section 9.6. Inspection Rights. At any reasonable time during normal
-----------------
business hours and from time to time, the Borrower will permit, and will cause
each Subsidiary and each Foreign Affiliate to permit, representatives of the
Agent and each Bank to examine, copy, and make extracts from its books and
records, to visit and inspect its properties, and to discuss its business,
operations, and financial condition with its officers, employees, and
independent certified public accountants. Without in any way limiting the
foregoing, Agent may conduct (or cause a third party to conduct) semiannual
audits of the Collateral (the "Semiannual Collateral Audits") at the expense of
----------------------------
the Borrower, and any of the Banks may accompany the Agent and participate in
such audits to the extent desired by such Bank. Such audits may be performed by
Agent's in-house audit and asset management review staff. The Borrower agrees
to pay to Agent on demand all fees, charges and out-of-pocket expenses of Agent
in connection with each such audit.
Section 9.7. Keeping Books and Records. The Borrower will maintain,
-------------------------
will cause each Subsidiary to maintain, and will use its best efforts to cause
each Foreign Affiliate to maintain, proper books of record and account in which
full, true, and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities; provided,
however, that the Foreign Subsidiaries and the Foreign Affiliates shall be
permitted to maintain day-to-day books of record and account in accordance with
local statutory accounting practices rather than GAAP.
Section 9.8. Compliance with Laws and Agreements. The Borrower will
-----------------------------------
comply, and will cause each Subsidiary to comply, in all material respects with
all applicable laws, rules, regulations, orders, and decrees of any Governmental
Authority or arbitrator and all material agreements, contracts, and instruments
binding on it or affecting its properties or business.
Section 9.9. Further Assurances. The Borrower will, and will cause
------------------
each Subsidiary and each Foreign Affiliate to, execute and deliver such further
agreements and instruments and take such further action as may be requested by
the Agent to carry out the provisions and purposes of this Agreement and the
other Loan Documents and to create, preserve, and perfect the Liens of the Agent
in the Collateral.
Section 9.10. ERISA. The Borrower will comply, and will cause each
-----
Subsidiary to comply, with all minimum funding requirements, and all other
material requirements, of ERISA, if applicable, so as not to give rise to any
liability for failure to comply with the requirements of ERISA.
Section 9.11. Foreign Employee Benefit Compliance. Borrower will, and
-----------------------------------
will cause each of its Subsidiaries and ERISA Affiliates to, establish, maintain
and operate all Foreign Employee Benefit Plans to comply in all material
respects with all laws, regulations and rules applicable thereto
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and the respective requirements of the governing documents for such Plans,
except for failures to comply which, in the aggregate, would not result in a
Material Adverse Effect.
ARTICLE X
Negative Covenants
------------------
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or the Agent or any Bank has any Commitment
hereunder, the Borrower will perform and observe the following negative
covenants, unless the Required Banks (or the Agent with the consent of the
Required Banks) shall otherwise consent in writing:
Section 10.1. Debt. The Borrower will not incur, create, assume, or
----
permit to exist, or permit any Subsidiary or Foreign Affiliate to incur, create,
assume, or permit to exist, any Debt, except:
(a) Debt to the Agent and the Banks hereunder;
(b) Debt of the Subsidiaries and Foreign Affiliates pursuant to
loans and advances permitted by Section 10.5(i);
---------------
(c) Debt of Foreign Subsidiaries which is secured by a Letter of
Credit;
(d) Debt of the Foreign Subsidiaries and Debt of the Foreign
Affiliates, all incurred when no Default exists or would result therefrom,
provided that the aggregate amount of all such Debt (including such Debt
existing on the date hereof and described on Schedule 8.9 hereto, but
------------
excluding such Debt permitted under subsections (b) and (c) above)
--------------- ---
outstanding at any time shall not exceed $40,000,000 in the aggregate, it
being understood that trade payables of the Borrower and the Subsidiaries
for the purchase of goods or materials in the ordinary course of business
are not prohibited or limited by this Section 10.1;
------------
(e) Guarantees by the Borrower or any Subsidiary of any Debt of
any of the Foreign Subsidiaries or the Foreign Affiliates, all incurred
when no Default exists or would result therefrom, provided that the
aggregate amount of all such Guarantees (including such Guarantees existing
on the date hereof and described on Schedule 8.9 hereto) outstanding at any
------------
time shall not exceed $30,000,000 in the aggregate, it being understood
that Guarantees of trade payables of the Borrower and the Subsidiaries for
the purchase of goods or materials in the ordinary course of business are
not prohibited or limited by this Section 10.1;
------------
(f) Debt consisting of accounts payable of the Companies to each
other for sales of inventory in the ordinary course of business;
(g) Debt of the Guarantors to the Borrower or any Guarantor
under the promissory notes referred to in Section 7.1(q);
--------------
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(h) Debt under the Subordinated Note Documents; and
(i) Any other Debt existing on the date hereof and described on
Schedule 8.9 hereto.
------------
Section 10.2. Limitation on Liens. The Borrower will not incur, create,
-------------------
assume, or permit to exist, or permit any Subsidiary to incur, create, assume,
or permit to exist, any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except:
(a) Liens disclosed on Schedule 10.2 hereto;
-------------
(b) Liens in favor of the Agent pursuant to the Loan Documents;
(c) Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property that do not
(individually or in the aggregate) materially affect the value of the
assets encumbered thereby or materially impair the ability of the Borrower
or the Subsidiaries to use such assets in their respective businesses, and
none of which is violated in any material respect by existing or proposed
structures or land use;
(d) Liens for taxes, assessments, or other governmental charges
which are not delinquent or which are being contested in good faith and for
which adequate reserves have been established;
(e) Liens of landlords (for any location where a landlord's
waiver is not required under the Loan Documents), mechanics, materialmen,
warehousemen, carriers, or other similar statutory Liens securing
obligations that (i) are not yet due and are incurred in the ordinary
course of business or (ii) are being contested in good faith by appropriate
proceedings diligently pursued, and for which adequate reserves have been
established;
(f) Liens resulting from good faith deposits to secure payments
of workmen's compensation, unemployment insurance or other social security
programs or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, or contracts (other than for payment of
Debt), or leases made in the ordinary course of business;
(g) Second priority Liens on the Collateral in favor of the
Borrower or any Guarantor, securing the promissory notes referred to in
Section 7.1(q);
--------------
(h) Liens on the assets of any of the Foreign Subsidiaries or
Foreign Affiliates to secure Debt permitted by Section 10.1(d) in an
---------------
aggregate amount outstanding at any time not to exceed $40,000,000; and
(i) Liens in funds in the possession of credit card companies
pertaining to credit card sales of goods to end users pursuant to merchant
credit card services agreements.
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Section 10.3. Mergers, Etc. The Borrower will not, or will not permit
------------
any Subsidiary to, become a party to a merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets of any Person or any
shares or other evidence of beneficial ownership of any Person, or wind-up,
dissolve, or liquidate; provided, however, that:
(1) the Borrower or any Subsidiary shall be permitted to become
a party to a merger or consolidation or acquire all or any part of the
assets of any Person or any shares or other beneficial ownership of any
Person, so long as (a) no Default is existing or would result therefrom,
(b) the Borrower has given the Agent at least 20 days prior notice of such
merger, consolidation or acquisition, (c) the total cash and non-cash
consideration paid and Debt assumed or incurred by the Borrower or any
Subsidiary in connection with all such mergers, consolidations or
acquisitions (i) shall not exceed $30,000,000 for any single transaction
and (ii) shall not exceed $50,000,000 in the aggregate for any fiscal year,
and (d) the Borrower or such Subsidiary, as the case may be, is the
surviving corporation in such merger or consolidation;
(2) any Guarantor may be dissolved, liquidated or merged into
another Subsidiary, so long as such dissolution, liquidation or merger
results in all assets of such Guarantor being owned by Borrower or another
Guarantor; and
(3) any Subsidiary that is not a Guarantor may be dissolved,
liquidated or merged into Borrower or any Subsidiary, so long as such
dissolution, liquidation or merger results in all assets of such Subsidiary
that is not a Guarantor being owned by Borrower or a Subsidiary.
Section 10.4. Restricted Payments. The Borrower will not make, or permit
-------------------
any Subsidiary to make, any Restricted Payment; provided, however, that (a) the
Subsidiaries shall be permitted to declare and pay dividends to the Borrower or
any Subsidiary that guarantees payment of the Obligations, and (b) the Borrower
or any Subsidiary shall be permitted to declare and make dividend payments or
other distributions payable solely in its own common stock.
Section 10.5. Loans and Investments. The Borrower will not make, or
---------------------
permit any Subsidiary or Foreign Affiliate to make, any advance, loan, extension
of credit, or capital contribution to or investment in, or purchase, or permit
any Subsidiary or Foreign Affiliate to purchase, any stock, bonds, notes,
debentures, or other securities of, any Person, except:
(a) readily marketable direct obligations of the United States
of America or any agency thereof with maturities of one year or less from
the date of acquisition;
(b) fully insured certificates of deposit with maturities of one
year or less from the date of acquisition issued by any commercial bank
operating in the United States of America having capital and surplus in
excess of $50,000,000, provided, however, that time deposits in an
aggregate amount not in excess of $100,000 may be maintained in any bank
whose deposits are insured by the Federal Deposit Insurance Corporation;
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(c) commercial paper of a domestic issuer if at the time of purchase
such paper is rated in one of the two highest rating categories of Standard
& Poor's Rating Service, a division of McGraw/Hill, Inc. or Xxxxx'x
Investors Service, Inc.;
(d) debt securities which shall have one of the two highest ratings
from Standard & Poor's Rating Service, a division of McGraw/Hill, Inc. or
Xxxxx'x Investors Service, Inc. and which mature within one year from the
date of acquisition;
(e) investments in eurodollars placed through any financial
institution having combined capital, surplus, and undivided profits of not
less than $100,000,000;
(f) repurchase agreements with any financial institution having
combined capital, surplus, and undivided profits of not less than
$100,000,000 for U.S. Government obligations maturing in less than 10 days;
(g) investments in daily money market mutual funds having assets
greater than $2,000,000,000 and limited in holdings to assets of the types
described in subsections (a), (b) and (c) of this Section;
--------------- --- ---
(h) investments in the Texas Commerce Loan Participation Program or
similar programs through any financial institution having combined capital,
surplus, and undivided profits of not less than $100,000,000;
(i) (A) stock or other equity or ownership interests in any
Subsidiary or Foreign Affiliate existing on the date hereof or acquired in
accordance with the provisions of Section 10.3; (B) capital contributions,
------------
loans and advances by the Borrower or any Guarantor to any Guarantor; (C)
capital contributions, loans and advances by any Foreign Subsidiary to
CellStar Ireland (or such other global agency treasury center as the
Borrower may establish from time to time); (D) capital contributions by
Fulfillment to CellStar Fulfillment, Ltd.; (E) capital contributions by NAC
to Fulfillment, provided that any and all such capital contributions by NAC
to Fulfillment shall be used by Fulfillment for capital contributions to
CellStar Fulfillment, Ltd.; (F) capital contributions by the Borrower or
any Subsidiary to any other Subsidiary or any Foreign Affiliate (other than
as described in subsections (B) through (E) above) in an aggregate amount
--------------- ---
not to exceed $20,000,000 during any fiscal year; (G) loans and advances by
the Borrower or any Subsidiary to any Foreign Affiliate in an aggregate
amount outstanding at any time not to exceed $10,000,000; and (H) loans and
advances by the Borrower or any Subsidiary to any other Subsidiary (other
than as described in subsections (B) and (C) above) in an aggregate amount
--------------- ---
outstanding at any time not to exceed the greater of $80,000,000 or 20% of
the stockholders' equity in the Borrower, provided that amounts loaned or
advanced by the Borrower or any Subsidiary to any Subsidiary that are in
turn loaned or advanced by that Subsidiary to another Subsidiary shall be
counted only once for purposes of calculations under this subsection (H);
--------------
(j) payroll advances made in the ordinary course of business;
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(k) accounts receivable for sales of inventory in the ordinary
course of business, including sales of inventory to Foreign Subsidiaries
and Foreign Affiliates in the ordinary course of the Companies' business,
whether shipped to the Foreign Subsidiaries or Foreign Affiliates from a
Company or directly from the manufacturer, and payment of ordinary and
customary duties related thereto;
(l) loans and advances made by the Borrower, any Subsidiary or
any Foreign Affiliate to their respective officers and employees in the
ordinary course of business not to exceed $1,500,000 in the aggregate
outstanding at any time;
(m) demand deposits at banks whose deposits are insured by the
Federal Deposit Insurance Corporation, maintained by the Borrower or any
Subsidiary in the ordinary course of business for the purpose of paying
operating expenses;
(n) intercompany receivables existing on the date hereof and
described on Schedule 8.9 hereto; and
------------
(o) investments by Foreign Subsidiaries and Foreign Affiliates
which follow a similar risk profile as the investments described in
subsections (a) through (h) and subsection (m) above.
--------------- --- --------------
Section 10.6. Transactions With Affiliates. The Borrower will not enter
----------------------------
into, or permit any Subsidiary or Foreign Affiliate to enter into, any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate of the Borrower,
such Subsidiary or such Foreign Affiliate, except in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's, such Subsidiary's or
such Foreign Affiliate's business and upon fair and reasonable terms no less
favorable to the Borrower, such Subsidiary or such Foreign Affiliate than would
be obtained in a comparable arm's-length transaction with a Person not an
Affiliate of the Borrower, such Subsidiary or such Foreign Affiliate; provided,
however, that (a) the Companies shall be permitted to enter into transactions,
including without limitation the purchase, sale, or exchange of property or the
rendering of any service, with each other, and such transactions among the
Companies shall not be subject to the restrictions set forth in this Section,
(b) the Borrower and the Subsidiaries shall be permitted to make loans and
advances to each other to the extent otherwise permitted by this Agreement, and
such loans and advances shall not be subject to the restrictions set forth in
this Section and (c) the Borrower or any Subsidiary shall be permitted to sell
that one certain aircraft currently owned by A&S for an amount not less than the
net book value of such aircraft on the date of such sale to Xxxx X. Xxxxxxxxx
pursuant to the terms of an existing option agreement.
Section 10.7. Disposition of Assets. The Borrower will not sell, lease,
---------------------
assign, transfer, or otherwise dispose of any of its assets, or permit any
Subsidiary to do so with any of its assets, except (a) dispositions of inventory
in the ordinary course of business, (b) dispositions of equipment and fixtures
having a fair market value not to exceed $5,000,000 in the aggregate during the
period from the date of this Agreement through the Termination Date, (c)
factoring of accounts receivable of any
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of the Foreign Subsidiaries pursuant to factoring arrangements entered into in
the ordinary course of their respective businesses, (d) sale of the aircraft in
accordance with clause (c) of Section 10.6, and (e) disposition of the stock of
Xxxx Telecom and/or the promissory note payable by Xxxx Telecom in such manner
and for such consideration as the Borrower shall determine. Any disposition
permitted by this Section shall be permitted notwithstanding any covenant to the
contrary contained in any other Loan Document.
Section 10.8. Prepayment of Debt. The Borrower will not prepay or permit
------------------
any Subsidiary to prepay, any Debt, except the Obligations.
Section 10.9. Nature of Business. The Borrower will not, or will not
------------------
permit any Subsidiary to, engage in any business substantially different than
the businesses in which they are engaged as of the date hereof.
Section 10.10. Environmental Protection. The Borrower will not, or will
------------------------
not permit any Subsidiary to, (a) use (or permit any tenant to use) any of their
respective properties or assets for the handling, processing, storage,
transportation, or disposal of any Hazardous Material in violation of any
Environmental Law, (b) generate any Hazardous Material in violation of any
Environmental Law, (c) conduct any activity that causes a release or threatened
release of any Hazardous Material, or (d) otherwise conduct any activity or use
any of their respective properties or assets in any manner that is likely to
violate any Environmental Law or create any Environmental Liabilities for which
the Borrower or any Subsidiary would be responsible.
Section 10.11. Accounting. The Borrower will not, or will not permit any
----------
Subsidiary to, change its fiscal year or make any change (a) in accounting
treatment or reporting practices, except as required by GAAP and disclosed to
the Agent, or (b) in tax reporting treatment, except as required by law and
disclosed to the Agent. Notwithstanding the foregoing, the Borrower shall be
permitted to change its tax year-end or its fiscal year-end, or both, to achieve
coinciding tax and fiscal year ends, provided that the Borrower shall execute
and deliver an amendment to this Agreement to change any covenants and reporting
dates which Agent deems necessary or desirable as a result of such change.
Section 10.12. Restrictive Agreements. Other than this Agreement,
----------------------
Borrower will not, or will not permit any Subsidiary to, directly or indirectly
agree to restrict or condition (a) the payment of any dividends or other
distributions to the Borrower or any Subsidiary; (b) the payment of any Debt
owed to the Borrower or any Subsidiary; (c) the making of any loans or advances
to the Borrower or any Subsidiary; or (d) the transfer of any of its properties
or assets to the Borrower or any Subsidiary.
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ARTICLE XI
Financial Covenants
-------------------
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or the Agent or any Bank has any Commitment
hereunder, the Borrower will observe and perform the following financial
covenants, unless the Required Banks (or the Agent with the consent of the
Required Banks) shall otherwise consent in writing:
Section 11.1. Consolidated Tangible Net Worth. The Borrower will at all
-------------------------------
times maintain or cause to be maintained Consolidated Tangible Net Worth in an
amount not less than the sum of (a) $150,000,000, plus (b) 50% of net income,
after provision for income taxes, of the Borrower and the Subsidiaries on a
consolidated basis (without any deduction for losses), for each fiscal quarter
of the Borrower ended through the date of determination beginning with the
fiscal quarter ending August 31, 1999, plus (c) 100% of the Net Proceeds
received by the Borrower from any issuance, sale or other disposition of any
shares of capital stock or other equity securities of the Borrower of any class
(or any securities convertible or exchangeable for any such shares, or any
rights, warrants, or options to subscribe for or purchase any such shares).
Section 11.2. Consolidated Interest Coverage Ratio. The Borrower will
------------------------------------
maintain or cause to be maintained, as of the end of each fiscal quarter of the
Borrower, an Interest Coverage Ratio of not less than 3.0 to 1.0 for the most
recent four fiscal quarters then ended.
Section 11.3. Companies Interest Coverage Ratio. The Borrower will
---------------------------------
maintain or cause to be maintained, as of the end of each fiscal quarter of the
Borrower, a ratio of (a) the Companies Cash Flow to (b) interest expense of the
Borrower and the Subsidiaries on a consolidated basis of not less than 1.25 to
1.0 for the most recent four quarters then ended. In the event it is determined
(by the most recent quarterly Compliance Certificate or otherwise) that the
Companies Cash Flow is not sufficient to cause compliance with this Section
-------
11.3, then within 10 days after such determination, the Borrower will cause to
----
be transferred to the Companies from the other Subsidiaries cash in an amount
which when added to the Companies Cash Flow is sufficient to cause compliance
with this Section 11.3, and, to the extent they comply with such covenant, the
------------
Companies shall be deemed to have met the requirements of this Section 11.3 for
------------
the relevant period of determination. Notwithstanding anything to the contrary
contained herein, the Companies may not use the transferred cash described in
the preceding sentence to meet the ratio requirements of this Section 11.3 in
------------
more than two consecutive fiscal quarters. Such transferred cash shall remain
with the Companies, notwithstanding any other covenants to the contrary
contained herein, until the Companies have demonstrated compliance with this
Section 11.3 without the benefit of such transferred cash.
------------
Section 11.4. Minimum Turnover Ratio. The Borrower will maintain or
----------------------
cause to be maintained, as of the end of each fiscal quarter of the Borrower, a
ratio of Consolidated Cost of Goods Sold to Consolidated Average Inventory of
not less than 6.0 to 1.0.
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Section 11.5. Consolidated Funded Debt to Consolidated Cash Flow Ratio.
--------------------------------------------------------
The Borrower will maintain or cause to be maintained, as of the end of each
fiscal quarter of the Borrower, a ratio of Consolidated Funded Debt, as of the
end of such quarter, to Consolidated Cash Flow, for the most recent four fiscal
quarters then ended, of not greater than 3.5 to 1.0.
Section 11.6. Consolidated Senior Debt to Consolidated Cash Flow Ratio.
--------------------------------------------------------
The Borrower will maintain, or cause to be maintained, as of each fiscal quarter
of the Borrower, a ratio of Consolidated Senior Debt, as of the end of such
quarter, to Consolidated Cash Flow, for the most recent four fiscal quarters
then ended, of not greater than 2.5 to 1.0.
ARTICLE XII
Default
-------
Section 12.1. Events of Default. Each of the following shall be deemed
-----------------
an "Event of Default":
(a) The Borrower shall fail to pay (i) any installment of
interest on any of the Notes or any fees after the expiration of five days
after the due date thereof, or (ii) any installment of principal on any of
the Notes or any other portion of the Obligations when due.
(b) Any representation or warranty made or deemed made by the
Borrower or any Obligated Party (or any of their respective officers) in
any Loan Document or in any certificate, report, notice, or financial
statement furnished at any time in connection with this Agreement shall be
false, misleading, or erroneous in any material respect when made or deemed
to have been made.
(c) The Borrower or any Obligated Party shall fail to perform,
observe, or comply with any of the covenants contained in Article IX
----------
(except Section 9.1) and such failure continues unremedied for a period of
-----------
15 days after the earlier of (i) the giving of notice to the Borrower by
the Agent or any Bank of such failure, or (ii) the Borrower's actual
knowledge of such failure.
(d) The Borrower or any Obligated Party shall fail to perform,
observe, or comply with any covenant, agreement, or term contained in this
Agreement or any other Loan Document (except those described in subsections
-----------
(a) and (c) of this Section).
--- ---
(e) The Borrower, any Subsidiary, or any Obligated Party shall
commence a voluntary proceeding seeking liquidation, reorganization, or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian, or other similar
official of it or a substantial part of its property or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it or
shall make a general assignment for the benefit of
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creditors or shall generally fail to pay its debts as they become due or
shall take any corporate action to authorize any of the foregoing.
(f) An involuntary proceeding shall be commenced against the
Borrower, any Subsidiary, or any Obligated Party seeking liquidation,
reorganization, or other relief with respect to it or its debts under any
bankruptcy, insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian, or
other similar official for it or a substantial part of its property, and
such involuntary proceeding shall remain undismissed and unstayed for a
period of 60 days.
(g) The Borrower, any Subsidiary, or any Obligated Party shall fail
to discharge within a period of 30 days after the commencement thereof any
attachment, sequestration, or similar proceeding or proceedings involving
an aggregate amount in excess of $1,000,000 against any of their assets or
properties.
(h) A final judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate shall be rendered by a court or courts
against the Borrower, any Subsidiary, or any Obligated Party and the same
shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within 30
days from the date of entry thereof and the Borrower, the relevant
Subsidiary, or the relevant Obligated Party shall not, within said period
of 30 days, or such longer period during which execution of the same shall
have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal.
(i) (i) The Borrower, any Subsidiary, or any Obligated Party shall
fail to pay when due, after any applicable grace periods, any principal of
or interest on any Debt (other than the Obligations), or (ii) the maturity
of any such Debt shall have been accelerated, or (iii) any such Debt shall
have been required to be prepaid prior to the stated maturity thereof, or
(iv) with respect to any such Debt in excess of $5,000,000, the occurrence
of any other default, event of default, or other breach the effect of which
permits any holder or holders under such Debt or any Person acting on
behalf of such holder or holders to accelerate the maturity thereof or
require prepayment thereof, or (v) with respect to any such Debt in excess
of $1,000,000, any holder or holders of such Debt or any Person acting on
behalf of such holder or holders have accelerated the maturity thereof or
require any such prepayment upon the occurrence of a default, event of
default or breach other than a payment default.
(j) This Agreement or any other Loan Document shall cease to be in
full force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by the Borrower,
any Subsidiary, any Obligated Party or any of their respective
shareholders, or the Borrower, any Subsidiary, or any Obligated Party shall
deny that it has any further liability or obligation under any of the Loan
Documents, or any lien or security interest created by the Loan Documents
shall for any reason cease to be a valid, first priority perfected security
interest in and lien upon any of the Collateral purported to be covered
thereby.
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(k) Any of the following events shall occur or exist with
respect to the Borrower, any Guarantor or any ERISA Affiliate: (i) any
Prohibited Transaction involving any Plan; (ii) any Reportable Event with
respect to any Plan; (iii) filing under Section 4041 of ERISA of a notice
of intent to terminate any Plan or the termination of any Plan; (iv) any
event or circumstance that might constitute grounds entitling the PBGC to
institute proceedings under Section 4042 of ERISA for the termination of,
or for the appointment of a trustee to administer, any Plan, or the
institution by the PBGC of any such proceedings; or (v) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or
the reorganization, insolvency, or termination of any Multiemployer Plan;
and in each case above, such event or condition, together with all other
events or conditions, if any, have subjected or could in the reasonable
opinion of the Required Banks subject the Borrower or any Guarantor to any
tax, penalty, or other liability to a Plan, a Multiemployer Plan, the PBGC,
or otherwise (or any combination thereof) which in the aggregate exceed or
could reasonably be expected to exceed $25,000.
(l) Any Change of Control shall occur.
(m) The Borrower, any Subsidiary, or any Obligated Party, or any
of their properties, revenues, or assets, shall become subject to an order
of forfeiture, seizure, or divestiture and the same shall not have been
discharged within 30 days from the date of entry thereof.
(n) Any Material Adverse Effect shall occur.
Section 12.2. Remedies Upon Default. If any Event of Default shall
---------------------
occur and be continuing, the Agent may, with the consent of the Required Banks
(and if directed by the Required Banks, shall), do any one or more of the
following: (a) declare the Obligations or any part thereof to be immediately
due and payable, and the same shall thereupon become immediately due and
payable, without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby expressly
waived by the Borrower, (b) terminate the Commitments without notice to the
Borrower or any Guarantor, (c) reduce any claim to judgment, (d) foreclose or
otherwise enforce any Lien granted to the Agent for the benefit of itself and
the Banks to secure payment and performance of the Obligations, and (e) exercise
any and all rights and remedies afforded by the laws of the State of Texas or
any other jurisdiction, by any of the Loan Documents, by equity, or otherwise;
provided, however, that upon the occurrence of an Event of Default under Section
-------
12.1(e) or Section 12.1(f), the Commitments shall automatically terminate, and
------- ---------------
the Obligations shall become immediately due and payable without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, protest, or other formalities of any
kind, all of which are hereby expressly waived by the Borrower.
Section 12.3. Cash Collateral. If any Event of Default shall occur and
---------------
be continuing, the Borrower agrees to, if requested by the Agent or the Required
Banks, immediately deposit with and pledge to the Agent cash or cash equivalent
investments satisfactory to the Agent in its sole and
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absolute discretion in an amount equal to the outstanding Letter of Credit
Liabilities as security for the Obligations, and the Agent may retain, as
additional Collateral for the payment of the Obligations with respect to the
Letters of Credit, any amounts received upon foreclosure, or in lieu of
foreclosure, through offset, as proceeds of any Collateral or otherwise.
Section 12.4. Performance by the Agent. If the Borrower shall fail to
------------------------
perform any covenant or agreement contained in any of the Loan Documents, the
Agent may perform or attempt to perform such covenant or agreement on behalf of
the Borrower. In such event, the Borrower agrees to, at the request of the
Agent, promptly pay any amount expended by the Agent in connection with such
performance or attempted performance to the Agent, together with interest
thereon at the Default Rate from and including the date of such expenditure to
but excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Agent nor any Bank shall have
any liability or responsibility for the performance of any obligation of the
Borrower under this Agreement or any other Loan Document.
ARTICLE XIII
The Agent
---------
Section 13.1. Appointment, Powers and Immunities. In order to
----------------------------------
expedite the various transactions contemplated by this agreement, the Banks
hereby irrevocably appoint and authorize CBT and Chase to act as their Agent
hereunder and under each of the other Loan Documents. CBT and Chase consent to
such appointment and agrees to perform the duties of the Agent as specified
herein. The Banks authorize and direct the Agent to take such action in their
name and on their behalf under the terms and provisions of the Loan Documents
and to exercise such rights and powers thereunder as are specifically delegated
to or required of the Agent for the Banks, together with such rights and powers
as are reasonably incidental thereto. The Agent is hereby expressly authorized
to act as the Agent on behalf of the Banks:
(a) To receive on behalf of each of the Banks any payment of
principal, interest, fees or other amounts paid pursuant to this Agreement
and the Notes and to distribute to each Bank its pro rata share of all
payments so received as provided in this Agreement;
(b) To receive all documents and items to be furnished under the
Loan Documents;
(c) To act as nominee for and on behalf of the Banks in and under
the Loan Documents;
(d) To arrange for the means whereby the funds of the Banks are
to be made available to the Borrower;
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(e) To distribute to the Banks information, requests, notices,
payments, prepayments, documents and other items received from the
Borrower, the other Obligated Parties, and other Persons;
(f) To execute and deliver to the Borrower, the other Obligated
Parties, and other Persons, all requests, demands, approvals, notices, and
consents received from the Banks;
(g) To the extent permitted by the Loan Documents, to exercise on
behalf of each Bank all rights and remedies of Banks upon the occurrence of
any Event of Default;
(h) To accept, execute, and deliver the Borrower Security
Agreement, the Guarantor Security Agreements, the Pledge Agreements, and
any other security documents as the secured party; and
(i) To take such other actions as may be requested by Required
Banks.
Neither the Agent nor any of its Affiliates, officers, directors,
employees, attorneys, or agents shall be liable for any action taken or omitted
to be taken by any of them hereunder or otherwise in connection with this
Agreement or any of the other Loan Documents except for its or their own gross
negligence or willful misconduct. Without limiting the generality of the
preceding sentence, the Agent (i) may treat the payee of any Note as the holder
thereof until the Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form satisfactory to the Agent; (ii) shall
have no duties or responsibilities except those expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee or fiduciary for any Bank;
(iii) shall not be required to initiate any litigation or collection proceedings
hereunder or under any other Loan Document except to the extent requested by
Required Banks; (iv) shall not be responsible to the Banks for any recitals,
statements, representations or warranties contained in this Agreement or any
other Loan Document, or any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Loan Document, or for the value, validity, effectiveness, enforceability, or
sufficiency of this Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by any Person
to perform any of its obligations hereunder or thereunder; (v) may consult with
legal counsel (including counsel for the Borrower), independent public
accountants, and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants, or experts; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate, or other instrument or writing believed by it to be
genuine and signed or sent by the proper party or parties. As to any matters not
expressly provided for by this Agreement, the Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions signed by Required Banks, and such instructions of Required Banks
and any action taken or failure to act pursuant thereto shall be binding on all
of the Banks; provided, however, that the Agent shall not be required to take
any action which exposes the Agent to personal liability or which is contrary to
this Agreement or any other Loan Document or applicable law.
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Section 13.2. Rights of Agent as a Bank. With respect to its
-------------------------
Commitment, the Advances made by it and the Note issued to it, each of Chase and
CBT shall have the same rights and powers hereunder as any Bank and may exercise
the same as though it were not acting as the Agent. At any time CBT or Chase is
a Bank hereunder, the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. The Agent and its
Affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to, act as trustee under indentures of, provide merchant
banking services to, and generally engage in any kind of business with the
Borrower, any of its Subsidiaries, any other Obligated Party, and any other
Person who may do business with or own securities of the Borrower, any
Subsidiary, or any other Obligated Party, all as if it were not acting as the
Agent and without any duty to account therefor to the Banks.
Section 13.3. Sharing of Payments, Etc. If any Bank shall obtain any
------------------------
payment of any principal of or interest on any Advance made by it under this
Agreement or payment of any other obligation under the Loan Documents then owed
by the Borrower or any other Obligated Party to such Bank, whether voluntary,
involuntary, through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, in excess of its pro rata share,
such Bank shall promptly purchase from the other Banks participations in the
Advances held by them hereunder in such amounts, and make such other adjustments
from time to time as shall be necessary to cause such purchasing Bank to share
the excess payment ratably with each of the other Banks in accordance with its
pro rata portion thereof. To such end, all of the Banks shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if all or any portion of such excess payment is thereafter rescinded or must
otherwise be restored. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any Bank so purchasing a
participation in the Advances made by the other Banks may exercise all rights of
setoff, banker's lien, counterclaim, or similar rights with respect to such
participation as fully as if such Bank were a direct holder of Advances to the
Borrower in the amount of such participation. Nothing contained herein shall
require any Bank to exercise any such right or shall affect the right of any
Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Borrower.
SECTION 13.4. INDEMNIFICATION. THE BANKS HEREBY AGREE TO INDEMNIFY
---------------
THE AGENT FROM AND HOLD THE AGENT HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED
UNDER SECTIONS 14.1 AND 14.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
------------- ----
BORROWER UNDER SECTIONS 14.1 AND 14.2), RATABLY IN ACCORDANCE WITH THEIR
------------- ----
RESPECTIVE COMMITMENTS, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY
BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO
OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE
TAKEN BY THE AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS; PROVIDED,
FURTHER, THAT NO BANK SHALL BE LIABLE FOR ANY PORTION OF THE FOREGOING TO THE
EXTENT CAUSED BY THE AGENT'S GROSS NEGLIGENCE OR WILLFUL
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MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF
THE BANKS THAT THE AGENT SHALL BE INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS
AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS'
FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE AGENT.
WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION, EACH BANK AGREES TO
REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED ON
THE BASIS OF THE BANK'S RESPECTIVE COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET
EXPENSES (INCLUDING ATTORNEYS' FEES) INCURRED BY THE AGENT IN CONNECTION WITH
THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR
ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF,
OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN
DOCUMENTS, TO THE EXTENT THAT THE AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY
THE BORROWER OR ANY OTHER OBLIGATED PARTY.
Section 13.5. Independent Credit Decisions. Each Bank agrees that it
----------------------------
has independently and without reliance on the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and the Guarantors and decision to enter into
this Agreement and that it will, independently and without reliance upon the
Agent or any other Bank, and based upon such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. The Agent shall not be required to keep itself informed as
to the performance or observance by the Borrower or any Obligated Party of this
Agreement or any other Loan Document or to inspect the properties or books of
the Borrower or any Obligated Party. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Agent hereunder or under the other Loan Documents, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other financial
information concerning the affairs, financial condition or business of the
Borrower or any Obligated Party (or any of their Affiliates) which may come into
the possession of the Agent or any of its Affiliates. Without in any way
limiting the foregoing, the Banks each acknowledge and agree that any and all
collateral audits (including the Semiannual Collateral Audits) conducted by the
Agent are for the Agent's benefit only. Although the results of such audits may
be provided to the Banks upon request, the Banks shall not be entitled to rely
on such audits, and the Agent shall have no liability to any of the Banks for
the accuracy, inaccuracy, completeness or incompleteness of such audits, any
information obtained as a result thereof or any conclusions drawn or decisions
made as a result thereof. Each Bank shall have the right to accompany the Agent
and participate in such audits as provided in Section 9.6.
-----------
Section 13.6. Several Commitments. The Commitments and other
-------------------
obligations of the Banks under this Agreement are several. The default by any
Bank in making an Advance in accordance with
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its Commitment shall not relieve the other Banks of their obligations under this
Agreement. In the event of any default by any Bank in making any Advance, each
nondefaulting Bank shall be obligated to make its Advance but shall not be
obligated to advance the amount which the defaulting Bank was required to
advance hereunder. In no event shall any Bank be required to advance an amount
or amounts which shall in the aggregate exceed such Bank's Commitment. No Bank
shall be responsible for any act or omission of any other Bank.
Section 13.7. Successor Agent. Subject to the appointment and
---------------
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Banks and the Borrower, and the Agent may
be removed at any time with or without cause by Required Banks. Upon any such
resignation or removal, Required Banks will have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by Required
Banks and shall have accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation or the Required Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank organized under the laws of
the United States of America or any State thereof and having combined capital
and surplus of at least $100,000,000. Upon the acceptance of its appointment as
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all rights, powers, privileges, immunities, and duties of the
resigning or removed Agent, and the resigning or removed Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. After any Agent's resignation or removal as Agent, the
provisions of this Article XIII shall continue in effect for its benefit in
------------
respect of any actions taken or omitted to be taken by it while it was the
Agent.
ARTICLE XIV
Miscellaneous
-------------
Section 14.1. Expenses. The Borrower agrees to pay on demand: (a) all
--------
reasonable costs and out-of-pocket expenses of the Agent in connection with the
preparation, negotiation, execution, and delivery of this Agreement and the
other Loan Documents and any and all amendments, modifications, renewals,
extensions, and supplements thereof and thereto, including, without limitation,
the reasonable fees and expenses of legal counsel for the Agent, (b) all costs
and out-of-pocket expenses of the Agent and the Banks, or any of them in
connection with any Default and the enforcement of this Agreement or any other
Loan Document, including, without limitation, the reasonable fees and expenses
of legal counsel for the Agent and the Banks, or any of them, (c) all transfer,
stamp, documentary, or other similar taxes, assessments, or charges levied by
any Governmental Authority in respect of this Agreement or any of the other Loan
Documents, (d) all reasonable costs, out-of-pocket expenses, assessments, and
other charges incurred in connection with any filing, registration, recording,
or perfection of any security interest or Lien contemplated by this Agreement or
any other Loan Document, and (e) all other reasonable costs and out-of-pocket
expenses incurred by the Agent in connection with this Agreement or any other
Loan Document, including, without limitation, all fees, costs, out-of-pocket
expenses, and other charges incurred in connection with performing or obtaining
any audit or appraisal in respect of the Collateral.
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Section 14.2. INDEMNIFICATION. THE BORROWER HEREBY AGREES TO INDEMNIFY THE
---------------
AGENT AND EACH BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS, AGENTS, AND PARTICIPANTS FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, INTEREST, EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES), AND AMOUNTS PAID IN SETTLEMENT TO WHICH ANY OF THEM
MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) ANY BREACH BY THE BORROWER OR ANY GUARANTOR OF ANY
REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE
LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL,
REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR
AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWER OR ANY SUBSIDIARY, (E)
THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT, (F) ANY AND ALL TAXES, LEVIES,
DEDUCTIONS, AND CHARGES IMPOSED ON THE AGENT OR ANY BANK OR ANY OF THEIR
RESPECTIVE CORRESPONDENTS IN RESPECT OF ANY LETTER OF CREDIT OR ALTERNATE
CURRENCY ADVANCE, OR (G) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING, RELATING TO ANY OF THE FOREGOING; PROVIDED, HOWEVER THAT NO
PERSON TO BE INDEMNIFIED HEREUNDER SHALL HAVE THE RIGHT TO BE INDEMNIFIED FOR
ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITING ANY PROVISION
OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF
THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL
BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES
(INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR
CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
Section 14.3. Limitation of Liability. None of the Agent, any Bank, or any
-----------------------
Affiliate, officer, director, employee, attorney, or agent thereof shall have
any liability with respect to, and the Borrower hereby waives, releases, and
agrees not to xxx any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by the Borrower in
connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents. The Borrower hereby waives,
releases, and agrees not to xxx the Agent or any Bank or any of their respective
Affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement or
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any of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents.
Section 14.4. No Fiduciary Relationship. The relationship between the
-------------------------
Borrower and the Agent and between the Borrower and each Bank with respect to
the Loan Documents and the transactions governed thereby is solely that of
debtor and creditor, and neither the Agent nor any Bank has any fiduciary or
other special relationship with the Borrower with respect to the Loan Documents
and the transactions governed thereby, and no term or condition of any of the
Loan Documents shall be construed so as to deem the relationship between the
Borrower and the Agent or any Bank with respect to the Loan Documents and the
transactions governed thereby to be other than that of debtor and creditor.
Section 14.5. No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
the Agent or any Bank to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement and the other
Loan Documents are cumulative and not exclusive of any rights and remedies
provided by law.
Section 14.6. Successors and Assigns.
----------------------
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The
Borrower shall not be permitted to assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Agent and
all of the Banks. Any Bank may sell participations to one or more banks or
other institutions in or to all or a portion of its rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of its Commitments, the Advances owing to it
and its share of Letter of Credit Liabilities); provided, however, that (i)
such Bank's obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitment) shall remain unchanged,
(ii) such Bank shall remain solely responsible to the Borrower for the
performance of such obligations, (iii) such Bank shall remain the holder of
its Note for all purposes of this Agreement, (iv) the Borrower shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement and the other Loan
Documents, and (v) such Bank shall not sell a participation that conveys to
the participant the right to vote or give or withhold consents under this
Agreement or any other Loan Document, other than the right to vote upon or
consent to (A) any increase of such Bank's Commitment, (B) any reduction of
the principal amount of, or interest to be paid on, the Advances of such
Bank, (C) any reduction of any commitment fee or other amount payable to
such Bank under any Loan Document, (D) any postponement of any date for the
payment of any amount payable in respect of the Advances of such Bank, or
(E) any material release of Collateral other than releases contemplated in
the Loan Documents as in effect on the date hereof and releases upon full
payment and performance of the Obligations and termination of the
Commitments.
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Such participants shall have no rights under the Loan Documents, other than
certain voting rights as provided above. Subject to the following, each
Bank may obtain (on behalf of its participants) the benefits of Article V
---------
with respect to all participations in its part of the Obligations
outstanding from time to time. If a participant is entitled to the benefits
of Article V or a Bank grants rights to its participants to vote or give or
---------
withhold consents respecting the matters described above, then that Bank
must include a voting mechanism in the relevant participation agreement
whereby a majority of its portion of the Obligations (whether held by it or
participated) shall control the vote for all of that Bank's portion of the
Obligations. Except in the case of the sale of a participating interest to
another Bank, the relevant participation agreement shall prohibit the
participant from transferring, pledging, assigning, selling participations
in, or otherwise encumbering its portion of the Obligations.
(b) The Borrower and each of the Banks agree that any Bank may at any
time assign to one or more Eligible Assignees all, or a proportionate part
of all, of its rights and obligations under this Agreement and the other
Loan Documents (including, without limitation, its Commitment, Advances and
Letter of Credit Liabilities); provided, however, that (i) the Borrower
shall have given its prior written consent to such assignment, such consent
not to be unreasonably withheld, provided that after the occurrence and
during the continuance of a Default no consent of the Borrower shall be
required for any such assignment, (ii) each such assignment shall be of a
consistent, and not a varying, percentage of all of the assigning Bank's
rights and obligations under this Agreement and the other Loan Documents,
(iii) except in the case of an assignment of all of a Bank's rights and
obligations under this Agreement and the other Loan Documents, the amount
of the Commitment of the assigning Bank being assigned pursuant to each
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000, and
the amount of the Commitment of the assigning Bank remaining after each
such assignment shall in no event be less than $5,000,000, and (iv) the
parties to each such assignment shall execute and deliver to the Agent for
its acceptance and recording in the Register (as defined below), an
Assignment and Acceptance, together with the Note subject to such
assignment, and a processing and recordation fee of $3,000. Upon such
execution, delivery, acceptance, and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be at least 10 Business Days after the execution thereof, or, if
so specified in such Assignment and Acceptance, the date of acceptance
thereof by the Agent, (x) the assignee thereunder shall be a party hereto
as a "Bank" and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Bank hereunder and under the Loan Documents and
(y) the Bank that is an assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement and the other Loan Documents (and, in the
case of an Assignment and Acceptance covering all or the remaining portion
of a Bank's rights and obligations under the Loan Documents, such Bank
shall cease to be a party thereto).
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(c) By executing and delivering an Assignment and Acceptance, the
Bank that is an assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning
Bank makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties, or representations made in or in
connection with the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of the Loan Documents or
any other instrument or document furnished pursuant thereto; (ii) such
assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or
any Obligated Party or the performance or observance by the Borrower or any
Obligated Party of its obligations under the Loan Documents; (iii) such
assignee confirms that it has received a copy of the other Loan Documents,
together with copies of the financial statements referred to in Section 8.2
-----------
and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance
upon the Agent or such assignor and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other
Loan Documents; (v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and exercise such powers under the Loan Documents as
are delegated to the Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Bank.
(d) The Administrative Agent may maintain at its Principal Office a
copy of each Assignment and Acceptance delivered to and accepted by it and
a register for the recordation of the names and addresses of the Banks and
the Commitment of, and principal amount of the Advances owing to, each Bank
from time to time (the "Register"). The entries in the Register shall be
--------
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent, and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes under the
Loan Documents. The Register shall be available for inspection by the
Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and assignee representing that it is an Eligible Assignee,
together with any Note subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Exhibit I hereto and all requirements set forth in this Section
---------
have been satisfied, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register, if any, and (iii) give
prompt written notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower shall execute and deliver to
the Agent in exchange for the surrendered Note a new Note payable to the
order of such Eligible Assignee in an amount equal to the Commitment
assumed by it
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pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained a Commitment, a new Note payable to the order of the assigning
Bank in an amount equal to the Commitment retained by it hereunder (each
such promissory note shall constitute a "Note" for purposes of the Loan
Documents). Such new Notes shall be in an aggregate face amount of the
surrendered Note, shall be dated the effective date of such Assignment and
Acceptance, and shall otherwise be in substantially the form of Exhibit A-1
-----------
hereto.
(f) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section, disclose
to the assignee or participant or proposed assignee or participant, subject
to the confidentiality agreements between the Borrower and the Banks, any
information relating to the Borrower, the Subsidiaries or the Foreign
Affiliates furnished to such Bank by or on behalf of the Borrower, the
Subsidiaries or the Foreign Affiliates.
(g) Any Bank may at any time, without the consent of the Borrower or
the Agent, collaterally assign all or any of its rights under the Loan
Documents to a Federal Reserve Bank; provided, however, that no such
assignment shall release the assigning Bank from its obligations
thereunder.
Section 14.7. Survival. All representations and warranties made in this
--------
Agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by the Agent or any Bank or any closing shall affect the
representations and warranties or the right of the Agent or any Bank to rely
upon them. Without prejudice to the survival of any other obligation of the
Borrower hereunder, the obligations of the Borrower under Sections 14.1 and 14.2
------------- ----
shall survive repayment of the Notes and termination of the Commitments and the
Letters of Credit.
Section 14.8. ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND THE OTHER
----------------
LOAN DOCUMENTS REFERRED TO HEREIN REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. This Agreement is given in
amendment, restatement and modification, but not in extinguishment, of the
Existing Agreement.
Section 14.9. Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement, the Notes, or any other Loan Document to which the Borrower is a
party (other than the Engagement Letter), nor any consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same shall be
agreed or consented to in writing by Required Banks (or Agent with the consent
of Required Banks) and the Borrower, and each such waiver, amendment, or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, that no amendment, waiver, or consent shall, unless
in writing and signed by all of the Banks and the Borrower, do any of the
following: (a) increase Commitments of the Banks or subject
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the Banks to any additional obligations; (b) reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder (except
any fees payable to the Agent solely for its account as specified herein or in
the Engagement Letter); (c) postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder
(except any fees payable to the Agent solely for its account as specified herein
or in the Engagement Letter); (d) increase any of the percentages of Eligible
Accounts and Eligible Inventory included in the Borrowing Base, as set forth in
the definition thereof, or any change in the definition of Eligible Accounts or
Eligible Inventory that results in an increase in the assets or values of assets
included in the Borrowing Base; (e) waive any of the conditions specified in
Article VII; (f) change the percentage of the Total Commitment Amount or of the
-----------
aggregate unpaid principal amount of the Notes or the number of Banks which
shall be required for the Banks or any of them to take any action under this
Agreement; (g) change any provision contained in this Section 14.9; (h) release
------------
any Collateral or any Guarantor, except for releases of Collateral in connection
with dispositions of assets expressly permitted by this Agreement and releases
of stock and Guaranties of Subsidiaries in connection with dissolutions,
liquidations or mergers expressly permitted by this Agreement or (i) extend the
Alternate Advance Rate Availability Period beyond July 31, 2000; provided,
further, that any election to terminate the Alternate Advance Rate Availability
Period earlier than July 31, 2000, as provided in the definition of "Alternate
Advance Rate Availability Period," shall be effective if approved by two or more
Banks. Notwithstanding anything to the contrary contained in this Section, no
amendment, waiver, or consent shall be made with respect to Article XIII hereof
------------
without the prior written consent of the Agent.
Section 14.10. Maximum Interest Rate. No provision of this Agreement or any
---------------------
other Loan Document shall require the payment or the collection of interest in
excess of the maximum amount permitted by applicable law. If any excess of
interest in such respect is hereby provided for, or shall be adjudicated to be
so provided, in any Loan Document or otherwise in connection with this loan
transaction, the provisions of this Section shall govern and prevail and neither
the Borrower nor the sureties, guarantors, successors, or assigns of the
Borrower shall be obligated to pay the excess amount of such interest or any
other excess sum paid for the use, forbearance, or detention of sums loaned
pursuant hereto. In the event the Agent or any Bank ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of the
maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the indebtedness; and, if the principal has been
paid in full, any remaining excess shall forthwith be paid to the Borrower. In
determining whether or not the interest paid or payable exceeds the Maximum
Rate, the Borrower, the Agent and each Bank shall, to the extent permitted by
applicable law, (a) characterize any non-principal payment as an expense, fee,
or premium rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the entire contemplated
term of the indebtedness evidenced by the Notes so that interest for the entire
term does not exceed the Maximum Rate.
Section 14.11. Notices. All notices and other communications provided for
-------
in this Agreement and the other Loan Documents shall be given in writing and
telecopied, mailed by certified mail return receipt requested, or delivered to
the intended recipient at the "Address for Notices"
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specified below its name on the signature pages hereof; or, as to any party at
such other address as shall be designated by such party in a notice to the other
party given in accordance with this Section. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly given
when transmitted by telecopy, subject to telephone confirmation of receipt, or
when personally delivered or, in the case of a mailed notice, when duly
deposited in the mails, in each case given or addressed as aforesaid; provided,
however, notices to the Agent pursuant to Article II and Article III shall not
---------- -----------
be effective until received by the Agent.
Section 14.12. GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
----------------------------------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT
HAS BEEN ENTERED INTO IN DALLAS COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR
ALL PURPOSES IN DALLAS COUNTY, TEXAS. ANY ACTION OR PROCEEDING AGAINST THE
BORROWER UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT IN DALLAS COUNTY, TEXAS. THE BORROWER HEREBY
IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B)
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN
INCONVENIENT FORUM. THE BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS
SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 14.11.
-------------
NOTHING HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS SHALL AFFECT THE RIGHT OF
THE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF THE AGENT OR ANY BANK TO BRING ANY ACTION OR PROCEEDING
AGAINST THE BORROWER OR WITH RESPECT TO ANY OF ITS RESPECTIVE PROPERTY IN COURTS
IN OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY THE BORROWER AGAINST THE
AGENT OR ANY BANK SHALL BE BROUGHT ONLY IN A COURT LOCATED IN DALLAS COUNTY,
TEXAS.
Section 14.13. Hedging Obligations.
-------------------
(a) The term "Debt," as defined and used in this Agreement, does not
include Hedging Obligations of the Borrower or any Subsidiary or guaranties
of Hedging Obligations of the Borrower or any Subsidiary. Accordingly, the
Borrower and the Subsidiaries are permitted to incur Hedging Obligations to
any Person; provided, however, that the Borrower will not, and will not
permit any of its Subsidiaries to, incur any Hedging Obligations except
pursuant to agreements or arrangements entered into in the ordinary course
of business to hedge or mitigate risks to which the Borrower or any
Subsidiary is exposed in the conduct of its business or the management of
its liabilities.
(b) The term "Obligations," as defined and used in this Agreement,
includes all Hedging Obligations of the Borrower or any Subsidiary to the
Agent, CBT, Chase or any
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other Bank. Accordingly, all such Hedging Obligations are secured by the
Collateral and guaranteed by the Guarantors pursuant to the Guaranties.
(c) The Borrower hereby irrevocably and unconditionally guarantees to
each of the Agent, CBT, Chase, the other Banks and their respective
affiliates and branches (each an "Obligee" and, collectively, the
-------
"Obligees"), the full and prompt payment and performance of any and all
--------
Hedging Obligations of each Subsidiary to each Obligee (all such Hedging
Obligations being hereinafter referred to as the "Guaranteed Obligations").
----------------------
Such guaranty shall be an absolute, continuing, irrevocable, and
unconditional guaranty of payment and performance, and not a guaranty of
collection, and the Borrower shall remain liable on its obligations
hereunder until the payment and performance in full of the Guaranteed
Obligations. No set-off, counterclaim, recoupment, reduction, or diminution
of any obligation, or any defense of any kind or nature which the Borrower
or any Subsidiary may have against any Obligee or any other party shall be
available to, or shall be asserted by, the Borrower against any Obligee or
any subsequent holder of the Guaranteed Obligations or any part thereof or
against payment of the Guaranteed Obligations or any part thereof.
(d) If the Borrower becomes liable for any obligations or
indebtedness owing by any Subsidiary to any Obligee by endorsement or
otherwise, other than under this Section, such liability shall not be in
any manner impaired or affected hereby, and the rights of each Obligee
shall be cumulative of any and all other rights that any Obligee may ever
have against the Borrower.
(e) In the event of default by any Subsidiary in payment or
performance of any of the Guaranteed Obligations, or any part thereof, when
any part of the Guaranteed Obligations becomes due, whether by its terms,
by acceleration, upon demand or otherwise, the Borrower shall promptly pay
the amount due thereon to the applicable Obligee without notice or demand
in Dollars and it shall not be necessary for any Obligee, in order to
enforce such payment by the Borrower, first to institute suit or exhaust
its remedies against any Subsidiary or others liable on such Guaranteed
Obligations, or to enforce any rights against any collateral which shall
ever have been given to secure such Guaranteed Obligations. Notwithstanding
anything to the contrary contained in this Section, the Borrower hereby
irrevocably subordinates to the prior and defeasible payment in full of the
Guaranteed Obligations, any and all rights the Borrower may now or
hereafter have under any agreement or at law or in equity (including,
without limitation, any law subrogating the Borrower to the rights of any
of the Obligees) to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from any Subsidiary or
any other party liable for payment of any or all of the Guaranteed
Obligations for any payment made by the Borrower under or in connection
with this Section or otherwise.
(f) The Borrower hereby agrees that its obligations under this
Section shall not be released, discharged, diminished, impaired, reduced,
or affected for any reason or by the occurrence of any event, including,
without limitation, one or more of the following events, whether or not
with notice to or the consent of the Borrower: (i) the taking or accepting
of
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collateral as security for any or all of the Guaranteed Obligations or the
release, surrender, exchange, or subordination of any collateral now or
hereafter securing any or all of the Guaranteed Obligations; (ii) any
partial release of the liability of the Borrower hereunder, or the full or
partial release of any other guarantor from liability for any or all of the
Guaranteed Obligations; (iii) any disability of the Borrower or any
Subsidiary, or the dissolution, insolvency, or bankruptcy of the Borrower,
any Subsidiary, any guarantor or any other party at any time liable for the
payment of any or all of the Guaranteed Obligations; (iv) any renewal,
extension, modification, waiver, amendment, or rearrangement of any or all
of the Guaranteed Obligations or any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Obligations; (v) any adjustment, indulgence, forbearance, waiver, or
compromise that may be granted or given by any Obligee to the Borrower, any
Subsidiary or any other party ever liable for any or all of the Guaranteed
Obligations; (vi) any neglect, delay, omission, failure, or refusal of any
Obligee to take or prosecute any action for the collection of any of the
Guaranteed Obligations or to foreclose or take or prosecute any action in
connection with any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Guaranteed
Obligations; (vii) the unenforceability or invalidity of any or all of the
Guaranteed Obligations or of any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Obligations; (viii) any payment by any Subsidiary or any other party to any
Obligee is held to constitute a preference under applicable bankruptcy or
insolvency law or if for any other reason any Obligee is required to refund
any payment or pay the amount thereof to someone else; (ix) the settlement
or compromise of any of the Guaranteed Obligations; (x) the non-perfection
of any security interest or lien securing any or all of the Guaranteed
Obligations; (xi) any impairment of any collateral securing any or all of
the Guaranteed Obligations; (xii) the failure of any Obligee to sell any
collateral securing any or all of the Guaranteed Obligations in a
commercially reasonable manner or as otherwise required by law; (xiii) any
change in the corporate existence, structure, or ownership of the Borrower
or any Subsidiary; or (xiv) any other circumstance which might otherwise
constitute a defense available to, or discharge of, the Borrower or any
Subsidiary.
(g) The Borrower hereby waives promptness, diligence, notice of any
default under the Guaranteed Obligations, demand of payment, notice of
acceptance of this guaranty, presentment, notice of protest, notice of
dishonor, notice of the incurring by any Subsidiary of additional
obligations or indebtedness, and all other notices and demands with respect
to the Guaranteed Obligations and this guaranty.
Section 14.14. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 14.15. Severability. Any provision of this Agreement held by a
------------
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
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Section 14.16. Headings. The headings, captions, and arrangements used in
--------
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 14.17. Non-Application of Chapter 346 of Texas Finance Code. The
----------------------------------------------------
provisions of Chapter 346 of the Texas Finance Code (Vernon's Texas Civil
Statutes) are specifically declared by the parties hereto not to be applicable
to this Agreement or any of the other Loan Documents or to the transactions
contemplated hereby.
Section 14.18. Construction. The Borrower, the Agent and each Bank
------------
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the parties
hereto.
Section 14.19. Independence of Covenants. All covenants hereunder shall be
-------------------------
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 14.20. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
--------------------
APPLICABLE LAW, THE BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT
OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
-89-
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
BORROWER:
--------
CELLSTAR CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
President and Chief Operating Officer
Address for Notices:
Address: 0000 Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: General Counsel
-90-
AGENTS AND BANKS:
----------------
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION (formerly known as
Texas Commerce Bank National
Association), as Administrative Agent and as
a Bank
Commitment By: /s/ Xxxxx X. Xxxx
---------- ------------------------------
Xxxxx X. Xxxx
Vice President
$25,000,000 (including a
$5,000,000 Swing Line Commitment)
Address for Notices:
Address: 0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxx
With Copies of Advance Requests To:
The Chase Manhattan Bank
Agency Services
One Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
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THE FIRST NATIONAL BANK OF CHICAGO,
as Syndication Agent and a Bank
Commitment By: /s/ X. Xxxxxx
---------- ---------------------------------
$25,000,000 Name: X. Xxxxxx
--------------------------
Title: Managing Director
--------------------------
Address for Notices:
Address: 0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxxxx
-00-
XXXXXXXX XXXX XXXX,
as Documentation Agent and a Bank
Commitment By: /s/ Xxx Xxxxxxx
---------- ---------------------------------
$25,000,000 Name: Xxx Xxxxxxx
---------------------------
Title: Vice President
--------------------------
Address for Notices:
Address: 000 Xxxxx 0xx Xxxxxx,
00-X 08 J
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000 or
(000) 000-0000
Attention: Xxxxxx X. Xxxxxx/Xxx Xxxxxxx
-00-
XXX XXXXX XXXXXXXXX BANK,
as Alternate Currency Agent and as a Bank
Commitment By: /s/ Xxxx X. Xxxxxx
---------- ---------------------------------
Name: Xxxx X. Xxxxxx
Alternate Currency portion of ---------------------------
CBT Commitment Title: Vice President
--------------------------
Address for Notices to Chase as a Bank:
Address: _______________________
_______________________
Fax No.: _______________________
Telephone No.: _______________________
Attention: _______________________
Address for Notices to Chase as
Alternate Currency Agent:
Address: c/o Chase Manhattan
International Limited
0 Xxxxxx Xxxxx Xxxxxx
Xxxxxx, X0 0XX, Xxxxxx Xxxxxxx
Fax No.: 00-000-000-0000/2085
Telephone No.: 00-000-000-0000/2353
Attention: Xxxxx Xxxxxxx/Xxxxx Xxxxxx
-94-
CREDIT LYONNAIS NEW YORK BRANCH
Commitment By: /s/ Xxxxxx Xxxxxxxxx
---------- ---------------------------------
Name: Xxxxxx Xxxxxxxxx
$20,000,000 ---------------------------
Title: Senior Vice President
--------------------------
Address for Notices:
Address: 0000 Xxxx Xxxxxx, Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx Xxxxx
-95-
XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
Commitment By: /s/ XXXXX X. XXXXXX
---------- ---------------------------------
Name: Xxxxx X. Xxxxxx
$20,000,000 ---------------------------
Title: Vice President
---------------------------
Address for Notices:
Address: 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxxxx
-00-
XXXXXXX X-0
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Form of Revolving Credit Note
-----------------------------
REVOLVING CREDIT NOTE
---------------------
$__________________ Dallas, Texas August 2, 1999
FOR VALUE RECEIVED, the undersigned, CELLSTAR CORPORATION, a Delaware
corporation ("Maker"), hereby promises to pay to the order of _________________
-----
("Payee"), at the offices of Chase Bank of Texas, National Association (formerly
-----
known as Texas Commerce Bank National Association), as administrative agent
(together with any successor as provided in the Agreement, hereinbelow defined,
the "Administrative Agent"), at 0000 Xxxxxx Xx., 0xx Xxxxx, XX00, Xxxxxxx, Xxxxx
--------------------
77002, on the dates hereinafter specified, in lawful money of the United States
of America, the principal sum of _________________________ ($_____________) or
so much thereof as may be advanced and outstanding hereunder, together with
interest as hereinafter specified; provided however that Alternate Currency
Advances shall be payable to The Chase Manhattan Bank, as alternate currency
agent (together with any successor as provided in the Agreement, the "Alternate
---------
Currency Agent"), in accordance with the Credit Agreement.
--------------
This Note is one of the Revolving Credit Notes referred to in that certain
Amended and Restated Credit Agreement dated as of August 2, 1999, among Maker,
Payee, Administrative Agent, Alternate Currency Agent, The First National Bank
of Chicago, as syndication agent, National City Bank, as documentation agent,
and each of the other banks or lending institutions which is or may from time to
time become a signatory thereto and any successors or permitted assigns thereof
(as the same may be amended, modified, or supplemented from time to time, being
referred to herein as the "Agreement"). Capitalized terms used and not otherwise
---------
defined in this Note have the respective meanings specified in the Agreement.
The Agreement, among other things, contains provisions for acceleration of
the maturity of this Note upon the happening of certain stated events and also
for prepayments of Advances prior to the maturity of this Note upon the terms
and conditions specified in the Agreement.
This Note evidences Advances made by the Agent and the Banks to Maker under
the Agreement. In addition, as provided in Section 3.4 of the Agreement, each
payment made by Agent pursuant to a drawing under a Letter of Credit shall
constitute and be deemed an Advance by the Banks to Maker, including an Advance
by Payee to Maker under this Note, in accordance with the terms of the
Agreement. Maker may borrow, repay and reborrow hereunder upon the terms and
conditions specified in the Agreement.
The outstanding principal balance hereof shall bear interest at a varying
rate per annum which shall from day to day be equal to the lesser of (a) the
Maximum Rate, or (b) the Applicable Rate, each such change in the rate of
interest charged hereunder to become effective, without notice to Maker, on the
effective date of each change in the Applicable Rate or the Maximum Rate, as the
case may be; provided, however, if at any time the Applicable Rate shall exceed
-------- -------
the Maximum Rate, thereby causing the interest rate hereon to be limited to the
Maximum Rate, then any subsequent
REVOLVING CREDIT NOTE - Page 1
reduction in the Applicable Rate shall not reduce the rate of interest hereon
below the Maximum Rate until the total amount of interest accrued hereon equals
the amount of interest which would have accrued hereon if the Applicable Rate
had at all times been in effect.
Accrued and unpaid interest on this Note shall be due and payable on the
dates specified in Section 2.5 of the Agreement. All principal of this Note
-----------
shall be due and payable on the Termination Date. All past due principal and
interest shall bear interest at the Default Rate. Interest payable at the
Default Rate shall be payable from time to time on demand.
Interest on the Eurodollar Advances and Alternate Currency Advances shall
be computed on the basis of a year of 360 days and the actual number of days
elapsed; provided that, in the case of Advances denominated in any Alternate
Currency in respect of which the Agent has determined that a 365-day basis is
standard market practice in the applicable interbank market, interest shall be
calculated on the basis of a year of 365 days and the actual number of days
elapsed. Interest on the Floating Rate Advances shall be computed on the basis
of a year of 360 days and the actual number of days elapsed at all times when
the Alternate Base Rate is based on the Federal Funds Effective Rate and a year
of 365 or 366 days, as the case may be, and the actual number of days elapsed at
all times when the Alternate Base Rate is the Prime Rate.
Notwithstanding anything to the contrary contained herein, no provisions of
this Note shall require the payment or permit the collection of interest in
excess of the Maximum Rate. If any excess of interest in such respect is herein
provided for, or shall be adjudicated to be so provided, in this Note or
otherwise in connection with this loan transaction, the provisions of this
paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by any
court of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this Note; and, if
the principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Maker. In determining whether or not the interest paid or
payable exceeds the Maximum Rate, Maker and Payee shall, to the extent permitted
by applicable law, (i) characterize any non-principal payment as an expense,
fee, or premium rather than as interest, (ii) exclude voluntary prepayments and
the effects thereof, and (iii) amortize, prorate, allocate, and spread in equal
or unequal parts the total amount of interest throughout the entire contemplated
term of the indebtedness evidenced by this Note so that the interest for the
entire term does not exceed the Maximum Rate.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS
NOTE IS PERFORMABLE IN DALLAS COUNTY, TEXAS.
Maker and each surety, guarantor, endorser, and other party ever liable for
payment of any sums of money payable on this Note jointly and severally waive
notice, presentment, demand for payment, protest, notice of protest and non-
payment or dishonor, notice of acceleration, notice of
REVOLVING CREDIT NOTE - Page 2
intent to accelerate, notice of intent to demand, diligence in collecting,
grace, and all other formalities of any kind, except any notice and grace
periods provided in the Agreement, and consent to all extensions without notice
for any period or periods of time and partial payments, before or after
maturity, and any impairment of any Collateral securing this Note, all without
prejudice to the holder. The holder shall similarly have the right to deal in
any way, at any time, with one or more of the foregoing parties without notice
to any other party, and to grant any such party any extensions of time for
payment of any of said indebtedness, or to release or substitute part or all of
the Collateral securing this Note, or to grant any other indulgences or
forbearances whatsoever, without notice to any other party and without in any
way affecting the personal liability of any party hereunder.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this Note or any continuation thereof or to record in its internal
records all advances made to Maker hereunder and all payments made on account of
the principal thereof, which endorsements or records shall be prima facie
evidence as to the outstanding principal amount of this Note; provided, however,
any failure by the holder hereof to make any endorsement or record shall not
limit or otherwise affect the obligations of Maker under the Agreement or this
Note.
This Note is given in amendment, restatement and modification (but not in
extinguishment or novation) of the indebtedness evidenced by that certain
Revolving Credit Note dated October 15, 1997 in the original principal amount of
$_________, executed by Maker and payable to the order of Payee.
CELLSTAR CORPORATION
By:________________________________
Name:
Title:
REVOLVING CREDIT NOTE - Page 3
Schedule
DATE ADVANCE PRINCIPAL PAYMENT BALANCE
-------- ----------- ----------------- ---------
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
EXHIBIT A-2
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Form of Swing Line Note
-----------------------
SWING LINE NOTE
---------------
$5,000,000.00 Dallas, Texas August 2, 1999
FOR VALUE RECEIVED, the undersigned, CELLSTAR CORPORATION, a Delaware
corporation ("Maker"), hereby promises to pay to the order of CHASE BANK OF
-----
TEXAS, NATIONAL ASSOCIATION (formerly known as Texas Commerce Bank National
Association) ("Payee"), at its offices at 0000 Xxxxxx Xx., 0xx Xxxxx, XX00,
-----
Xxxxxxx, Xxxxx 00000, on the dates hereinafter specified, in lawful money of the
United States of America, the principal sum of FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) or so much thereof as may be advanced and outstanding hereunder,
together with interest as hereinafter specified.
This Note is the Swing Line Note referred to in that certain Amended and
Restated Credit Agreement dated as of August 2, 1999, among Maker, Payee, The
First National Bank of Chicago, as syndication agent, National City Bank, as
documentation agent, Chase Bank of Texas, National Association, as
administrative agent, The Chase Manhattan Bank, as alternate currency agent, and
each of the other banks or lending institutions which is or may from time to
time become a signatory thereto and any successors or permitted assigns thereof
(as the same may be amended, modified, or supplemented from time to time, being
referred to herein as the "Agreement"). Capitalized terms used and not
---------
otherwise defined in this Note have the respective meanings specified in the
Agreement.
The Agreement, among other things, contains provisions for acceleration of
the maturity of this Note upon the happening of certain stated events and also
for prepayments of Advances prior to the maturity of this Note upon the terms
and conditions specified in the Agreement.
This Note evidences Swing Line Advances made by the Payee to Maker under
the Agreement. Maker may borrow, repay and reborrow hereunder upon the terms and
conditions specified in the Agreement.
The outstanding principal balance hereof shall bear interest at a varying
rate per annum which shall from day to day be equal to the lesser of (a) the
Maximum Rate, or (b) the Applicable Rate for Floating Rate Advances, each such
change in the rate of interest charged hereunder to become effective, without
notice to Maker, on the effective date of each change in such Applicable Rate or
the Maximum Rate, as the case may be; provided, however, if at any time such
-------- -------
Applicable Rate shall exceed the Maximum Rate, thereby causing the interest rate
hereon to be limited to the Maximum Rate, then any subsequent reduction in such
Applicable Rate shall not reduce the rate of interest hereon below the Maximum
Rate until the total amount of interest accrued hereon equals the amount of
interest which would have accrued hereon if such Applicable Rate had at all
times been in effect.
Accrued and unpaid interest on this Note shall be due and payable on the
dates specified in Section 2.5 of the Agreement. All principal of this Note
-----------
shall be due and payable on the Termination
REVOLVING CREDIT NOTE - Page 1
Date. All past due principal and interest shall bear interest at the Default
Rate. Interest payable at the Default Rate shall be payable from time to time on
demand.
Interest on the Floating Rate Advances shall be computed on the basis of a
year of 360 days and the actual number of days elapsed at all times when the
Alternate Base Rate is based on the Federal Funds Effective Rate and a year of
365 or 366 days, as the case may be, and the actual number of days elapsed at
all times when the Alternate Base Rate is the Prime Rate.
Notwithstanding anything to the contrary contained herein, no provisions of
this Note shall require the payment or permit the collection of interest in
excess of the Maximum Rate. If any excess of interest in such respect is herein
provided for, or shall be adjudicated to be so provided, in this Note or
otherwise in connection with this loan transaction, the provisions of this
paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by any
court of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this Note; and, if
the principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Maker. In determining whether or not the interest paid or
payable exceeds the Maximum Rate, Maker and Payee shall, to the extent permitted
by applicable law, (i) characterize any non-principal payment as an expense,
fee, or premium rather than as interest, (ii) exclude voluntary prepayments and
the effects thereof, and (iii) amortize, prorate, allocate, and spread in equal
or unequal parts the total amount of interest throughout the entire contemplated
term of the indebtedness evidenced by this Note so that the interest for the
entire term does not exceed the Maximum Rate.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS
NOTE IS PERFORMABLE IN DALLAS COUNTY, TEXAS.
Maker and each surety, guarantor, endorser, and other party ever liable for
payment of any sums of money payable on this Note jointly and severally waive
notice, presentment, demand for payment, protest, notice of protest and non-
payment or dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, diligence in collecting, grace, and all other
formalities of any kind, except any notice and grace periods provided in the
Agreement, and consent to all extensions without notice for any period or
periods of time and partial payments, before or after maturity, and any
impairment of any Collateral securing this Note, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way, at any
time, with one or more of the foregoing parties without notice to any other
party, and to grant any such party any extensions of time for payment of any of
said indebtedness, or to release or substitute part or all of the Collateral
securing this Note, or to grant any other indulgences or forbearances
whatsoever, without notice to any other party and without in any way affecting
the personal liability of any party hereunder.
REVOLVING CREDIT NOTE - Page 2
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this Note or any continuation thereof or to record in its internal
records all advances made to Maker hereunder and all payments made on account of
the principal thereof, which endorsements or records shall be prima facie
evidence as to the outstanding principal amount of this Note; provided, however,
any failure by the holder hereof to make any endorsement or record shall not
limit or otherwise affect the obligations of Maker under the Agreement or this
Note.
This Note is given in amendment, restatement and modification (but not in
extinguishment or novation) of the indebtedness evidenced by that certain
Revolving Credit Note dated October 15, 1997 in the original principal amount of
$25,000,000.00, executed by Maker and payable to the order of Payee.
CELLSTAR CORPORATION
By:______________________________
Name:_________________________
Title:________________________
REVOLVING CREDIT NOTE - Page 3
Schedule
DATE ADVANCE PRINCIPAL PAYMENT BALANCE
-------- ----------- ----------------- ---------
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
________ ___________ _________________ _________
EXHIBIT B
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Advance Request Form
--------------------
ADVANCE REQUEST FORM
--------------------
TO: Chase Bank of Texas, National Association, as Administrative Agent
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx
The Chase Manhattan Bank,
as Alternate Currency Agent/1/
Only for Alternate Currency Advances
c/o Chase Manhattan International Limited
0 Xxxxxx Xxxxx Xxxxxx
Xxxxxx, X0 0XX, Xxxxxx Xxxxxxx
Attention: Xxxxx Xxxxxxx/Xxxxx Xxxxxx
Ladies and Gentlemen:
The undersigned is an officer of CELLSTAR CORPORATION, a Delaware
corporation (the "Borrower"), and is authorized to make and deliver this
--------
certificate pursuant to that certain Amended and Restated Credit Agreement dated
as of August 2, 1999 (as the same may be amended, supplemented or modified from
time to time, being hereinafter referred to as the "Credit Agreement"), among
----------------
the Borrower, each of the banks or other lending institutions which is or may
from time to time become a signatory thereto and any successors or permitted
assignees thereof, The First National Bank of Chicago, as syndication agent,
National City Bank, as documentation agent, Chase Bank of Texas, National
Association, a national banking association, as administrative agent for itself
and the other Banks, as issuer of Letters of Credit thereunder, and as the swing
line lender (the "Administrative Agent"), and The Chase Manhattan Bank, as
--------------------
alternate currency agent (in such capacity, together with its successors in such
capacity, the "Alternate Currency Agent"). All terms defined in the Credit
------------------------
Agreement shall have the same meaning herein.
In accordance with the Credit Agreement, the Borrower hereby (check
whichever is applicable):
___ 1. Requests that the Banks make an Advance (the "Requested Advance"), in
-----------------
the amount set forth in item (i) below, of the following Type (check
whichever is applicable):
___ Floating Rate Advance
___ Eurodollar Advance having an Interest Period of (check
whichever is applicable):
___ one month
___ two months
___ three months
_____________________________
/1/ Only for Alternate Currency Advances
ADVANCE REQUEST FORM -Page 1
___ Alternate Currency Advance
a. In _________________ (type of Alternate Currency)
b. Having an Interest Period of (check whichever is
applicable):
___ one month
___ two months
___ three months
___ Swing Line Advance/2/
___ 2. Requests that the Banks Convert a Floating Rate Advance/3/ into a
Eurodollar Advance in the amount of $__________, having an Interest
Period of (check whichever is applicable):
___ one month
___ two months
___ three months
___ 3. Request that the Banks Convert a Floating Rate Advance/3/ into an
Alternate Currency Advance in the Equivalent Amount of
$_______________.
a. Having an Interest Period of (check whichever is applicable):
___ one month
___ two months
___ three months
b. In ____________________ (type of Alternate Currency)
___ 4. Requests that the Banks Convert a Eurodollar Advance into a Floating
Rate Advance in the amount of $__________.
___ 5. Request that the Banks Convert a Eurodollar Advance into an Alternate
Currency Advance in the Equivalent Amount of $______________.
a. Having an Interest Period of (check whichever is applicable):
___ one month
___ two months
___ three months
b. In ____________________ (type of Alternate Currency)
___ 6. Request that the Banks Convert an Alternate Currency Advance in
_______________ (type of Alternative Currency) into a Floating Rate
Advance in the amount of $_______________.
___ 7. Request that the Banks Convert an Alternate Currency Advance in
________________ (type of Alternate Currency) into a Eurodollar
Advance in the amount of $_____________, having an Interest Period of
(check whichever is applicable):
_________________
/2/ Swing Line Advances must be Floating Rate Advances
/3/ Swing Line Advances may not be converted into Eurodollar Advances or
Alternate Currency Advances
ADVANCE REQUEST FORM - Page 2
___ one month
___ two months
___ three months
___ 8. Requests that the Banks Continue a Eurodollar Advance in the amount of
$__________, having an Interest Period of (check whichever is
applicable):
___ one month
___ two months
___ three months
___ 9. Requests that the Banks Continue an Alternate Currency Advance in the
Equivalent Amount of $___________:
a. Having an Interest Period of (check whichever is applicable):
___ one month
___ two months
___ three months
b. In _____________________ (type of Alternate Currency)
The Borrower hereby requests and instructs the Agent to make the Requested
Advance available to Borrower by (check whichever is applicable):
___ depositing the same in the following account maintained with Agent:
_____________________________________________________________________
_____________________________________________________________________
___ wire transfer in accordance with the following wiring instructions:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
In connection with the foregoing and pursuant to the terms and provisions
of the Credit Agreement, the undersigned hereby certifies that the following
statements are true and correct:
(i) The representations and warranties contained in Article VIII of
the Credit Agreement and in each of the other Loan Documents are true and
correct on and as of the date hereof with the same force and effect as if
made on and as of such date.
(ii) No Default has occurred and is continuing or would result from
the Requested Advance.
(iii) The amount of the Requested Advance, when added to all
outstanding Advances and Letter of Credit Liabilities, will not exceed the
lesser of the Borrowing Base or the amount of the Commitments.
(iv) If the Requested Advance is an Alternate Currency Advance, the
amount of such Requested Advance when added to all outstanding Alternate
Currency Advances, will not exceed the Equivalent Amount of $25,000,000.
(v) If the Requested Advance is a Swing Line Advance, the amount of
such Requested Advance, when added to all outstanding Swing Line Advances,
will not exceed the Swing Line Commitment.
(vi) Each Company has adequate capital to conduct its business as a
going concern, as now conducted and as proposed to be conducted, each
Company will be able to meet its obligations under the Loan Documents and
in respect of its other existing and future indebtedness and liabilities as
and when the same
ADVANCE REQUEST FORM - Page 3
shall be due and payable, and each Company is not insolvent (as that term
is defined in 11 U.S.C. (S) 101 or applicable law) and will not be rendered
insolvent by the Requested Advance, and the foregoing statements are
supported by the Companies' internal projections and forecasts.
(vii) All information supplied below is true, correct, and complete as
of the date hereof.
Information
-----------
(a) Outstanding principal amount of Advances............................. $____________
(b) Outstanding Letter of Credit Liabilities............................. $____________
(c) Borrowing Base....................................................... $____________
(d) The amount of the Commitments minus the sum of line (a) plus
line (b)............................................................. $____________
(e) The Borrowing Base minus the sum of line (a) plus line (b)........... $____________
(f) Net availability for Advances: [lesser of line (d) or line (e)]...... $____________
(g) Outstanding principal amount of Swing Line Advances.................. $____________
(h) Outstanding principal amount of Alternate Currency Advances.......... $____________
(i) Amount of Requested Advance/4/....................................... $____________
BORROWER:
--------
CELLSTAR CORPORATION
By:___________________________________
Name:______________________________
Title:_____________________________
Dated as of:___________________
[insert date of
Requested Advance]
cc: The Chase Manhattan Bank
Agency Services
One Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
_______________________
/4/ Each Advance (excluding Swing Line Advances) shall be in a minimum
principal amount of $1,000,000 or such greater amount which is an integral
multiple of $100,000. Each Swing Line Advance shall be in a minimum
principal amount of $100,000. The aggregate principal amount of Eurodollar
Advances having the same Interest Period shall be at least equal to
$1,000,000. The aggregate principal amount of Alternate Currency Advances
having the same Interest Period shall be at least equal to $1,000,000.
ADVANCE REQUEST FORM - Page 4
EXHIBIT C
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Letter of Credit Request Form
-----------------------------
LETTER OF CREDIT REQUEST FORM
-----------------------------
TO: Chase Bank of Texas, National Association, as Administrative Agent
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx
Ladies and Gentlemen:
The undersigned is an officer of CELLSTAR CORPORATION, a Delaware
corporation (the "Borrower"), and is authorized to make and deliver this
--------
certificate pursuant to that certain Amended and Restated Credit Agreement dated
as of August 2, 1999 (as the same may be amended, supplemented or modified from
time to time, being hereinafter referred to as the "Credit Agreement"), among
----------------
Borrower, each of the banks or other lending institutions which is or may from
time to time become a signatory thereto and any successors or permitted assigns
thereof, The First National Bank of Chicago, as syndication agent, National City
Bank, as documentation agent, Chase Bank of Texas, National Association, as
agent for itself and the other Banks, as issuer of Letters of Credit thereunder,
and as the swing line lender (the "Administrative Agent"), and The Chase
--------------------
Manhattan Bank, as alternate currency agent (in such capacity, together with its
successors in such capacity, the "Alternate Currency Agent"). All terms defined
------------------------
in the Credit Agreement shall have the same meaning herein.
In accordance with the Credit Agreement, the Borrower hereby requests that
the Administrative Agent issue a Letter of Credit. The Letter of Credit shall:
(a) be issued on ________________, 19___;/1/
(b) be in the amount of $____________;/2/
(c) permit [a single drawing/multiple drawings]/3/ on the terms and
conditions set forth in the L/C Application attached as Annex I
-------
hereto;
(d) be payable upon presentation of a [sight draft/time draft. The
time draft shall be payable on __________________, 19___];/4/
(e) expire on __________________, 19___;/4/
(f) be issued for the account of ______________________;/5/ and
(g) be used for the following purpose:_______________________________
_________________________________________________________________
_____________________________________________________________./6/
The Letter of Credit is to be delivered by the Administrative Agent to
_____________________./7/
[Drawing/Each drawing]/3/ under the Letter of Credit shall be subject to
the conditions specified in the L/C Application attached as Annex I hereto.
-------
In connection with the foregoing and pursuant to the terms and provisions
of the Credit Agreement, the undersigned hereby certifies that the following
statements are true and correct:
(i) The representations and warranties contained in Article VIII of
the Credit Agreement and in each of the other Loan Documents are true and
correct on and as of the date hereof with the same force and effect as if
made on and as of such date.
(ii) No Default has occurred and is continuing or would result from
the issuance of the Letter of Credit requested hereunder.
___________________
/1/ Insert date not later than the Termination Date.
/2/ Insert face amount of Letter of Credit. Minimum face amount: $50,000.
Issuance is subject to Dollar limit on aggregate face amount of Letters of
Credit specified in Section 3.1 of the Credit Agreement.
/3/ Specify one.
/4/ Insert date not later than the earlier of (a) one year after issuance or
(b) the Termination Date.
/5/ Insert name and address of account party, which shall be the Borrower or a
Subsidiary of the Borrower.
/6/ Describe purpose for which Letter of Credit will be used.
/7/ Insert name of Borrower or name and address of beneficiary.
LETTER OF CREDIT REQUEST FORM - Page 1
(iii) The face amount of the Letter of Credit requested hereunder,
when added to all outstanding Letter of Credit Liabilities, will not exceed
$30,000,000.
(iv) The face amount of the Letter of Credit requested hereunder,
when added to all outstanding Advances and Letter of Credit Liabilities,
will not exceed the lesser of the Borrowing Base or the amount of the
Commitments.
(v) Each Company has adequate capital to conduct its business as a
going concern, as now conducted and as proposed to be conducted, each
Company will be able to meet its obligations under the Loan Documents and
in respect of its other existing and future indebtedness and liabilities as
and when the same shall be due and payable, and each Company is not
insolvent (as that term is defined in 11 U.S.C. (S) 101 or applicable law)
and will not be rendered insolvent by the Letter of Credit, and the
foregoing statements are supported by the Companies' internal projections
and forecasts.
(vi) The proposed terms of the Letter of Credit requested hereunder
and the transactions proposed to be supported thereby are accurately and
completely described on the L/C Application attached as Annex I hereto.
-------
(vii) All information supplied below is true, correct, and complete
as of the date hereof.
Information
-----------
(a) Outstanding principal amount of Advances.......... $____________
(b) Outstanding Letter of Credit Liabilities.......... $____________
(c) Borrowing Base.................................... $____________
(d) The amount of the Commitmentsminus the sum of line
(a) plus line (b)................................. $____________
(e) The Borrowing Base minus the sum of line (a) plus
line (b).......................................... $____________
(f) Difference of $30,000,000 minus line (b).......... $____________
(g) Net availability for Letters of Credit: [lesser of
line (d), line (e) or line (f)]................... $____________
(h) Face Amount of requested Letter of Credit......... $____________
(i) Date requested for issuance of Letter of Credit... ______, 19__
BORROWER:
--------
CELLSTAR CORPORATION
By:__________________________________________
Name:___________________________________
Title:__________________________________
Dated as of:__________________
[insert date of
proposed issuance
of Letter of Credit]
cc: The Chase Manhattan Bank
Agency Services
One Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
LETTER OF CREDIT REQUEST FORM - Page 2
EXHIBIT D
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Compliance Certificate
----------------------
COMPLIANCE CERTIFICATE
----------------------
TO: Chase Bank of Texas, National Association, as Administrative Agent
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx
Ladies and Gentlemen:
The undersigned is the president, chief executive officer, the chief
financial officer or the corporate controller of CELLSTAR CORPORATION, a
Delaware corporation (the "Borrower"), and is authorized to make and deliver
--------
this certificate pursuant to that certain Amended and Restated Credit Agreement
dated as of August 2, 1999 (as the same may be amended, supplemented or modified
from time to time, being hereinafter referred to as the "Credit Agreement"),
----------------
among the Borrower, each of the banks or other lending institutions which is or
may become a party thereto and the successors and permitted assigns thereof, The
First National Bank of Chicago, as syndication agent (the "Syndication Agent"),
-----------------
National City Bank, as documentation agent (the "Documentation Agent"), Chase
-------------------
Bank of Texas, National Association, a national banking association, as
administrative agent for itself and each of the other Banks, as issuer of
Letters of Credit thereunder and as the swing line lender (the "Administrative
Agent"), and The Chase Manhattan Bank, as alternate currency agent (the
"Alternate Currency Agent"). All terms defined in the Credit Agreement shall
------------------------
have the same meaning herein.
In connection with the foregoing and pursuant to the terms and provisions
of the Credit Agreement, the undersigned hereby certifies to the Agent and each
Bank that the following statements are true and correct:
A. Representations and Warranties. The representations and warranties
------------------------------
contained in Article VIII of the Credit Agreement and in each of the other Loan
Documents are true and correct on and as of the date hereof with the same force
and effect as if made on and as of such date.
B. Financial Covenants. The information set forth below is true and
-------------------
correct based upon the financial statements delivered herewith as of the last
day of the fiscal quarter next preceding the date of this certificate:
(1) Consolidated Tangible Net Worth as of ___________, ______:
-------------------------------
(a) Stockholders' or owners' equity of the Borrower and
the Subsidiaries on a consolidated basis as of such
date.................................................... $___________
(b) Amount at which shares of capital stock of any
Person appear as an asset on the balance sheet of
such Person............................................. $___________
(c) Goodwill, including amounts that represent the
excess of the purchase price paid for assets or
stock over the value assigned thereto................... $___________
(d) Patents, trademarks, trade names, and copyrights........ $___________
(e) Deferred expenses....................................... $___________
(f) Loans and advances to any stockholder, director,
officer, partner or employee of the Borrower, any
Subsidiary, or any Affiliate of the Borrower or
any Subsidiary.......................................... $___________
(g) All other assets which are properly classified as
intangible assets....................................... $___________
(h) Sum of Lines (b), (c), (d), (e), (f) and (g)............ $___________
(i) Tangible Net Worth (Difference of Line (a) minus
Line (h))............................................... $___________
(j) Sum of net income, after provision for income
taxes, of the Borrower and the Subsidiaries on a
consolidated basis (without any deduction for
losses) for each fiscal quarter of the Borrower
ended through such date beginning with the fiscal
quarter ending August 31, 1999......................... $___________
(k) 50% of Line (j)........................................ $___________
(l) With respect to any issuance, sale or other
disposition of any shares of capital stock or
other equity securities of Borrower of any class
(or any securities convertible or exchangeable
for any such shares, or any rights, warrants
or options to subscribe for or purchase any
such shares), the aggregate gross proceeds of
such issuance, sale or other disposition, less
----
the following: (i) placement agent fees, (ii)
underwriting discounts and commissions, (iii) bank
and other lender fees, and (iv) legal fees and other
expenses payable by the issuer
COMPLIANCE CERTIFICATE - Page 1
in connection with such issuance, sale or other
disposition, to the extent such proceeds are received
by the Borrower........................................ $___________
(m) Minimum Consolidated Tangible Net Worth required by
Section 11.1 of Credit Agreement ($150,000,000 plus
Line (k) plus Line (1))................................ $___________
(2) Consolidated Interest Coverage Ratio as of ___________,
------------------------------------
______ (for the four fiscal quarter period most recently
ended):
(a) The sum of the following, calculated on a consolidated
basis for the Borrower and the Subsidiaries, without
duplication: (i) the amount of net income for the four
fiscal quarter period most recently ended (whether
positive or negative) before interest expense, income
taxes and extraordinary items, net of (ii) all non-cash
items (such as deferred taxes, depreciation,
amortization of goodwill and all other non-cash charges
accrued but not actually paid) which, in determining net
income for such period, were deducted from (or included
in) gross income for such period; provided, however,
-------- -------
that for purposes of the foregoing calculation, changes
in the allowance for doubtful accounts shall not be
treated as a non-cash item............................. $___________
(b) Interest expense of the Borrower and the Subsidiaries
on a consolidated basis................................ $___________
(c) Ratio of Line (a) to Line (b).......................... ____ to ____
(d) Minimum Consolidated Interest Coverage Ratio required
by Section 11.2 of Credit Agreement.................... 3.0 to 1.0
(3) Companies Interest Coverage Ratio as of _____________,
---------------------------------
______ (for the four fiscal quarter period then ended):
(a) The sum of the following, calculated on a combined
basis for the Companies, without duplication: (i) the
amount of net income for the four fiscal quarter period
most recently ended (whether positive or negative)
before interest expense, income taxes and extraordinary
items, net of (ii) all non-cash items (such as deferred
taxes, depreciation, amortization of goodwill and all
other non-cash charges accrued but not actually paid)
which, in determining net income for such period, were
deducted from (or included in) gross income for such
period; provided, however, that for purposes of
-------- -------
calculating the foregoing, changes in the allowance for
doubtful accounts shall not be treated as a non-cash
item................................................... $___________
(b) Interest expense of the Borrower and the Subsidiaries
on a consolidated basis (Line 2(b)).................... $___________
(c) Ratio of Line (a) to Line (b).......................... ___ to ____
(d) Amount of cash transferred from Subsidiaries to the
Companies as permitted by Section 11.3 of the Credit
Agreement/1/........................................... $___________
(e) Ratio of Line (a) plus Line (d) to Line (b)............ ____ to ___
(f) Minimum Companies Interest Coverage Ratio required
by Section 11.3 of Credit Agreement.................... 1.25 to 1.0
(4) Minimum Turnover Ratio for the quarter ended ___________,
----------------------
______:
(a) Cost of goods sold for the Borrower and the
Subsidiaries on a consolidated basis in the period
of the four fiscal quarters then ended................. $___________
(b) Consolidated Average Inventory Per Quarter for
each of the most recent four fiscal quarters then
ended:
___________________________
/1/ In the event it is determined that the Companies Cash Flow is not
sufficient to cause compliance with Section 11.3 of the Credit Agreement,
then within ten days after such determination, the Borrower will cause to
be transferred to the Companies from the other Subsidiaries cash in an
amount which when added to the Companies Cash Flow is sufficient to cause
compliance with Section 11.3 of the Credit Agreement, and, to the extent
they comply with such covenant, the Companies shall be deemed to have met
the requirements of Section 11.3 of the Credit Agreement for the relevant
period of determination. The Companies may not use transferred cash to meet
the ratio requirement of Section 11.3 of the Credit Agreement in more than
two consecutive fiscal quarters. Such transferred cash shall remain with
the Companies, notwithstanding any other covenants to the contrary
contained herein, until the Companies have demonstrated compliance with
Section 11.3 of the Credit Agreement without the benefit of such
transferred cash.
COMPLIANCE CERTIFICATE - Page 2
Beginning Ending
Inventory Inventory
Quarters Amount Amount
-------- ------ ------
1 $_______ + $_______ / 2 =......... $___________
2 $_______ + $_______ / 2 =......... $___________
3 $_______ + $_______ / 2 =......... $___________
4 $_______ + $_______ / 2 =......... $___________
(c) Total sum of Consolidated Average Inventory Per
Quarter for quarters shown in Line (b)................. $___________
(d) Consolidated Average Inventory (Line (c) divided
by four)............................................... $___________
(e) Turnover Ratio (Ratio of Line (a) to Line (d))......... ____ to ___
(f) Minimum Turnover Ratio required by Section 11.4 of
Credit Agreement....................................... 6.0 to 1.0
(5) Consolidated Funded Debt to Consolidated Cash Flow Ratio as
--------------------------------------------------------
of __________, ______:
(a) On a consolidated basis for the Borrower and the
Subsidiaries in accordance with GAAP, all
obligations for borrowed money (whether as a
direct obligor on a promissory note, bond,
debenture or other similar instrument, as a
reimbursement obligor with respect to an issued
letter of credit or similar instrument, as an
obligor under a Guarantee for borrowed money, or
as any other type of direct or contingent
obligor) as of the last day of the fiscal
quarter most recently ended............................ $___________
(b) On a consolidated basis for the Borrower and the
Subsidiaries, without duplicating any amount
included in Line (a) above, the capitalized
amount of all obligations to pay rent or other
amounts under a lease of (or other agreement
conveying the right to use) real and/or personal
property, which obligations are required to be
classified and accounted for as a capital lease
on a consolidated balance sheet of the Borrower
under GAAP (other than the interest component of
such obligations), as of the last day of the
fiscal quarter most recently ended, determined
in accordance with GAAP................................ $___________
(c) Consolidated Funded Debt (the sum of Line (a)
plus Line (b))......................................... $___________
(d) Consolidated Cash Flow (Line (2)(a))................... $___________
(e) Ratio of Line (c) to Line (d).......................... ____ to ___
(f) Maximum Consolidated Funded Debt to Consolidated
Cash Flow Ratio permitted by Section 11.5 of the
Credit Agreement....................................... 3.5 to 1.0
(6) Consolidated Senior Debt to Consolidated Cash Flow Ratio as
--------------------------------------------------------
of _____________, ______:
(a) Consolidated Funded Debt (Line (5)(c))................. $___________
(b) Subordinated Debt...................................... $___________
(c) Consolidated Senior Debt (Line (a) minus Line (b))..... $___________
(d) Consolidated Cash Flow (Line (2)(a))................... $___________
(e) Ratio of Line (c) to Line (d).......................... ___ to _____
(f) Maximum Consolidated Senior Debt to Consolidated
Cash Flow Ratio permitted by Section 11.6 of the
Credit Agreement....................................... 2.5 to 1.0
(7) Intercompany Loans and Capital Contributions as of
--------------------------------------------
____________, _______:
(a) Capital contributions by the Borrower or any
Subsidiary to any other Subsidiary or any Foreign
Affiliate (other than as described in subsections
(B) through (E) of Section 10.5(i) of the Credit
Agreement) during the current fiscal year through
the fiscal quarter most recently ended/2/.............. $___________
(b) Capital contributions by the Borrower or any
Subsidiary to any other Subsidiary or any Foreign
Affiliate (other than as described in subsections
(B) through (E) of Section 10.5(i) of the Credit
Agreement) during the fiscal year most recently
ended/3/............................................... $___________
___________________
/2/ For each Compliance Certificate delivered for any of the Borrower's first
three quarters of any fiscal year.
/3/ For each Compliance Certificate delivered for any fiscal year-end of the
Borrower.
COMPLIANCE CERTIFICATE - Page 3
(c) Maximum amount of such capital contributions
permitted by subsection (F) of Section 10.5(i)
---------- --- ---------------
of the Credit Agreement during any fiscal year........ $20,000,000
(d) Aggregate amount of loans and advances by the
Borrower or any Subsidiary to any Foreign Affiliate
outstanding as of such date............................ $___________
(e) Maximum aggregate amount of such loans and advances
permitted to be outstanding at any time................ $10,000,000
(f) Aggregate amount of loans and advances by the Borrower
or any Subsidiary to any other Subsidiary (other than
as described in subsections (B) and (C) of Section
----------------------- -------
10.5(i) of the Credit Agreement) outstanding as of
-------
such date./4/
(g) Maximum aggregate amount of such loans and advances
permitted to be outstanding at any time:
(1) Stockholders' equity in the Borrower as of such
date.............................................. $___________
(2) 20% of Line (1)................................... $___________
(3) Greater of $80,000,000 or Line (2)................ $___________
The undersigned hereby certifies that (a) the above information and
calculations are true and correct and not misleading as of the date
hereof, (b) Borrower has delivered to the Agent and the Banks all
financial information and reports required by the Credit Agreement by the
dates provided therein, and (c) no Default has occurred and is
continuing.
CELLSTAR CORPORATION
By:_______________________________________
Name:__________________________________
Title:_________________________________
Dated as of:___________________
________________________
/4/ Amounts loaned or advanced by the Borrower or any Subsidiary to any
Subsidiary that are in turn loaned or advanced by that Subsidiary to
another Subsidiary shall be counted only once for purposes of this
calculation.
COMPLIANCE CERTIFICATE - Page 4
EXHIBIT E
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Borrowing Base Report
---------------------
BORROWING BASE REPORT
TO: Chase Bank of Texas, National Association, as Administrative Agent
0000 Xxxx Xxxxxx
Xxxx Xxxxxx Xxx 000000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxx
Ladies and Gentlemen:
This Borrowing Base Report for the month ending _________, 19__, is
executed and delivered by CELLSTAR CORPORATION, a Delaware corporation (the
"Borrower"), pursuant to that certain Amended and Restated Credit Agreement
--------
dated as of August 2, 1999 (as the same may be amended, supplemented, modified
or restated from time to time, the "Credit Agreement"), among the Borrower, each
----------------
of the banks or other lending institutions which is or may from time to time
become a signatory thereto and any successors or permitted assigns thereof (each
a "Bank" and, collectively, the "Banks"), the First National Bank of Chicago, as
---- -----
syndication agent (the "Syndication Agent"), National City Bank, as
-----------------
documentation agent ("Documentation Agent"), and Chase Bank of Texas, National
-------------------
Association, a national banking association, as administrative agent for the
Banks, as issuer of Letters of Credit thereunder and as the swing line lender
(in such capacity, together with its successors in such capacity, the
"Administrative Agent"). All terms used herein shall have the meanings assigned
--------------------
to them in the Credit Agreement.
The Borrower represents and warrants to the Agent and each Bank that all
information contained herein is true, correct, and complete, and that the total
Eligible Inventory referred to below represent the Eligible Accounts and
Eligible Inventory that qualify for purposes of determining the Borrowing Base
under the Credit Agreement.
ACCOUNTS RECEIVABLE:
1. Gross Accounts of the Companies (ending balance for period
ended _______________, 19__)................................................................................... $____________
2. Less: Ineligible Accounts (determined pursuant to the definition of Eligible
Accounts in the Credit Agreement, without duplication):
(a) Accounts not complying with applicable law................................................................ $____________
(b) Accounts outstanding for more than 90 days past the original date of invoice.............................. $____________
(c) Accounts created outside of the ordinary course of business............................................... $____________
(d) Accounts from unenforceable contracts or contracts not fully completed by any Company..................... $____________
(e) Accounts including progress xxxxxxxx...................................................................... $____________
(f) Accounts from sales on xxxx-and-hold, guaranteed sale, sale-and-return, etc. ............................. $____________
(g) Accounts subject to a lien other than liens held by the Agent or permitted by
Section 10.2 of the Credit Agreement...................................................................... $____________
(h) Accounts as to which any Company does not have good and indefeasible title................................ $____________
(i) Accounts subject to anti-assignment provisions............................................................ $____________
(j) Accounts subject to setoff, dispute, etc. ................................................................ $____________
(k) Accounts owed by account debtors subject to bankruptcy, etc. ............................................. $____________
(l) Accounts evidenced by chattel paper or instruments........................................................ $____________
(m) Accounts subject to default by any party thereto.......................................................... $____________
(n) Accounts owed by Foreign Subsidiaries..................................................................... $____________
(o) Accounts owed by Foreign Affiliates....................................................................... $____________
(p) Accounts owed by other Affiliates of any Company, except for accounts owed by Xxxx Telecom
for sales of inventory in the ordinary course of the Companies' business.................................. $____________
(q) Accounts owed by employees of any Company................................................................. $____________
(r) Accounts owed by other foreign account debtors in excess of $15,000,000................................... $____________
(s) Accounts not payable in Dollars........................................................................... $____________
(t) Accounts owed by each account debtor with over 20% of the balances owed by such
account debtor and its Affiliates to the Companies on a consolidated basis
outstanding for more than 90 days past the original date of invoice....................................... $____________
(u) All accounts owed by each account debtor if balances owed by such account debtor and its Affiliates
constitute more than 10% of the total accounts receivable of the Companies on a consolidated basis........ $____________
(v) Accounts owed by the United States of America or any agency thereof for which the Federal
Assignment of Claims Act of 1940, as amended, has not been complied with.................................. $____________
(w) Contra accounts owed by any Company to the account debtor which are payable pursuant
to terms which are not ordinary and customary............................................................. $____________
(x) Contra accounts owed by any Company to the account debtor which are past due or
otherwise in default...................................................................................... $____________
(y) Past due credits.......................................................................................... $____________
3. Total Ineligible Accounts (sum of Lines 2(a)-(y)).............................................................. $____________
4. total Eligible Accounts (Line 1 minus Line 3).................................................................. $____________
BORROWING BASE REPORT Page 1
INVENTORY:
5. Total Inventory of the Companies (valued at lesser of actual cost for purchase from
original wholesale supplier or fair market value).................................................. $____________
6. Less: Ineligible Inventory (determined pursuant to the definition of
Eligible Inventory in the Credit Agreement, without duplication)
(a) Work-in-process inventory..................................................................... $____________
(b) Value of obsolescence reserve (expressed as a positive number)................................ $____________
(c) Inventory shipped or delivered on consignment, sale or return, or similar terms............... $____________
(d) Inventory in transit (except inventory in transit from Motorola, Nokia or
Ericsson to the Companies' main warehouse in Carrollton, Texas, the
Companies' warehouse with Circle Freight at XXX Xxxxxxx, Xxxxx, or any
of the Companies' warehouses in Miami, Florida or Chino, California, which
is properly documented and insured pursuant to shipping documents and insurance,
and proof thereof, satisfactory to the Agent)................................................. $____________
(e) Inventory which is offsite, except offsite inventory covered by a waiver and
agreement satisfactory to Agent............................................................... $____________
(f) Service or repair parts or equipment.......................................................... $____________
(g) Inventory located at location for which required landlord's waiver not received............... $____________
(h) Inventory subject to dispute as to any Company's title or right to possession................. $____________
(i) Inventory located outside of the United States of America..................................... $____________
(j) Inventory not in good condition or that does not comply with any applicable law or
governmental standard for manufacture, use, or sale........................................... $____________
(k) Inventory determined to be unmarketable by the Agent.......................................... $____________
(l) Inventory subject to a lien other than liens held by the Agent or permitted by
Section 10.2 of the Credit Agreement.......................................................... $____________
7. Total Ineligible Inventory (sum of Lines 6(a)-(l))................................................. $____________
8. Total Eligible Inventory of NAC (Line 5 minus Line 7).............................................. $____________
BORROWING BASE:
9. Total Eligible Accounts (Line 4)................................................................... $___________
10. Total Eligible Inventory (Line 8).................................................................. $___________
11. Amount of Eligible Inventory that is Price Protected Inventory..................................... $___________
12. Percentage of Eligible Inventory that is Price Protected Inventory................................. ___________%
13. ___%/1/ of Line 9.................................................................................. $___________
14. 60% of the Total Commitment Amount................................................................. $___________
15. ___%/2/ of Line 10................................................................................. $___________
16. Lesser of Line 14 or Line 15....................................................................... $___________
17. Borrowing Base: Sum of Line 13 plus Line 16....................................................... $___________
18. Outstanding Principal Amount of Advances........................................................... $___________
19. Outstanding Letter of Credit Liabilities........................................................... $___________
20. Sum of Line 18 plus Line 19........................................................................ $___________
21. Available Credit Amount or amount to be paid if negative (the lesser of the Total Commitment
Amount or Line 17, minus Line 20).................................................................. $___________
______________________
/1/ Specify either 80% or 85%.
/2/ Specify either 50% or 65%, provided that if Line 12 is less than 65%, this
percentage shall be 50%.
APPLICABLE PERCENTAGE:
Designate the Applicable Percentage to be in effect from the date this
Borrowing Base Report is delivered to the Agent until the next Borrowing Base
Report is hereafter delivered to the Agent, all in accordance with the Credit
Agreement:
____/3/ If the percentage of Eligible Accounts specified in Line 13 is 80% and
---
the percentage of Eligible Inventory specified in Line 15 is 50% and
---
Line 20 does not exceed Line 17, the following grid is applicable for
determining the Applicable Percentage, and the Borrower has indicated
below the applicable level based on the ratio of Consolidated Funded
Debt to Consolidated Cash Flow demonstrated in the most recent
Compliance Certificate delivered to the Agent in accordance with the
Credit Agreement:
Applicable
Ratio of Percentage
Consolidated for Eurodollar Applicable
Funded Debt to Advances and Margin Applicable
Applicable/3/ Consolidated Alternate for Floating Letter of Applicable
Level Cash Flow Currency Advances Rate Advances Credit Fees Commitment Fee
----- --------- ----------------- ------------- ----------- --------------
_______ Less than 1.00 to 1.00 1.375% 0% 1.375% 0.250%
Greater than or equal 1.500% 0% 1.500% 0.250%
to 1.00 to 1.00, but
_______ less than 1.50 to 1.00
Greater than or equal 1.750% 0.25% 1.750% 0.375%
to 1.50 to 1.00, but
_______ less than 2.25 to 1.00
Greater than or equal 2.000% 0.50% 2.000% 0.375%
to 2.25 to 1.00, but
_______ less than 3.00 to 1.00
Greater than or equal 2.250% 0.75% 2.250% 0.500%
to 3.00 to 1.00 but
_______ less than 3.50 to 1.00
Greater than or equal 2.500% 1.00% 2.500% 0.500%
_______ to 3.50 to 1.00
____/3/ If the percentage of is 65% or the amount of Line 20 exceeds Line 17,
the following grid is applicable for determining the Eligible Accounts
Applicable Percentage, and specified in Line 13 is the Borrower has
indicated below the applicable level based on the ratio of Consolidated
Funded Debt 85% or the percentage of to Consolidated Cash Flow Eligible
Inventory demonstrated in the most recent Compliance Certificate
delivered to the Agent in accordance with the specified in Line 15
Credit Agreement:
Applicable
Ratio of Percentage
Consolidated for Eurodollar Applicable
Funded Debt to Advances and Margin Applicable
Applicable/3/ Consolidated Alternate for Floating Letter of Applicable
Level Cash Flow Currency Advances Rate Advances Credit Fees Commitment Fee
----- --------- ----------------- ------------- ----------- --------------
_______ Less than 1.00 to 1.00 1.625% 0.25% 1.625% 0.250%
Greater than or equal 1.750% 0.25% 1.750% 0.250%
to 1.00 to 1.00, but less
_______ than 1.50 to 1.00
Greater than or equal 2.000% 0.50% 2.000% 0.375%
to 1.50 to 1.00, but less
_______ than 2.25 to 1.00
Greater than or equal 2.250% 0.75% 2.250% 0.375%
to 2.25 to 1.00, but less
_______ than 3.00 to 1.00
Greater than or equal 2.500% 1.00% 2.500% 0.500%
to 3.00 to 1.00 but less
_______ than 3.50 to 1.00
Greater than or equal 2.750% 1.25% 2.750% 0.500%
_______ to 3.50 to 1.00
______________
/3/ Check whichever is applicable.
The Borrower further represents and warrants to the Agent and the Banks that
the representations and warranties contained in Article VIII of the Credit
Agreement are true and correct on and as of the date of this Borrowing Base
Report as if made on and as of the date hereof, and that no Default has occurred
and is continuing.
Date: _______________ NATIONAL AUTO CENTER, INC.
By:_________________________________________
Name:____________________________________
Title:___________________________________
cc: The Chase Manhattan Bank
Agency Services
Xxx Xxxxx Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxx
Fax No.: (000) 000-0000
EXHIBIT F-1
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Borrower Security Agreement
---------------------------
BORROWER SECURITY AGREEMENT
---------------------------
THIS SECURITY AGREEMENT (this "Agreement") dated as of October 15, 1997, is
---------
by and between CELLSTAR CORPORATION, a Delaware corporation (the "Debtor"), and
------
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking association
("TCB"), not in its individual capacity but solely as agent for itself and each
---
of the other banks or lending institutions (each, a "Bank" and, collectively,
----
the "Banks") which is or may from time to time become a signatory to the Credit
-----
Agreement (hereinafter defined) or any successor or permitted assignee thereof
(TCB in such capacity, together with its successors in such capacity, the
"Agent").
-----
R E C I T A L S:
- - - - - - - -
A. The Debtor, the Agent, The First National Bank of Chicago and National
City Bank, as co-agents (collectively, the "Co-Agents"), and the Banks
---------
heretofore entered into that certain Credit Agreement of even date herewith
(such Credit Agreement, as the same may be amended, supplemented or modified
from time to time, the "Credit Agreement"), providing for loans and extensions
----------------
of credit to the Debtor.
B. The Agent, the Co-Agents and the Banks have conditioned their
obligations under the Credit Agreement on the execution and delivery by the
Debtor of this Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
-----------
Section 1.1 Definitions. As used in this Agreement, the following terms
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have the following meanings:
"Accounts" means any "account", as such term is defined in
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Section 9.106 of the UCC, now owned or hereafter acquired by the
Debtor, and, in any event, shall include, without limitation,
each of the following, whether now owned or hereafter acquired by
the Debtor: (a) all rights of the Debtor to payment for goods
sold or leased or services rendered, whether or not earned by
performance, (b) all accounts receivable of the Debtor, (c) all
rights of the Debtor to receive any payment of money or other
form of consideration, (d) all security pledged, assigned, or
granted to or held by the Debtor to secure any of the foregoing,
(e) all guaranties of, or indemnifications with respect to, any
of the foregoing, and (f) all rights of the Debtor
BORROWER SECURITY AGREEMENT - Page 1
as an unpaid seller of goods or services, including, but not
limited to, all rights of stoppage in transit, replevin,
reclamation, and resale.
"Chattel Paper" means any "chattel paper", as such term is
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defined in Section 9.105(a)(2) of the UCC, now owned or hereafter
acquired by the Debtor.
"Collateral" has the meaning specified in Section 2.1 of
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this Agreement.
"Document" means any "document", as such term is defined in
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Section 9.105(a)(6) of the UCC, now owned or hereafter acquired
by the Debtor, including, without limitation, all documents of
title and warehouse receipts of the Debtor.
"Equipment" means any "equipment", as such term is defined
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in Section 9.109(2) of the UCC, now owned or hereafter acquired
by the Debtor and, in any event, shall include, without
limitation, all machinery, equipment, furnishings, fixtures and
vehicles now owned or hereafter acquired by the Debtor and any
and all additions, substitutions, and replacements of any of the
foregoing, wherever located, together with all attachments,
components, parts, equipment, and accessories installed thereon
or affixed thereto.
"General Intangibles" means any "general intangibles", as
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such term is defined in Section 9.106 of the UCC, now owned or
hereafter acquired by the Debtor and, in any event, shall
include, without limitation, each of the following, whether now
owned or hereafter acquired by the Debtor: (a) all of the
Debtor's patents, patent applications, patent rights, service
marks, trademarks, trade names, trade secrets, intellectual
property, registrations, goodwill, copyrights, franchises,
licenses, permits, proprietary information, customer lists,
designs, and inventions, (b) all of the Debtor's books, records,
data, plans, manuals, computer software, and computer programs,
(c) all of the Debtor's contract rights, partnership interests,
joint venture interests, securities, deposit accounts, investment
accounts, and certificates of deposit, (d) all rights of the
Debtor to payment under letters of credit and similar agreements,
(e) all tax refunds and tax refund claims of the Debtor, (f) all
choses in action and causes of action of the Debtor (whether
arising in contract, tort, or otherwise and whether or not
currently in litigation) and all judgments in favor of the
Debtor, (g) all rights and claims of the Debtor under warranties
and indemnities, and (h) all rights of the Debtor under any
insurance, surety, or similar contract or arrangement.
"Instrument" means any "instrument", as such term is defined
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in Section 9.105(a)(9) of the UCC, now owned or hereafter
acquired by the Debtor, other than stock and other securities.
BORROWER SECURITY AGREEMENT - Page 2
"Inventory" means any "inventory", as such term is defined
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in Section 9.109(4) of the UCC, now owned or hereafter acquired
by the Debtor, and, in any event, shall include, without
limitation, each of the following, whether now owned or hereafter
acquired by the Debtor: (a) all goods and other personal property
of the Debtor that are held for sale or lease or to be furnished
under any contract of service, (b) all raw materials, work-in-
process, finished goods, inventory, supplies, and materials of
the Debtor, (c) all wrapping, packaging, advertising, and
shipping materials of the Debtor, (d) all goods that have been
returned to, repossessed by, or stopped in transit by the Debtor,
and (e) all Documents evidencing any of the foregoing.
"Obligations" means:
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(a) the indebtedness, liabilities and obligations of
the Debtor to the Banks evidenced by those Notes of even
date herewith, executed by Debtor and payable to the order
of the Banks in the aggregate principal amount of
$135,000,000;
(b) the "Obligations", as such term is defined in the
Credit Agreement;
(c) all future Advances by the Agent, any Co-Agent or
any Bank to the Debtor, or either of them;
(d) all costs and expenses, including without
limitation all reasonable attorneys' fees and legal
expenses, incurred by the Agent, any Co-Agent or any Bank to
preserve and maintain the Collateral, collect the
obligations herein described and enforce this Agreement;
(e) all other obligations, indebtedness and
liabilities of the Debtor, or either of them, to the Agent,
any Co-Agent or any Bank under any of the Loan Documents,
now existing or hereafter arising, regardless of whether
such obligations, indebtedness and liabilities are similar,
dissimilar, related, unrelated, direct, indirect, fixed,
contingent, primary, secondary, joint, several, or joint and
several; and
(f) all extensions, renewals and modifications of any
of the foregoing.
"Permitted Liens" means the security interests granted
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hereby and Liens expressly permitted by Section 10.2 of the
Credit Agreement.
BORROWER SECURITY AGREEMENT - Page 3
"Proceeds" means any "proceeds", as such term is defined in
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Section 9.306 of the UCC and, in any event, shall include, but
not be limited to, (a) any and all proceeds of any insurance,
indemnity, warranty, or guaranty payable to the Debtor from time
to time with respect to any of the Collateral, (b) any and all
payments (in any form whatsoever) made or due and payable to the
Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure, or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any
person acting under color of Governmental Authority), and (c) any
and all other amounts from time to time paid or payable under or
in connection with any of the Collateral.
"UCC" means the Uniform Commercial Code as in effect in the
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State of Texas or, if so required with respect to any particular
Collateral by mandatory provisions of applicable law, as in
effect in the jurisdiction in which such Collateral is located.
Section 1.2 Terms Defined in Credit Agreement. All capitalized terms used
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and not otherwise defined herein shall have their respective meanings as
specified in the Credit Agreement.
ARTICLE II
Security Interest
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Section 2.1 Security Interest. As collateral security for the prompt
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payment and performance in full when due of the Obligations (whether at stated
maturity, by acceleration, or otherwise), the Debtor hereby grants to the Agent,
for the pro rata benefit of the Banks, a first priority lien on and security
interest in all of the Debtor's right, title, and interest in and to the
following, whether now owned or hereafter arising or acquired and wherever
located (collectively, the "Collateral"):
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(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments;
(d) all General Intangibles;
(e) all Documents;
(f) all Inventory;
(g) all Equipment; and
BORROWER SECURITY AGREEMENT - Page 4
(h) all Proceeds and products of any or all of the foregoing.
Without limiting the foregoing, this Agreement secures the payment of all
amounts that constitute part of the Obligations and would be owed by the Debtor
to the Agent, any Co-Agent or any Bank but for the fact that they are
unenforceable or not allowable due to the existence of bankruptcy,
reorganization, or similar proceedings involving the Debtor. If the grant,
pledge, or collateral transfer or assignment of any rights of the Debtor under
any contract included in the Collateral is expressly prohibited by such
contract, then the security interest hereby granted therein nonetheless remains
effective to the extent allowed by UCC Section 9.318 or other applicable law but
is otherwise limited by that prohibition.
Section 2.2 Debtor Remains Liable. Notwithstanding anything to the
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contrary contained herein, (a) the Debtor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the Agent
of any of its rights hereunder shall not release the Debtor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) neither the Agent nor any Bank shall have any obligation or
liability under any of the contracts and agreements included in the Collateral
by reason of this Agreement, nor shall the Agent or any Bank be obligated to
perform any of the obligations or duties of the Debtor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
ARTICLE III
Representations and Warranties
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To induce the Agent to enter into this Agreement and the Agent, the Co-
Agents and the Banks to enter into the Credit Agreement, the Debtor represents
and warrants to the Agent that:
Section 3.1 Title. The Debtor is, and with respect to Collateral
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acquired after the date hereof the Debtor will be, the legal and beneficial
owner of the Collateral free and clear of any Lien, except Permitted Liens.
Section 3.2 Accounts. Unless the Debtor has given the Agent written
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notice to the contrary, whenever the security interest granted hereunder
attaches to an Account, the Debtor shall be deemed to have represented and
warranted to the Agent as to each and all of its Accounts that (a) each Account
is genuine and in all respects what it purports to be, (b) each Account
represents the legal, valid, and binding obligation of the account debtor
evidencing indebtedness unpaid and owed by such account debtor arising out of
the performance of labor or services by the Debtor or the sale or lease of goods
by the Debtor, (c) the amount of each Account represented as owing is the
correct amount actually and unconditionally owing except for normal trade
discounts granted in the ordinary course of business, and (d) to the best of
Debtor's knowledge, no Account is subject to any offset, counterclaim, or other
defense.
BORROWER SECURITY AGREEMENT - Page 5
Section 3.3 Financing Statements. No financing statement, security
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agreement, or other Lien instrument covering all or any part of the Collateral
is on file in any public office, except those filed in favor of the Agent
pursuant to this Agreement or with respect to any other Permitted Liens. Except
as set forth on Schedule 3 hereto, the Debtor has not within the past five years
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done business under any name or trade name other than its legal name set forth
at the beginning of this Agreement.
Section 3.4 Principal Place of Business. The principal place of business
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and chief executive office of the Debtor, and the office where the Debtor keeps
its books and records, is located at the address of the Debtor shown at the
beginning of this Agreement.
Section 3.5 Location of Collateral. All Inventory and Equipment of the
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Debtor is located at the places specified on Schedule 1 hereto. The Debtor has
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exclusive possession and control of its Inventory and Equipment. None of the
Inventory or Equipment is evidenced by a Document (including, without
limitation, a negotiable document of title). All Instruments and Chattel Paper
have been delivered to the Agent.
Section 3.6 Perfection. This Agreement creates a security interest in
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the Collateral in favor of the Agent. Upon the filing of UCC financing
statements in favor of the Agent in the jurisdictions listed on Schedule 2
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attached hereto, and upon the Agent's obtaining possession of all Documents and
Instruments of the Debtor, the security interest in favor of the Agent created
herein is and will constitute a valid and perfected Lien upon and security
interest in the Collateral, subject to no equal or prior Lien, except the
Permitted Liens.
ARTICLE IV
Covenants
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The Debtor covenants and agrees with the Agent that until the Obligations
are paid and performed in full and all Commitments have terminated:
Section 4.1 Encumbrances. The Debtor shall not create, permit, or suffer
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to exist, and shall defend the Collateral against, any Lien on the Collateral,
except the Permitted Liens, and shall defend the Debtor's rights in the
Collateral and the Agent's security interest in the Collateral against the
claims and demands of all Persons. The Debtor shall do nothing to impair the
rights of the Agent in the Collateral.
Section 4.2 Modification of Accounts. The Debtor shall, in accordance
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with prudent business practices, endeavor to collect or cause to be collected
from each account debtor under its Accounts, as and when due, any and all
amounts owing under such Accounts. Without the prior written consent of the
Agent, the Debtor shall not (a) grant any extension of time for any payment with
respect to any of the Accounts, except for extensions of time granted in the
ordinary course of Debtor's business for payment with respect to Accounts not
included in the Borrowing Base,
BORROWER SECURITY AGREEMENT - Page 6
(b) compromise, compound, or settle any of the Accounts for less than the full
amount thereof, except for compromise, compound or settlement in the ordinary
course of business of Accounts not included in the Borrowing Base, (c) release,
in whole or in part, any Person liable for payment thereof, except in connection
with settlements permitted by clause (b) above, (d) allow any credit or discount
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for payment with respect to any Account other than trade discounts granted in
the ordinary course of business, or (e) release any Lien or guaranty securing
any Account, except in connection with settlements permitted by clause (b)
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above.
Section 4.3 Disposition of Collateral. The Debtor shall not sell, lease,
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assign (by operation of law or otherwise), or otherwise dispose of, or grant any
option with respect to, the Collateral or any part thereof without the prior
written consent of the Agent, except as expressly permitted by the Credit
Agreement.
Section 4.4 Further Assurances. At any time and from time to time, upon
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the request of the Agent, and at the sole expense of the Debtor, the Debtor
shall promptly execute and deliver all such further instruments, agreements, and
documents and take such further action as the Agent may deem necessary or
desirable to preserve and perfect its security interest in the Collateral and
carry out the provisions and purposes of this Agreement. Without limiting the
generality of the foregoing, the Debtor shall (a) execute and deliver to the
Agent such financing statements as the Agent may from time to time require; (b)
deliver and pledge to the Agent all Documents (including, without limitation,
negotiable documents of title) evidencing Inventory or Equipment; (c) deliver
and pledge to the Agent all Instruments and Chattel Paper of the Debtor with any
necessary endorsements; and (d) execute and deliver to the Agent such other
documents, instruments, and agreements as the Agent may require to perfect and
maintain the validity, effectiveness, and priority of the Loan Documents and the
Liens intended to be created thereby. The Debtor authorizes the Agent to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the signature of the
Debtor where permitted by law. A carbon, photographic, or other reproduction of
this Agreement or of any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement and may be filed as a
financing statement.
Section 4.5 Risk of Loss; Insurance. The Debtor shall be responsible for
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any loss or damage to the Collateral. The Debtor shall, at is own expense,
maintain or cause to be maintained insurance with respect to the Collateral in
such amounts, against such risks, in such form, and with such insurers as shall
be satisfactory to the Agent from time to time. Each policy for liability
insurance shall provide for all losses to be paid on behalf of the Agent, for
the pro rata benefit of the Banks, and the Debtor as their interests may appear.
Each policy for property insurance shall contain loss payable clauses and a loss
payable endorsement in favor of the Agent, for the pro rata benefit of the
Banks, as its interest may appear. If the Debtor shall fail to maintain or
cause to be maintained the insurance required by this Agreement, the Agent shall
have the right (but shall be under no obligation) to obtain such insurance and
the Debtor shall reimburse the Agent for all costs and expenses incurred by the
Agent in obtaining such insurance. All such insurance shall provide that no
cancellation, reduction in amount, or change in coverage thereof shall be
effective unless the
BORROWER SECURITY AGREEMENT - Page 7
Agent has received 30 days prior written notice thereof. The Debtor shall
deliver to the Agent and each Bank copies of all insurance policies required by
this Agreement.
Section 4.6 Inspection Rights. The Debtor shall permit the Agent, each
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Bank and their respective representatives to examine, inspect, and audit the
Collateral and to examine, inspect, and copy the Debtor's books and records at
any reasonable time and as often as the Agent or any such Bank may desire during
normal business hours. The Agent and each Bank may at any time and from time to
time contact account debtors and other obligors to verify the existence,
amounts, and terms of the Debtor's Accounts.
Section 4.7 Mortgagee's and Landlord's Agreements. With respect to each
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location of Inventory having an aggregate value of $100,000 or more, as
specified on Schedule 1 hereto, the Debtor shall cause each mortgagee of real
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property owned by the Debtor and each landlord of real property leased by the
Debtor who has not previously done so to execute and deliver to the Agent, on or
before the date hereof, instruments satisfactory in form and substance to the
Agent by which such mortgagee or landlord waives its rights, if any, in the
Collateral (each, a "Landlord's Agreement"). After the date hereof, Debtor
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shall promptly deliver or cause to be delivered to the Agent Landlord's
Agreements in accordance with this Section for each location where the Inventory
hereafter has an aggregate value of $100,000 or more. At the request of the
Agent, Debtor shall promptly deliver or cause to be delivered Landlord's
Agreements for any locations where any Collateral may now or hereafter be
located.
Section 4.8 Corporate Changes. The Debtor shall not change its name,
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identity, or corporate structure in any manner that might make any financing
statement filed in connection with this Agreement seriously misleading unless
the Debtor shall have given the Agent 30 days prior written notice thereof and
shall have taken all action deemed necessary or desirable by the Agent to make
each financing statement not seriously misleading. The Debtor shall not change
its principal place of business, chief executive office, or the place where it
keeps its books and records unless it shall have given the Agent 30 days prior
written notice thereof and shall have taken all action deemed necessary or
desirable by the Agent to cause its security interest in the Collateral to be
perfected with the priority required by this Agreement.
Section 4.9 Books and Records; Information. The Debtor shall keep
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accurate and complete books and records of the Collateral and the Debtor's
business and financial condition in accordance with GAAP. The Debtor shall from
time to time at the request of the Agent deliver to the Agent such information
regarding the Collateral and the Debtor as the Agent may request, including,
without limitation, lists and descriptions of the Collateral and evidence of the
identity and existence of the Collateral. The Debtor shall xxxx its books and
records to reflect the security interest of the Agent under this Agreement.
BORROWER SECURITY AGREEMENT - Page 8
Section 4.10 Equipment and Inventory.
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(a) The Debtor shall keep the Equipment and Inventory at the
locations specified on Schedule 1 hereto or, upon 30 days prior written
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notice to the Agent, at such other places within the United States of
America where all action required to perfect the Agent's security interest
in the Equipment and Inventory with the priority required by this Agreement
shall have been taken.
(b) The Debtor shall maintain the Equipment and Inventory in
good condition and repair (ordinary wear and tear excepted). The Debtor
shall not permit any waste or destruction of the Equipment or Inventory or
any part thereof. The Debtor shall not permit the Equipment or Inventory to
be used in violation of any law, rule, or regulation or inconsistently with
the terms of any policy of insurance. The Debtor shall not use or permit
any of the Equipment or Inventory to be used in any manner or for any
purpose that would impair its value or expose it to unusual risk.
Section 4.11 Warehouse Receipts Non-Negotiable. The Debtor agrees that
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if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued in respect of any of the Collateral, such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7.104 of the UCC as in effect in any relevant jurisdiction or under relevant
law).
Section 4.12 Notification. The Debtor shall promptly, and in any event
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within five days after the Debtor obtains knowledge or becomes aware of any of
the following, notify the Agent of (a) any Lien or claim that has attached to or
been made or asserted against any of the Collateral, (b) any material damage to
or loss of any of the Collateral, (c) the occurrence of any other event that
could have a material adverse effect on the Collateral or the security interest
created hereunder, and (d) the occurrence or existence of any Default.
Section 4.13 Collection of Accounts. Except as otherwise provided in
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this Section, the Debtor shall have the right to collect and receive payments on
the Accounts. In connection with such collections, the Debtor may take (and, at
the Agent's direction, shall take) such actions as the Debtor or the Agent may
deem necessary or advisable to enforce collection of the Accounts. At any time,
if an Event of Default shall have occurred and be continuing, the Agent shall
have the right to, or upon the request of the Agent the Debtor shall, instruct
all account debtors and other Persons obligated in respect of the Accounts to
make all payments on the Accounts either (a) directly to the Agent, for the pro
rata benefit of the Banks (by instructing that such payments be remitted to a
post office box which shall be in the name and under the control of the Agent),
or (b) to one or more other banks in the United States of America (by
instructing that such payments be remitted to a post office box which shall be
in the name or under the control of the Agent) under arrangements in form and
substance satisfactory to the Agent pursuant to which the Debtor shall have
irrevocably instructed such other bank (and such other bank shall have agreed)
to remit all such payments directly to the Agent. In addition to the foregoing,
the Debtor agrees that if any Proceeds of any Collateral
BORROWER SECURITY AGREEMENT - Page 9
(including payments made in respect of Accounts) shall be received by the Debtor
while an Event of Default exists, the Debtor shall promptly deliver such
Proceeds to the Agent, for the pro rata benefit of the Banks, with any necessary
endorsements. Until such Proceeds are delivered to the Agent, such Proceeds
shall be held in trust by the Debtor for the benefit of the Agent and shall not
be commingled with any other funds or property of the Debtor. All Proceeds of
Collateral received by the Agent pursuant to this Section may at the option of
the Required Banks in the exercise of their absolute discretion, (i) be applied
by the Agent, the Co-Agents and the Banks to their respective Obligations in
such order and manner as they may each elect in their absolute discretion, or
(ii) be deposited to the credit of Debtor and held as collateral for the
Obligations or permitted to be used by Debtor in the ordinary course of its
business.
ARTICLE V
Rights of the Agent
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Section 5.1 Power of Attorney. The Debtor hereby irrevocably
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constitutes and appoints the Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the name of the Debtor or in its own name, to
take any and all action and to execute any and all documents and instruments
which the Agent at any time and from time to time deems necessary or desirable
to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, the Debtor hereby gives the Agent the power and
right on behalf of the Debtor and in its own name to do any of the following,
without notice to or the consent of the Debtor, and whether or not an Event of
Default has occurred and is continuing (except as otherwise expressly provided
below).
(i) after the occurrence and during the continuance of an Event
of Default, to demand, xxx for, collect, or receive in the name of the
Debtor or in its own name, any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral and, in
connection therewith, endorse checks, notes, drafts, acceptances, money
orders, documents of title, or any other instruments for the payment of
money under the Collateral or any policy of insurance;
(ii) to pay or discharge taxes or Liens levied or placed on or
threatened against the Collateral;
(iii) after the occurrence and during the continuance of an Event
of Default, to notify post office authorities to change the address for
delivery of mail of the Debtor to an address designated by the Agent and to
receive, open, and dispose of mail addressed to the Debtor;
(iv) (A) after the occurrence and during the continuance of an
Event of Default, to direct account debtors and any other parties liable
for any payment under any of the Collateral to make payment of any and all
monies due and to become due thereunder
BORROWER SECURITY AGREEMENT - Page 10
directly to the Agent or as the Agent shall direct; (B) after the
occurrence and during the continuance of an Event of Default, to receive
payment of and receipt for any and all monies, claims, and other amounts
due and to become due at any time in respect of or arising out of any
Collateral; (C) after the occurrence and during the continuance of an Event
of Default, to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, proxies, stock powers, verifications, and notices in
connection with accounts and other documents relating to the Collateral;
(D) after the occurrence and during the continuance of an Event of Default,
to commence and prosecute any suit, action, or proceeding at law or in
equity in any court of competent jurisdiction to collect the Collateral or
any part thereof and to enforce any other right in respect of any
Collateral; (E) after the occurrence and during the continuance of an Event
of Default, to defend any suit, action, or proceeding brought against the
Debtor with respect to any Collateral; (F) after the occurrence and during
the continuance of an Event of Default, to settle, compromise, or adjust
any suit, action, or proceeding described above and, in connection
therewith, to give such discharges or releases as the Agent may deem
appropriate; (G) to exchange any of the Collateral for other property upon
any merger, consolidation, reorganization, recapitalization, or other
readjustment of the issuer thereof and, in connection therewith, deposit
any of the Collateral with any committee, depositary, transfer agent,
registrar, or other designated agency upon such terms as the Agent may
determine; (H) to add or release any guarantor, indorser, surety, or other
party to any of the Collateral; (I) to renew, extend, or otherwise change
the terms and conditions of any of the Collateral; (J) to make, settle,
compromise, or adjust claims under any insurance policy covering any of the
Collateral; and (K) after the occurrence and during the continuance of an
Event of Default, to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Agent were the absolute owner thereof for all
purposes, and to do, at the Agent's option and the Debtor's expense, at any
time, or from time to time, all acts and things which the Agent deems
necessary to protect, preserve, or realize upon the Collateral and the
Agent's security interest therein.
This power of attorney is a power coupled with an interest and shall be
irrevocable. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to the Agent in this Agreement, and shall not be liable for
any failure to do so or any delay in doing so. The Agent shall not be liable
for any act or omission or for any error of judgment or any mistake of fact or
law in its individual capacity or in its capacity as attorney-in-fact except
acts or omissions resulting from its willful misconduct. This power of attorney
is conferred on the Agent solely to protect, preserve, and realize upon its
security interest in the Collateral. The Agent will exercise its best efforts
to notify Debtor of any action taken by the Agent in its capacity as attorney-
in-fact pursuant to this Section, promptly after such action is taken, provided
that any failure by the Agent to so notify Debtor shall not impose any liability
upon the Agent or affect its rights and remedies hereunder, at law or in equity.
The Agent shall not be responsible for any decline in the value of the
Collateral and shall not be required to take any steps to preserve rights
against prior parties or to protect, preserve, or maintain any security interest
or Lien given to secure the Collateral.
BORROWER SECURITY AGREEMENT - Page 11
Section 5.2 Setoff; Property Held by the Agents and the Banks. If an
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Event of Default shall have occurred and be continuing, the Agent, each Co-Agent
and each Bank shall have the right to set off and apply against the Obligations,
at any time and without notice to the Debtor, any and all deposits (general or
special, time or demand, provisional or final) or other sums at any time
credited by or owing from the Agent, any Co-Agent or any Bank to the Debtor
whether or not the Obligations are then due. As additional security for the
Obligations, the Debtor hereby grants the Agent, each Co-Agent and each Bank a
security interest in all money, instruments, and other property of the Debtor
now or hereafter held by the Agent, any Co-Agent or any Bank, including without
limitation, property held in safekeeping. In addition to the Agent's, any Co-
Agent's or any Bank's right of setoff and as further security for the
Obligations, the Debtor hereby grants the Agent, each Co-Agent and each Bank a
security interest in all deposits (general or special, time or demand,
provisional or final) of the Debtor now or hereafter on deposit with or held by
the Agent, any Co-Agent or any Bank and all other sums at any time credited by
or owing from the Agent, any Co-Agent or any Bank to the Debtor. The rights and
remedies of the Agent, each Co-Agent and each Bank hereunder are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which the Agent, any Co-Agent or any Bank may have.
Section 5.3 Performance by the Agent. If the Debtor shall fail to
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perform any covenant or agreement contained in this Agreement, the Agent may
perform or attempt to perform such covenant or agreement on behalf of the
Debtor. In such event, the Debtor shall, at the request of the Agent, promptly
pay any amount expended by the Agent in connection with such performance or
attempted performance to the Agent, together with interest thereon at the
Default Rate from and including the date of such expenditure to but excluding
the date such expenditure is paid in full. Notwithstanding the foregoing, it is
expressly agreed that the Agent shall not have any liability or responsibility
for the performance of any obligation of the Debtor under this Agreement.
Section 5.4 Subrogation. If any of the Obligations are given in renewal
-----------
or extension or applied toward the payment of indebtedness secured by any Lien,
the Agent, the Co-Agents and the Banks shall be, and are hereby, subrogated to
all of the rights, titles, interests and Liens securing the indebtedness so
renewed, extended, or paid.
Section 5.5 Agent's Duty of Care. Other than the exercise of reasonable
--------------------
care and the physical custody of the Collateral while held by the Agent
hereunder, the Agent shall have no responsibility for or obligation or duty with
respect to all or any part of the Collateral or any matter or proceeding arising
out of or relating thereto, including without limitation any obligation or duty
to collect any sums due in respect thereof or to protect or preserve any rights
against prior parties or any other rights pertaining thereto, it being
understood and agreed that Debtor shall be responsible for preservation of all
rights in the Collateral. Without limiting the generality of the foregoing, the
Agent shall be conclusively deemed to have exercised reasonable care in the
custody of the Collateral if the Agent takes such action, for purposes of
preserving rights in the Collateral, as Debtor may reasonably request in
writing, but no failure or omission or delay by the Agent in complying with any
such request by Debtor, and no refusal by the Agent to comply with any such
request by Debtor, shall be deemed to be a failure to exercise reasonable care.
BORROWER SECURITY AGREEMENT - Page 12
ARTICLE VI
Default
-------
Section 6.1 Rights and Remedies. If an Event of Default shall have
-------------------
occurred and be continuing, the Agent shall have the following rights and
remedies:
(i) In addition to all other rights and remedies granted to the
Agent in this Agreement or in any other Loan Document or by applicable law,
the Agent shall have all of the rights and remedies of a secured party
under the UCC (whether or not the UCC applies to the affected Collateral).
Without limiting the generality of the foregoing, the Agent may (1) without
demand or notice to the Debtor, collect, receive, or take possession of the
Collateral or any part thereof and for that purpose the Agent may enter
upon any premises on which the Collateral is located and remove the
Collateral therefrom or render it inoperable, and/or (2) sell, lease, or
otherwise dispose of the Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at the Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Agent may deem commercially reasonable. The Agent shall have
the right at any public sale or sales, and, to the extent permitted by
applicable law, at any private sale or sales, to bid and become a purchaser
of the Collateral or any part thereof free of any right or equity of
redemption on the part of the Debtor, which right or equity of redemption
is hereby expressly waived and released by the Debtor. Upon the request of
the Agent, the Debtor shall assemble the Collateral and make it available
to the Agent at any place designated by the Agent that is reasonably
convenient to the Debtor and the Agent. The Debtor agrees that the Agent
shall not be obligated to give more than five days written notice of the
time and place of any public sale or of the time after which any private
sale may take place and that such notice shall constitute reasonable notice
of such matters. The Agent shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of Collateral may have been given. The Agent may, without
notice or publication, adjourn any public or private sale or cause the same
to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. The Debtor shall be
liable for all expenses of retaking, holding, preparing for sale, or the
like, and all reasonable attorneys' fees, legal expenses, and all other
costs and expenses incurred by the Agent, any Co-Agent or any Bank in
connection with the collection of the Obligations and the enforcement of
the Agent's rights under this Agreement. The Debtor shall remain liable for
any deficiency if the Proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations in full. The Agent, the
Co-Agents and the Banks may apply the Collateral against the Obligations in
such order and manner as they may elect in their absolute discretion. The
Debtor waives all rights of marshalling, valuation, and appraisal in
respect of the Collateral.
BORROWER SECURITY AGREEMENT - Page 13
(ii) The Agent may cause any or all of the Collateral held by it
to be transferred into the name of the Agent or the name or names of the
Agent's nominee or nominees.
(iii) The Agent may collect or receive all money or property at
any time payable or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so.
(iv) On any sale of the Collateral, the Agent is hereby
authorized to comply with any limitation or restriction with which
compliance is necessary, in the view of the Agent's counsel, in order to
avoid any violation of applicable law or in order to obtain any required
approval of the purchaser or purchasers by any applicable Governmental
Authority.
ARTICLE VII
Miscellaneous
-------------
Section 7.1 No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
the Agent, any Co-Agent or any Bank to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power, or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under this Agreement preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement are
cumulative and not exclusive of any rights and remedies provided by law.
Section 7.2 Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the Debtor and the Agent and their respective
heirs, successors, and assigns, except that the Debtor may not assign any of its
rights or obligations under this Agreement without the prior written consent of
the Agent.
Section 7.3 ENTIRE AGREEMENT; AMENDMENT; CONTROLLING AGREEMENT. THIS
--------------------------------------------------
AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS OF THE PARTIES HERETO. The provisions of this Agreement may be
amended or waived only by an instrument in writing signed by the parties hereto.
In the event any term or provision of this Agreement expressly conflicts with
any term or provision of the Credit Agreement, the terms and provisions of the
Credit Agreement shall govern and control.
Section 7.4 Notices. All notices and other communications provided for
-------
in this Agreement shall be given or made in writing and telecopied, mailed by
certified mail return receipt requested, or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof; or, as to any party at such other address as shall be designated
BORROWER SECURITY AGREEMENT - Page 14
by such party in a notice to the other party given in accordance with this
Section. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telecopy, subject to
telephone confirmation of receipt, or when personally delivered or, in the case
of a mailed notice, when duly deposited in the mails, in each case given or
addressed as aforesaid.
Section 7.5 GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE GOVERNED BY
--------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT HAS BEEN ENTERED
INTO IN DALLAS COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR ALL PURPOSES IN
DALLAS COUNTY, TEXAS.
Section 7.6 Headings. The headings, captions, and arrangements used in
--------
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 7.7 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 7.8 Waiver of Bond. In the event the Agent seeks to take
--------------
possession of any or all of the Collateral by judicial process, the Debtor
hereby irrevocably waives any bonds and any surety or security relating thereto
that may be required by applicable law as an incident to such possession, and
waives any demand for possession prior to the commencement of any such suit or
action.
Section 7.9 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.10 Termination. If all of the Obligations shall have been paid
-----------
and performed in full and all Commitments shall have expired or terminated, the
Agent shall, upon the written request of the Debtor, execute and deliver to the
Debtor a proper instrument or instruments acknowledging the release and
termination of the security interests created by this Agreement, and shall duly
assign and deliver to the Debtor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Agent and has not previously been sold or otherwise applied pursuant to
this Agreement.
Section 7.11 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
--------------------
APPLICABLE LAW, THE DEBTOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE)
BORROWER SECURITY AGREEMENT - Page 15
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE AGENT, ANY CO-AGENT OR
ANY BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
BORROWER SECURITY AGREEMENT - Page 16
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
DEBTOR:
------
CELLSTAR CORPORATION
By:______________________________________________
Xxxx X. Xxxxxxx
Senior Vice President
and Chief Financial Officer
Address for Notices: 0000 Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: General Counsel
AGENT:
-----
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, as Agent
By:______________________________________________
Xxxxx X. Xxxx
Vice President
Address for Notices: 0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxx
BORROWER SECURITY AGREEMENT - Page 17
Schedule 1
Location of Inventory and Equipment
-----------------------------------
Locations of Inventory and Equipment
------------------------------------
having an aggregate Inventory value of $100,000 or more
-------------------------------------------------------
NONE
Locations of Inventory and Equipment
------------------------------------
having an aggregate Inventory value of less than $100,000
---------------------------------------------------------
NONE
SCHEDULE 1, Location of Inventory and Equipment - Solo Page
Schedule 2
Jurisdictions for Filing
UCC-1 Financing Statements
--------------------------
Secretary of State of Texas
Department of State of Florida
Secretary of State of Kansas
Secretary of State of California
Secretary of State of Missouri
Clay County, Missouri
Xxxxxxx County, Missouri
SCHEDULE 2, Jurisdictions for
Filing UCC-1 Financing Statements - Solo Page
Schedule 3
Additional Names and Trade Names
--------------------------------
NONE
SCHEDULE 3, Additional Names
and Trade Names - Solo Page
EXHIBIT F-2
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Guarantor Security Agreement
----------------------------
GUARANTOR SECURITY AGREEMENT
----------------------------
THIS SECURITY AGREEMENT (this "Agreement") dated as of _____________,
---------
19___, is by and among the undersigned debtors (collectively, the "Debtors" and
-------
each a "Debtor"), and Chase Bank of Texas, National Association (formerly known
------
as Texas Commerce Bank National Association), a national banking association
("Chase"), not in its individual capacity but solely as administrative agent for
-----
itself and each of the other banks or lending institutions (each, a "Bank" and,
----
collectively, the "Banks") which is or may from time to time become a signatory
-----
to the Credit Agreement (hereinafter defined) or any successor or permitted
assignee thereof (Chase in such capacity, together with its successors in such
capacity, the "Agent").
-----
R E C I T A L S:
---------------
A. CellStar Corporation, a Delaware corporation (the "Borrower"), the
--------
Agent, The First National Bank of Chicago, as Syndication Agent, National City
Bank, as Documentation Agent, The Chase Manhattan Bank, as Alternate Currency
Agent, and the Banks heretofore entered into that certain Amended and Restated
Credit Agreement dated as of August 2, 1999 (as the same may be amended,
supplemented or modified from time to time, the "Credit Agreement").
----------------
B. Pursuant to the Credit Agreement, the Agent, the Syndication Agent,
the Documentation Agent, the Alternate Currency Agent and the Banks have or may
extend credit to the Borrower.
C. The Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent and the Banks have conditioned their obligations to
extend credit under the Credit Agreement and the effectiveness of the Credit
Agreement upon the execution and delivery by each Debtor of this Agreement.
A G R E E M E N T
- - - - - - - - -
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
Definitions
-----------
Section 1.1. Definitions. As used in this Agreement, the following terms
-----------
have the following meanings:
GUARANTOR SECURITY AGREEMENT - Page 1
"Accounts" means any "account", as such term is defined in Section
--------
9.106 of the UCC, now owned or hereafter acquired by any Debtor, and, in
any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by any Debtor: (a) all rights of
any Debtor to payment for goods sold or leased or services rendered,
whether or not earned by performance, (b) all accounts receivable of any
Debtor, (c) all rights of any Debtor to receive any payment of money or
other form of consideration, (d) all security pledged, assigned, or granted
to or held by any Debtor to secure any of the foregoing, (e) all guaranties
of, or indemnifications with respect to, any of the foregoing, and (f) all
rights of any Debtor as an unpaid seller of goods or services, including,
but not limited to, all rights of stoppage in transit, replevin,
reclamation, and resale.
"Chattel Paper" means any "chattel paper", as such term is defined in
-------------
Section 9.105(a)(2) of the UCC, now owned or hereafter acquired by any
Debtor.
"Collateral" has the meaning specified in Section 2.1 of this
---------- -----------
Agreement.
"Document" means any "document", as such term is defined in Section
--------
9.105(a)(6) of the UCC, now owned or hereafter acquired by any Debtor,
including, without limitation, all documents of title and warehouse
receipts of any Debtor.
"Equipment" means any "equipment", as such term is defined in Section
---------
9.109(2) of the UCC, now owned or hereafter acquired by any Debtor and, in
any event, shall include, without limitation, all machinery, equipment,
furnishings, fixtures, and vehicles now owned or hereafter acquired by any
Debtor and any and all additions, substitutions, and replacements of any of
the foregoing, wherever located, together with all attachments, components,
parts, equipment, and accessories installed thereon or affixed thereto.
"General Intangibles" means any "general intangibles", as such term is
-------------------
defined in Section 9.106 of the UCC, now owned or hereafter acquired by any
Debtor and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by any Debtor: (a) all
patents, patent applications, patent rights, service marks, trademarks,
trade names, trade secrets, intellectual property, registrations, goodwill,
copyrights, franchises, licenses, permits, proprietary information,
customer lists, designs, and inventions of any Debtor, (b) all books,
records, data, plans, manuals, computer software, and computer programs of
any Debtor, (c) all contract rights, partnership interests, joint venture
interests, securities, deposit accounts, investment accounts, and
certificates of deposit of any Debtor, (d) all rights of any Debtor to
payment under letters of credit and similar agreements, (e) all tax refunds
and tax refund claims of any Debtor, (f) all choses in action and causes of
action of any Debtor (whether arising in contract, tort, or otherwise and
whether or not currently in litigation) and all judgments in favor of any
Debtor, (g) all rights
GUARANTOR SECURITY AGREEMENT - Page 2
and claims of any Debtor under warranties and indemnities, and (h) all
rights of any Debtor under any insurance, surety, or similar contract or
arrangement.
"Instrument" means any "instrument", as such term is defined in
----------
Section 9.105(a)(9) of the UCC, now owned or hereafter acquired by any
Debtor.
"Inventory" means any "inventory", as such term is defined in Section
---------
9.109(4) of the UCC, now owned or hereafter acquired by any Debtor, and, in
any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by any Debtor: (a) all goods and
other personal property of any Debtor that are held for sale or lease or to
be furnished under any contract of service, (b) all raw materials, work-in-
process, finished goods, inventory, supplies, and materials of any Debtor,
(c) all wrapping, packaging, advertising, and shipping materials of any
Debtor, (d) all goods that have been returned to, repossessed by, or
stopped in transit by any Debtor, and (e) all Documents evidencing any of
the foregoing.
"Obligations" means:
-----------
(a) the indebtedness, liabilities and obligations of the Borrower to
the Banks evidenced by the Notes, executed by the Borrower and payable to
the order of the Banks, pursuant to the Credit Agreement;
(b) the indebtedness, liabilities and obligations of each Debtor to
the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent and the Banks under the Guaranty executed by each Debtor,
pursuant to the Credit Agreement;
(c) the "Obligations" as such term is defined in the Credit Agreement;
(d) all future Advances by the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent or any Bank to the
Borrower and the Debtors, or any of them;
(e) all costs and expenses, including without limitation all
reasonable attorneys' fees and legal expenses, incurred by the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent or
any Bank to preserve and maintain the Collateral, collect the obligations
herein described and enforce this Agreement;
(f) all other obligations, indebtedness and liabilities of the
Borrower and the Debtors, or any of them, to the Agent, the Syndication
Agent, the Documentation Agent, the Alternate Currency Agent or any Bank
under any of the Loan Documents, now existing or hereafter arising,
regardless of whether such obligations, indebtedness and liabilities are
GUARANTOR SECURITY AGREEMENT - Page 3
similar, dissimilar, related, unrelated, direct, indirect, fixed,
contingent, primary, secondary, joint, several, or joint and several; and
(g) all extensions, renewals and modifications of any of the
foregoing.
"Permitted Liens" means the security interests granted hereby and
---------------
Liens expressly permitted by Section 10.2 of the Credit Agreement.
------------
"Proceeds" means any "proceeds", as such term is defined in Section
--------
9.306 of the UCC and, in any event, shall include, but not be limited to,
(a) any and all proceeds of any insurance, indemnity, warranty, or guaranty
payable to any Debtor from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Debtor from time to time in connection with any
requisition, confiscation, condemnation, seizure, or forfeiture of all or
any part of the Collateral by any Governmental Authority (or any person
acting under color of Governmental Authority), and (c) any and all other
amounts from time to time paid or payable under or in connection with any
of the Collateral.
"UCC" means the Uniform Commercial Code as in effect in the State of
---
Texas or, if so required with respect to any particular Collateral by
mandatory provisions of applicable law, as in effect in the jurisdiction in
which such Collateral is located.
Section 1.2. Terms Defined in Credit Agreement. All capitalized terms
---------------------------------
used and not otherwise defined herein shall have their respective meanings as
specified in the Credit Agreement.
ARTICLE II
Security Interest
-----------------
Section 2.1. Security Interest. As collateral security for the prompt
-----------------
payment and performance in full when due of the Obligations (whether at stated
maturity, by acceleration, or otherwise), each Debtor hereby grants to the
Agent, for the pro rata benefit of the Banks, a first priority lien on and
security interest in all of its personal property, including without limitation
all of its right, title, and interest in and to the following, whether now owned
or hereafter arising or acquired and wherever located (collectively, the
"Collateral"):
----------
(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments;
GUARANTOR SECURITY AGREEMENT - Page 4
(d) all General Intangibles;
(e) all Documents;
(f) all Inventory;
(g) all Equipment; and
(h) all Proceeds and products of any or all of the foregoing.
Without limiting the foregoing, this Agreement secures the payment of all
amounts that constitute part of the Obligations and would be owed by the
Borrower to the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent or any Bank but for the fact that they are
unenforceable or not allowable due to the existence of bankruptcy,
reorganization, or similar proceedings involving the Borrower. If the grant,
pledge, or collateral transfer or assignment of any rights of any Debtor under
any contract included in the Collateral is expressly prohibited by such
contract, then the security interest hereby granted nonetheless remains
effective to the extent allowed by Section 9.318 of the UCC or other applicable
law but is otherwise limited by that prohibition.
Section 2.2. Debtors Remain Liable. Notwithstanding anything to the
---------------------
contrary contained herein, (a) each Debtor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the Agent
of any of its rights hereunder shall not release any Debtor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) neither the Agent, the Syndication Agent, the Documentation
Agent, the Alternate Currency Agent nor any Bank shall have any obligation or
liability under any of the contracts and agreements included in the Collateral
by reason of this Agreement, nor shall the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent or any Bank be obligated to
perform any of the obligations or duties of any Debtor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
ARTICLE III
Representations and Warranties
------------------------------
Each Debtor represents and warrants to the Agent that:
Section 3.1. Title. The Debtors are, and with respect to Collateral
-----
acquired after the date hereof the Debtors will be, the legal and beneficial
owners of their respective Collateral free and clear of any Lien, except
Permitted Liens.
Section 3.2. Accounts. Unless a Debtor has given the Agent written notice
--------
to the contrary, whenever the security interest granted hereunder attaches to an
Account, each Debtor shall be
GUARANTOR SECURITY AGREEMENT - Page 5
deemed to have represented and warranted to the Agent as to each and all of its
Accounts that (a) each Account is genuine and in all respects what it purports
to be, (b) each Account represents the legal, valid, and binding obligation of
the account debtor evidencing indebtedness unpaid and owed by such account
debtor arising out of the performance of labor or services by such Debtor or the
sale or lease of goods by such Debtor, (c) the amount of each Account
represented as owing is the correct amount actually and unconditionally owing
except for normal trade discounts granted in the ordinary course of business,
and (d) to the best of Debtor's knowledge, no Account is subject to any offset,
counterclaim, or other defense.
Section 3.3. Financing Statements. No financing statement, security
--------------------
agreement, or other Lien instrument covering all or any part of the Collateral
is on file in any public office, except those filed in favor of the Agent
pursuant to this Agreement or with respect to any other Permitted Liens. Except
as set forth on Schedule 3 hereto, no Debtor has within the past five years done
----------
business under any name or trade name other than its legal name set forth at the
beginning of this Agreement.
Section 3.4. Principal Place of Business. The principal place of business
---------------------------
and chief executive office of each Debtor, and the office where each Debtor
keeps its books and records, is located at the address specified below the name
of such Debtor on the signature pages hereof.
Section 3.5. Location of Collateral. All Inventory and Equipment of each
----------------------
Debtor are located at the places specified on Schedule 1 hereto. Each Debtor has
----------
exclusive possession and control of its Inventory and Equipment. None of the
Inventory or Equipment of any Debtor is evidenced by a Document (including,
without limitation, a negotiable document of title). All Instruments and Chattel
Paper of each Debtor have been delivered to the Agent.
Section 3.6. Perfection. This Agreement creates a security interest in the
----------
Collateral in favor of the Agent. Upon the filing of UCC financing statements in
favor of the Agent in the jurisdictions listed on Schedule 2 attached hereto,
----------
and upon the Agent's obtaining possession of all Documents and Instruments of
each Debtor, the security interest in favor of the Agent created herein will
constitute a valid and perfected Lien upon and security interest in the
Collateral, subject to no equal or prior Lien, except the Permitted Liens.
Section 3.7. Benefit to Debtors. The value of the consideration received
------------------
and to be received by each Debtor as a result of the Borrower, the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent and the
Banks entering into and obtaining credit under the Credit Agreement and the
Debtors executing and delivering this Agreement is reasonably worth at least as
much as the liability and obligation of such Debtor hereunder, and such
liability and obligation and the Borrower's entering into and obtaining credit
under the Credit Agreement have benefitted and may reasonably be expected to
benefit each Debtor directly and indirectly.
Section 3.8. Credit Agreement. Each and every representation and warranty
----------------
contained in the Credit Agreement is true and correct in all respects.
GUARANTOR SECURITY AGREEMENT - Page 6
ARTICLE IV
Covenants
---------
The Debtors jointly and severally covenant and agree with the Agent that
until the Obligations are paid and performed in full and all Commitments have
terminated:
Section 4.1. Encumbrances. No Debtor shall create, permit, or suffer to
------------
exist, and each Debtor shall defend the Collateral against, any Lien on the
Collateral, except the Permitted Liens, and each Debtor shall defend its rights
in the Collateral and the Agent's security interest in the Collateral against
the claims and demands of all Persons. No Debtor shall do anything to impair the
rights of the Agent in the Collateral.
Section 4.2. Modification of Accounts. Each Debtor shall, in accordance
------------------------
with prudent business practices, endeavor to collect or cause to be collected
from each account debtor under its Accounts, as and when due, any and all
amounts owing under such Accounts. Without the prior written consent of the
Agent, no Debtor shall (a) grant any extension of time for any payment with
respect to any of the Accounts, except for extensions of time granted in the
ordinary course of such Debtor's business for payment with respect to Accounts
not included in the Borrowing Base, (b) compromise, compound, or settle any of
the Accounts for less than the full amount thereof, except for compromise,
compound or settlement in the ordinary course of business of Accounts not
included in the Borrowing Base, (c) release, in whole or in part, any Person
liable for payment thereof, except in connection with settlements permitted by
clause (b) above, (d) allow any credit or discount for payment with respect to
----------
any Account other than trade discounts granted in the ordinary course of
business, or (e) release any Lien or guaranty securing any Account, except in
connection with settlements permitted by clause (b) above.
----------
Section 4.3. Disposition of Collateral. No Debtor shall sell, lease,
-------------------------
assign (by operation of law or otherwise), or otherwise dispose of, or grant any
option with respect to, the Collateral or any part thereof without the prior
written consent of the Agent, except as expressly permitted by the Credit
Agreement.
Section 4.4. Further Assurances. At any time and from time to time, upon
------------------
the request of the Agent, and at the sole expense of the Debtors, each Debtor
shall promptly execute and deliver all such further instruments, agreements, and
documents and take such further action as the Agent may deem necessary or
desirable to preserve and perfect its security interest in the Collateral and
carry out the provisions and purposes of this Agreement. Without limiting the
generality of the foregoing, each Debtor shall (a) execute and deliver to the
Agent such financing statements as the Agent may from time to time require; (b)
deliver and pledge to the Agent all Documents (including, without limitation,
negotiable documents of title) evidencing Inventory or Equipment; (c) deliver
and pledge to the Agent all Instruments and Chattel Paper of such Debtor with
any necessary endorsements; and (d) execute and deliver to the Agent such other
documents, instruments, and agreements as the Agent may require to perfect and
maintain the validity, effectiveness, and priority
GUARANTOR SECURITY AGREEMENT - Page 7
of the Loan Documents and the Liens intended to be created thereby. Each Debtor
authorizes the Agent to file one or more financing or continuation statements,
and amendments thereto, relating to all or any part of the Collateral without
the signature of such Debtor where permitted by law. A carbon, photographic, or
other reproduction of this Agreement or of any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement and
may be filed as a financing statement.
Section 4.5. Risk of Loss; Insurance. The Debtors shall be responsible
-----------------------
for any loss or damage to the Collateral. The Debtors shall, at their own
expense, maintain or cause to be maintained insurance with respect to the
Collateral in such amounts, against such risks, in such form, and with such
insurers as shall be satisfactory to the Agent from time to time. Each policy
for liability insurance shall provide for all losses to be paid on behalf of the
Agent, for the pro rata benefit of the Banks and the Debtor as their interests
may appear. Each policy for property insurance shall contain loss payable
clauses and a loss payable endorsement in favor of the Agent, for the pro rata
benefit of the Banks, as its interest may appear. If the Debtors shall fail to
maintain or cause to be maintained the insurance required by this Agreement, the
Agent shall have the right (but shall be under no obligation) to obtain such
insurance and the Debtors jointly and severally agree to reimburse the Agent for
all costs and expenses incurred by the Agent in obtaining such insurance. All
such insurance shall provide that no cancellation, reduction in amount, or
change in coverage thereof shall be effective unless the Agent has received 30
days prior written notice thereof. The Debtors shall deliver to the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent and
each Bank copies of all insurance policies required by this Agreement.
Section 4.6. Inspection Rights. Each Debtor shall permit the Agent, each
-----------------
Bank and their respective representatives to examine, inspect, and audit the
Collateral and to examine, inspect, and copy such Debtor's books and records at
any reasonable time and as often as the Agent or any such Bank may desire during
normal business hours. The Agent and each Bank may at any time and from time to
time contact account debtors and other obligors to verify the existence,
amounts, and terms of any Debtor's Accounts.
Section 4.7. Mortgagee's and Landlord's Agreements. With respect to each
-------------------------------------
location of Inventory having an aggregate value of $100,000 or more, as
specified on Schedule 1 hereto, each Debtor shall cause each mortgagee of real
----------
property owned by such Debtor and each landlord of real property leased by such
Debtor who has not previously done so to execute and deliver to the Agent, on or
before the date hereof, instruments satisfactory in form and substance to the
Agent by which such mortgagee or landlord waives its rights, if any, in the
Collateral (each, a "Landlord's Agreement"). After the date hereof, each Debtor
--------------------
shall promptly deliver or cause to be delivered to the Agent Landlord's
Agreements in accordance with this Section for each location where the Inventory
hereafter has an aggregate value of $100,000 or more. At the request of the
Agent, each Debtor shall promptly deliver or cause to be delivered Landlord's
Agreements for any locations where any Collateral may now or hereafter be
located.
GUARANTOR SECURITY AGREEMENT - Page 8
Section 4.8. Corporate Changes. No Debtor shall change its name, identity,
-----------------
or corporate structure in any manner that might make any financing statement
filed in connection with this Agreement seriously misleading unless such Debtor
shall have given the Agent 30 days prior written notice thereof and shall have
taken all action deemed necessary or desirable by the Agent to make each
financing statement not seriously misleading. No Debtor shall change its
principal place of business, chief executive office, or the place where it keeps
its books and records unless it shall have given the Agent 30 days prior written
notice thereof and shall have taken all action deemed necessary or desirable by
the Agent to cause its security interest in the Collateral to be perfected with
the priority required by this Agreement.
Section 4.9. Books and Records; Information. The Debtors shall keep
------------------------------
accurate and complete books and records of the Collateral and the Debtors'
business and financial condition in accordance with GAAP. Each Debtor shall from
time to time at the request of the Agent deliver to the Agent such information
regarding the Collateral and such Debtor as the Agent may request, including,
without limitation, lists and descriptions of the Collateral and evidence of the
identity and existence of the Collateral. Each Debtor shall xxxx its books and
records to reflect the security interest of the Agent under this Agreement.
Section 4.10. Equipment and Inventory.
-----------------------
(a) The Debtors shall keep the Equipment and Inventory at the
locations specified on Schedule 1 hereto or, upon 30 days prior written
----------
notice to the Agent, at such other places within the United States of
America where all action required to perfect the Agent's security interest
in the Equipment and Inventory with the priority required by this Agreement
shall have been taken.
(b) The Debtors shall maintain the Equipment and Inventory in good
condition and repair (ordinary wear and tear excepted). None of the Debtors
shall permit any waste or destruction of the Equipment or Inventory or any
part thereof. None of the Debtors shall permit the Equipment or Inventory
to be used in violation of any law, rule, or regulation or inconsistently
with the terms of any policy of insurance. None of the Debtors shall use or
permit any of the Equipment or Inventory to be used in any manner or for
any purpose that would impair its value or expose it to unusual risk.
Section 4.11. Warehouse Receipts Non-Negotiable. Each Debtor agrees that
---------------------------------
if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued in respect of any of the Collateral, such warehouse receipt or receipt in
the nature thereof shall not be "negotiable" (as such term is used in Section
7.104 of the UCC as in effect in any relevant jurisdiction or under relevant
law).
Section 4.12. Notification. The Debtors shall promptly, and in any event
------------
within five days after any Debtor obtains knowledge or becomes aware of any of
the following, notify the Agent of (a) any Lien or claim that has attached to or
been made or asserted against any of the Collateral, (b)
GUARANTOR SECURITY AGREEMENT - Page 9
any material damage to or loss of any of the Collateral, (c) the occurrence of
any other event that could have a material adverse effect on the Collateral or
the security interest created hereunder, and (d) the occurrence or existence of
any Default.
Section 4.13. Collection of Accounts. Except as otherwise provided in
----------------------
this Section, the Debtors shall have the right to collect and receive payments
on the Accounts. In connection with such collections, the Debtors may take
(and, at the Agent's direction, shall take) such actions as the Debtors or the
Agent may deem necessary or advisable to enforce collection of the Accounts. At
any time, if an Event of Default shall have occurred and be continuing, the
Agent shall have the right to, or upon the request of the Agent the Debtors
shall, instruct all account debtors and other Persons obligated in respect of
the Accounts to make all payments on the Accounts either (a) directly to the
Agent (by instructing that such payments be remitted to a post office box which
shall be in the name and under the control of the Agent), or (b) to one or more
other banks in the United States of America (by instructing that such payments
be remitted to a post office box which shall be in the name or under the control
of the Agent) under arrangements in form and substance satisfactory to the Agent
pursuant to which the Debtors shall have irrevocably instructed such other bank
(and such other bank shall have agreed) to remit all such payments directly to
the Agent. In addition to the foregoing, each Debtor agrees that if any
Proceeds of any Collateral (including payments made in respect of Accounts)
shall be received by such Debtor while an Event of Default exists, such Debtor
shall promptly deliver such Proceeds to the Agent, for the pro rata benefit of
the Banks, with any necessary endorsements. Until such Proceeds are delivered to
the Agent, such Proceeds shall be held in trust by such Debtor for the benefit
of the Agent and shall not be commingled with any other funds or property of any
Debtor. All Proceeds of Collateral received by the Agent pursuant to this
Section may at the option of the Required Banks in the exercise of their
absolute discretion, (i) be applied by the Agent and the Banks to their
respective Obligations in such order and manner as they may elect in their
absolute discretion, or (ii) be deposited to the credit of any Debtor and held
as collateral for the Obligations or permitted to be used by such Debtor in the
ordinary course of its business.
ARTICLE V
Rights of the Agent
-------------------
Section 5.1. Power of Attorney. Each Debtor hereby irrevocably
-----------------
constitutes and appoints the Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the name of such Debtor or in its own name,
to take any and all action and to execute any and all documents and instruments
which the Agent at any time and from time to time deems necessary or desirable
to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, each Debtor hereby gives the Agent the power and
right on behalf of such Debtor and in its own name to do any of the following,
without notice to or the consent of such Debtor and whether or not an Event of
Default has occurred and is continuing (except as otherwise expressly provided
below).
GUARANTOR SECURITY AGREEMENT - Page 10
(i) after the occurrence and during the continuance of an Event
of Default, to demand, xxx for, collect, or receive in the name of any
Debtor or in its own name, any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral and, in
connection therewith, endorse checks, notes, drafts, acceptances, money
orders, documents of title, or any other instruments for the payment of
money under the Collateral or any policy of insurance;
(ii) to pay or discharge taxes or Liens levied or placed on or
threatened against the Collateral;
(iii) after the occurrence and during the continuance of an Event
of Default, to notify post office authorities to change the address for
delivery of mail of any Debtor to an address designated by the Agent and to
receive, open, and dispose of mail addressed to any Debtor;
(iv) (A) after the occurrence and during the continuance of an
Event of Default, to direct account debtors and any other parties liable
for any payment under any of the Collateral to make payment of any and all
monies due and to become due thereunder directly to the Agent or as the
Agent shall direct; (B) after the occurrence and during the continuance of
an Event of Default, to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any time in
respect of or arising out of any Collateral; (C) after the occurrence and
during the continuance of an Event of Default, to sign and endorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, proxies, stock powers,
verifications, and notices in connection with accounts and other documents
relating to the Collateral; (D) after the occurrence and during the
continuance of an Event of Default, to commence and prosecute any suit,
action, or proceeding at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce
any other right in respect of any Collateral; (E) after the occurrence and
during the continuance of an Event of Default, to defend any suit, action,
or proceeding brought against any Debtor with respect to any Collateral;
(F) after the occurrence and during the continuance of an Event of Default,
to settle, compromise, or adjust any suit, action, or proceeding described
above and, in connection therewith, to give such discharges or releases as
the Agent may deem appropriate; (G) to exchange any of the Collateral for
other property upon any merger, consolidation, reorganization,
recapitalization, or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Collateral with any committee,
depositary, transfer agent, registrar, or other designated agency upon such
terms as the Agent may determine; (H) to add or release any guarantor,
indorser, surety, or other party to any of the Collateral; (I) to renew,
extend, or otherwise change the terms and conditions of any of the
Collateral; (J) to make, settle, compromise, or adjust claims under any
insurance policy covering any of the Collateral; and (K) after the
occurrence and during the continuance of an Event of Default, to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Agent were the
absolute owner thereof
GUARANTOR SECURITY AGREEMENT - Page 11
for all purposes, and to do, at the Agent's option and the Debtors'
expense, at any time, or from time to time, all acts and things which the
Agent deems necessary to protect, preserve, or realize upon the Collateral
and the Agent's security interest therein.
This power of attorney is a power coupled with an interest and shall be
irrevocable. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to the Agent in this Agreement, and shall not be liable for
any failure to do so or any delay in doing so. The Agent shall not be liable
for any act or omission or for any error of judgment or any mistake of fact or
law in its individual capacity or in its capacity as attorney-in-fact except
acts or omissions resulting from its willful misconduct. This power of attorney
is conferred on the Agent solely to protect, preserve, and realize upon its
security interest in the Collateral. The Agent shall not be responsible for any
decline in the value of the Collateral and shall not be required to take any
steps to preserve rights against prior parties or to protect, preserve, or
maintain any security interest or Lien given to secure the Collateral.
Section 5.2. Setoff; Property Held by the Agent and the Banks. If an
------------------------------------------------
Event of Default shall have occurred and be continuing, the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent and
each Bank shall have the right to set off and apply against the Obligations, at
any time and without notice to any Debtor, any and all deposits (general or
special, time or demand, provisional or final) or other sums at any time
credited by or owing from the Agent, the Syndication Agent, the Documentation
Agent, the Alternate Currency Agent or any Bank to such Debtor whether or not
the Obligations are then due. As additional security for the Obligations, each
Debtor hereby grants the Agent, the Syndication Agent, the Documentation Agent,
the Alternate Currency Agent and each Bank a security interest in all money,
instruments, and other property of such Debtor now or hereafter held by the
Agent, the Syndication Agent, the Documentation Agent, the Alternate Currency
Agent or any Bank, including without limitation, property held in safekeeping.
In addition to the Agent's, the Syndication Agent's, the Documentation Agent's,
the Alternate Currency Agent's or any Bank's right of setoff and as further
security for the Obligations, each Debtor hereby grants the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent and
each Bank a security interest in all deposits (general or special, time or
demand, provisional or final) of such Debtor now or hereafter on deposit with or
held by the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent or any Bank and all other sums at any time credited by or owing
from the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent or any Bank to such Debtor. The rights and remedies of the
Agent, the Syndication Agent, the Documentation Agent, the Alternate Currency
Agent and each Bank hereunder are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent or any
Bank may have.
Section 5.3. Performance by the Agent. If any Debtor shall fail to
------------------------
perform any covenant or agreement contained in this Agreement, the Agent may
perform or attempt to perform such covenant or agreement on behalf of such
Debtor. In such event, the Debtors shall, at the request of the Agent, promptly
pay any amount expended by the Agent in connection with such performance
GUANRANTOR SECURITY AGREEMENT - Page 12
or attempted performance to the Agent, together with interest thereon at the
Default Rate from and including the date of such expenditure to but excluding
the date such expenditure is paid in full. Notwithstanding the foregoing, it is
expressly agreed that the Agent shall not have any liability or responsibility
for the performance of any obligation of any Debtor under this Agreement.
Section 5.4. Subrogation. If any of the Obligations are given in renewal
-----------
or extension or applied toward the payment of indebtedness secured by any Lien,
Agent, the Syndication Agent, the Documentation Agent, the Alternate Currency
Agent and the Banks shall be, and are hereby, subrogated to all of the rights,
titles, interests and Liens securing the indebtedness so renewed, extended, or
paid.
Section 5.5. Agent's Duty of Care. Other than the exercise of reasonable
--------------------
care and the physical custody of the Collateral while held by the Agent
hereunder, the Agent shall have no responsibility for or obligation or duty with
respect to all or any part of the Collateral or any matter or proceeding arising
out of or relating thereto, including without limitation any obligation or duty
to collect any sums due in respect thereof or to protect or preserve any rights
against prior parties or any other rights pertaining thereto, it being
understood and agreed that each Debtor shall be responsible for preservation of
all rights in the Collateral. Without limiting the generality of the foregoing,
the Agent shall be conclusively deemed to have exercised reasonable care in the
custody of the Collateral if the Agent takes such action, for purposes of
preserving rights in the Collateral, as any Debtor may reasonably request in
writing, but no failure or omission or delay by the Agent in complying with any
such request by any Debtor, and no refusal by the Agent to comply with any such
request by any Debtor, shall be deemed to be a failure to exercise reasonable
care.
ARTICLE VI
Default
-------
Section 6.1. Rights and Remedies. If an Event of Default shall have
-------------------
occurred and be continuing, the Agent shall have the following rights and
remedies:
(i) In addition to all other rights and remedies granted to the
Agent in this Agreement or in any other Loan Document or by applicable law,
the Agent shall have all of the rights and remedies of a secured party
under the UCC (whether or not the UCC applies to the affected Collateral).
Without limiting the generality of the foregoing, the Agent may (1) without
demand or notice to any Debtor, collect, receive, or take possession of the
Collateral or any part thereof and for that purpose the Agent may enter
upon any premises on which the Collateral is located and remove the
Collateral therefrom or render it inoperable, and/or (2) sell, lease, or
otherwise dispose of the Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at the Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Agent may deem commercially reasonable. The Agent shall have
the right at any public sale or sales, and, to the extent permitted by
applicable law, at any private sale or sales, to bid and become a
GUARANTOR SECURITY AGREEMENT - Page 13
purchaser of the Collateral or any part thereof free of any right or equity
of redemption on the part of any Debtor, which right or equity of
redemption is hereby expressly waived and released by each Debtor. Upon the
request of the Agent, each Debtor shall assemble the Collateral and make it
available to the Agent at any place designated by the Agent that is
reasonably convenient to such Debtor and the Agent. Each Debtor agrees that
the Agent shall not be obligated to give more than five days written notice
of the time and place of any public sale or of the time after which any
private sale may take place and that such notice shall constitute
reasonable notice of such matters. The Agent shall not be obligated to make
any sale of Collateral if it shall determine not to do so, regardless of
the fact that notice of sale of Collateral may have been given. The Agent
may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the
time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. The
Debtors shall be jointly and severally liable for all expenses of retaking,
holding, preparing for sale, or the like, and all attorneys' fees, legal
expenses, and all other costs and expenses incurred by the Agent in
connection with the collection of the Obligations and the enforcement of
the Agent's rights under this Agreement. The Debtors shall remain liable
for any deficiency if the Proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations in full. The Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent
and the Banks may apply the Collateral against the Obligations in such
order and manner as the Agent may elect in its sole discretion. Each Debtor
waives all rights of marshalling, valuation, and appraisal in respect of
the Collateral.
(ii) The Agent may cause any or all of the Collateral held by it to
be transferred into the name of the Agent or the name or names of the
Agent's nominee or nominees.
(iii) The Agent may collect or receive all money or property at any
time payable or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so.
(iv) On any sale of the Collateral, the Agent is hereby authorized
to comply with any limitation or restriction with which compliance is
necessary, in the view of the Agent's counsel, in order to avoid any
violation of applicable law or in order to obtain any required approval of
the purchaser or purchasers by any applicable Governmental Authority.
ARTICLE VII
Miscellaneous
-------------
Section 7.1. Expenses. The Debtors hereby jointly and severally agree
--------
to pay on demand: (a) all reasonable costs and out-of-pocket expenses of the
Agent in connection with the preparation, negotiation, execution, and delivery
of this Agreement and the other Loan Documents and any and
GUARANTOR SECURITY AGREEMENT - Page 14
all amendments, modifications, renewals, extensions, and supplements thereof and
thereto, including, without limitation, the reasonable fees and expenses of
legal counsel for the Agent, (b) all costs and out-of-pocket expenses of the
Agent and the Banks, or any of them in connection with any Default and the
enforcement of this Agreement or any other Loan Document, including, without
limitation, the reasonable fees and expenses of legal counsel for the Agent and
the Banks, or any of them, (c) all transfer, stamp, documentary, or other
similar taxes, assessments, or charges levied by any Governmental Authority in
respect of this Agreement or any of the other Loan Documents, (d) all reasonable
costs, out-of-pocket expenses, assessments, and other charges incurred in
connection with any filing, registration, recording, or perfection of any
security interest or Lien contemplated by this Agreement or any other Loan
Document, and (e) all other reasonable costs and out-of-pocket expenses incurred
by the Agent in connection with this Agreement or any other Loan Document,
including, without limitation, all fees, costs, out-of-pocket expenses, and
other charges incurred in connection with performing or obtaining any audit or
appraisal in respect of the Collateral.
Section 7.2. INDEMNIFICATION. THE DEBTORS HEREBY JOINTLY AND SEVERALLY
---------------
AGREE TO INDEMNIFY THE AGENT, THE SYNDICATION AGENT, THE DOCUMENTATION AGENT,
THE ALTERNATE CURRENCY AGENT AND EACH BANK AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AGENTS, AND PARTICIPANTS
FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, INTEREST, EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES), AND AMOUNTS PAID IN SETTLEMENT TO WHICH
ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE
TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY THE BORROWER OR ANY DEBTOR
OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY
OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL,
REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR
AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWER, ANY DEBTOR OR ANY
SUBSIDIARY, (E) THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT, (F) ANY AND ALL
TAXES, LEVIES, DEDUCTIONS, AND CHARGES IMPOSED ON THE AGENT OR ANY BANK OR ANY
OF THEIR RESPECTIVE CORRESPONDENTS IN RESPECT OF ANY LETTER OF CREDIT, OR (G)
ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
RELATING TO ANY OF THE FOREGOING; PROVIDED, HOWEVER THAT NO PERSON TO BE
-------- -------
INDEMNIFIED HEREUNDER SHALL HAVE THE RIGHT TO BE INDEMNIFIED FOR ITS OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITING ANY PROVISION OF THIS
AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT EACH
GUARANTOR SECURITY AGREEMENT - Page 15
PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD
HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES)
ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH
PERSON.
Section 7.3. Limitation of Liability. None of the Agent, the
-----------------------
Syndication Agent, the Documentation Agent, the Alternate Currency Agent, any
Bank, or any Affiliate, officer, director, employee, attorney, or agent thereof
shall have any liability with respect to, and each Debtor hereby waives,
releases, and agrees not to xxx any of them upon, any claim for any special,
indirect, incidental, or consequential damages suffered or incurred by such
Debtor in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. Each Debtor
hereby waives, releases, and agrees not to xxx the Agent, the Syndication Agent,
the Documentation Agent, the Alternate Currency Agent or any Bank or any of
their respective Affiliates, officers, directors, employees, attorneys, or
agents for punitive damages in respect of any claim in connection with, arising
out of, or in any way related to, this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents.
Section 7.4. No Fiduciary Relationship. The relationship between each
-------------------------
Debtor and each Bank with respect to the Loan Documents and the transactions
governed thereby is solely that of debtor and creditor, and neither the Agent,
the Syndication Agent, the Documentation Agent, the Alternate Currency Agent nor
any Bank has any fiduciary or other special relationship with any Debtor with
respect to the Loan Documents and the transactions governed thereby, and no term
or condition of any of the Loan Documents shall be construed so as to deem the
relationship between the Debtor and any Bank with respect to the Loan Documents
and the transactions governed thereby to be other than that of debtor and
creditor.
Section 7.5. No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
the Agent or any Bank to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement are
cumulative and not exclusive of any rights and remedies provided by law.
Section 7.6. Successors and Assigns; Parties Bound. This Agreement
-------------------------------------
shall be binding upon and inure to the benefit of the Debtors and the Agent and
their respective heirs, successors, and assigns, except that the Debtors may not
assign any of their rights or obligations under this Agreement without the prior
written consent of the Agent. The Debtors' obligations and agreements hereunder
are joint and several. The provisions of this Agreement shall apply to each
Debtor, individually and collectively.
GUARANTOR SECURITY AGREEMENT - Page 16
Section 7.7. ENTIRE AGREEMENT; AMENDMENT; CONTROLLING AGREEMENT. THIS
--------------------------------------------------
AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement may be
amended or waived only by an instrument in writing signed by the parties hereto.
In the event any term or provision of this Agreement expressly conflicts with
any term or provision of the Credit Agreement, the terms and provisions of the
Credit Agreement shall govern and control.
Section 7.8. Notices. All notices and other communications provided for
-------
in this Agreement shall be given or made in writing and telecopied, mailed by
certified mail return receipt requested, or delivered to the intended recipient
at the address specified below its name on the signature pages hereof; or, as to
any party at such other address as shall be designated by such party in a notice
to the other party given in accordance with this Section. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopy, subject to telephone confirmation of
receipt, or when personally delivered or, in the case of a mailed notice, when
duly deposited in the mails, in each case given or addressed as aforesaid.
Section 7.9. GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE GOVERNED BY
--------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT HAS BEEN ENTERED
INTO IN DALLAS COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR ALL PURPOSES IN
DALLAS COUNTY, TEXAS.
Section 7.10. Headings. The headings, captions, and arrangements used
--------
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 7.11. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made in this Agreement shall survive the
execution and delivery of this Agreement, and no investigation by the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent or any
Bank shall affect the representations and warranties of any Debtor herein or the
right of the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent or any Bank to rely upon them.
Section 7.12. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 7.13. Waiver of Bond. In the event the Agent seeks to take
--------------
possession of any or all of the Collateral by judicial process, each Debtor
hereby irrevocably waives any bonds and any surety or security relating thereto
that may be required by applicable law as an incident to such
GUANRANTOR SECURITY AGREEMENT - Page 17
possession, and waives any demand for possession prior to the commencement of
any such suit or action.
Section 7.14. Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.15. Termination. If all of the Obligations shall have
-----------
been paid and performed in full and all Commitments shall have expired or
terminated, the Agent shall, upon the written request of the Borrower, execute
and deliver to the Debtors a proper instrument or instruments acknowledging the
release and termination of the security interests created by this Agreement, and
shall duly assign and deliver to the Debtors (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Agent and has not previously been sold or otherwise applied pursuant to
this Agreement.
Section 7.16. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
--------------------
APPLICABLE LAW, EACH DEBTOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY
OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF
THE AGENT, THE SYNDICATION AGENT, THE DOCUMENTATION AGENT, THE ALTERNATE
CURRENCY AGENT OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT
THEREOF.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
GUANRANTOR SECURITY AGREEMENT - Page 18
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
DEBTORS:
-------
_____________________________________,
a ______________________
By:__________________________________
Name:_____________________________
Title:____________________________
Address: 0000 Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Phone No.: (000) 000-0000
Attention: General Counsel
GUANRANTOR SECURITY AGREEMENT - Page 19
AGENT:
-----
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, as Agent
By:______________________________________
Name:__________________________________
Title:_________________________________
Address for Notices: 0000 Xxxx Xxxxxx
Xxxx Xxxxxx Xxx 000000
Xxxxxx, Xxxxx 00000-0000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxx
GUARANTOR SECURITY AGREEMENT - Page 20
Schedule 1
Location of Inventory and Equipment
-----------------------------------
Locations of Inventory and Equipment
------------------------------------
having an aggregate Inventory value of $100,000 or more
-------------------------------------------------------
Debtor Locations
------ ---------
Locations of Inventory and Equipment
------------------------------------
having an aggregate Inventory value of less than $100,000
---------------------------------------------------------
Debtor Locations
------ ---------
SCHEDULE 1, Chief Executive Offices - Solo Page
Schedule 2
Jurisdictions for Filing
UCC-1 Financing Statements
--------------------------
Debtor Jurisdiction
------ ------------
SCHEDULE 2, Jurisdictions for Filing UCC-1 Financing Statements - Solo Page
Schedule 3
Trade Names and Previous Names
------------------------------
Debtor Trade Names Previous Names
------ ----------- --------------
SCHEDULE 3, Trade Names and Previous Names - Solo Page
EXHIBIT G
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Form of Pledge Agreement
------------------------
PLEDGE AGREEMENT
----------------
THIS PLEDGE AGREEMENT (this "Agreement") dated as of ___________________,
---------
199___, is by and between _____________________________, a __________
corporation (the "Pledgor"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
-------
(formerly known as Texas Commerce Bank National Association), a national banking
association ("Chase"), not in its individual capacity but solely as
-----
administrative agent for itself and each of the other banks or lending
institutions (each, a "Bank" and collectively, the "Banks") which is or may from
---- -----
time to time become a signatory to the Credit Agreement (hereinafter defined) or
any successor or permitted assignee thereof (Chase in such capacity, together
with its successors in such capacity, the "Agent").
-----
R E C I T A L S:
- - - - - - - -
A. CellStar Corporation, a Delaware corporation (the "Borrower"), the
--------
Agent, The First National Bank of Chicago, as Syndication Agent, National City
Bank, as the Documentation Agent, The Chase Manhattan Bank, as Alternate
Currency Agent, and the Banks are parties to that certain Amended and Restated
Credit Agreement dated as of August 2, 1999 (as the same may be amended,
supplemented or modified from time to time, the "Credit Agreement").
----------------
B. As a condition to the Credit Agreement, the Pledgor is required to
execute and deliver this Agreement.
A G R E E M E N T:
- - - - - - - - -
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
Security Interest and Pledge
----------------------------
Section 1.1 Terms Defined in Credit Agreement. All capitalized terms used
---------------------------------
and not otherwise defined herein shall have their respective meanings as
specified in the Credit Agreement.
Section 1.2 Security Interest and Pledge. Subject to the terms of this
----------------------------
Agreement, Pledgor hereby pledges and grants to the Agent, for the pro rata
benefit of the Banks, a first priority security interest in the following
property whether now owned or hereafter acquired by Pledgor (such property being
hereinafter sometimes called the "Collateral"):
----------
[(a) All of Pledgor's rights, titles and interests (whether legal,
equitable or beneficial) but not obligations or liabilities (collectively,
the "Partnership Interest") as a
--------------------
PLEDGE AGREEMENT - Page 1
[limited partner/general partner] of ____________________________, a Texas
limited partnership (the "Partnership"), and all of Pledgor's rights,
-----------
titles and interests in, to and under that certain partnership agreement
forming the Partnership by and between Pledgor and ____________, including,
without limitation, the Pledgor's undivided interest in partnership
properties and assets and any and all rights to receive distributions,
whether in cash or in kind, draws, proceeds, income, or any other payment
of any nature whatsoever, or assignment or conveyance of undivided
interests in assets, whether real or personal, made or required to be made
with respect to the Partnership Interest, whether upon dissolution or
termination of the Partnership or otherwise, including without limitation
all interests of Pledgor in all payments, gross receipts, accounts,
accounts receivable, notes and other rights to the payment of money and all
property and assets of the Partnership, together with any and all evidence
of the Partnership Interest and any and all certificates, options, rights,
or other interests or distributions issued in addition to, in substitution
or exchange for, or on account of, the Partnership Interest, and any and
all exchanges and substitutions for, increases, products and proceeds of
the foregoing, all of the foregoing whether now owned or hereafter acquired
by Pledgor;]
[(b) All present and future issued and outstanding shares of
capital stock or other equity or investment securities issued by
____________, now owned or hereafter acquired by Pledgor, including without
limitation _____ shares of common capital stock of ____________ evidenced
by certificate number _____;]
[(c) (i) 65% of all present and future issued and outstanding
shares of voting capital stock or other voting equity or investment
securities issued by ________________ __________, a ____________
corporation ("____________"), now owned or hereafter acquired by Pledgor,
including without limitation _________ shares of common capital stock of
____________ evidenced by certificate no. _____, and (ii) 100% of all
present and future issued and outstanding shares of non-voting preferred
stock or other non-voting equity or investment securities issued by
____________, now owned or hereafter acquired by Pledgor;]
[CellStar International:
(d) _______ shares of Hong Kong Dollar one each representing 65%
of all present issued share capital of CellStar (Asia) Corporation Ltd., a
Hong Kong corporation ("CellStar Asia");]
-------------
(e) All present and future issued and outstanding shares of capital
stock or other equity or investment securities issued by any Subsidiary of
Pledgor not named above, except Foreign Subsidiaries and holding companies
of Foreign Subsidiaries, now owned or hereafter acquired by Pledgor;
PLEDGE AGREEMENT - Page 2
(f) All present and future issued and outstanding shares of non-
voting capital stock or other non-voting equity or investment securities
issued by any Subsidiary of Pledgor not named above which is a holding
company of any Foreign Subsidiary, now owned or hereafter acquired by
Pledgor;
(g) 65% of all present and future issued and outstanding shares of
voting capital stock or other voting equity or investment securities issued
by any Subsidiary of Pledgor not named above which is a holding company of
any Foreign Subsidiary, now owned or hereafter acquired by Pledgor;
(h) All present and future increases, profits, combinations,
reclassifications of, and substitutes and replacements for, all or part of
the foregoing, and all present and future accounts, contract rights,
general intangibles, chattel paper, documents, instruments, cash and
noncash proceeds, and other rights arising from or by virtue of, or from
the voluntary or involuntary sale, lease, or other disposition of, or
collections with respect to, all or any part of the foregoing; and
(i) All products, proceeds, revenues, distributions, dividends,
stock dividends, securities, and other property, rights, and interests that
Pledgor receives or is at any time entitled to receive on account of any of
the foregoing.
Section 1.3 Obligations. The security interest granted, ratified and
-----------
confirmed hereby is to secure the payment or performance of the following
obligations, indebtedness, and liabilities of Pledgor, now existing or hereafter
arising (all of such obligations, indebtedness, and liabilities being
hereinafter sometimes called the "Obligations"):
-----------
(a) the indebtedness, liabilities and obligations of Borrower to
the Banks evidenced by the Notes, executed by Borrower and payable to the
order of the Banks, pursuant to the Credit Agreement;
(b) the indebtedness, liabilities and obligations of Pledgor to
the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent and the Banks under that certain Guaranty dated
____________, 199___ executed by the Pledgor and the other guarantors named
therein in favor of the Agent, the Syndication Agent, the Documentation
Agent, the Alternate Currency Agent and the Banks;
(c) the indebtedness, liabilities and obligations of the Borrower
to the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent and the Banks pursuant to the Credit Agreement;
(d) all of the "Obligations," as such term is defined in the
Credit Agreement;
(e) all future Advances by the Agent or any Bank to the Borrower;
PLEDGE AGREEMENT - Page 3
(f) all costs and expenses, including without limitation all
reasonable attorneys' fees and legal expenses, incurred by the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent or
any Bank to preserve and maintain the Collateral, collect the obligations
herein described and enforce this Agreement;
(g) all other obligations, indebtedness and liabilities of Pledgor
to the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent or any Bank under any of the Loan Documents, now existing or
hereafter arising, regardless of whether such obligations, indebtedness and
liabilities are similar, dissimilar, related, unrelated, direct, indirect,
fixed, contingent, primary, secondary, joint, several, or joint and
several; and
(h) all extensions, renewals and modifications of any of the
foregoing.
Without limiting the foregoing, this Agreement secures the payment of all
amounts that constitute part of the obligations and would be owed by the
Borrower to the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent or any Bank but for the fact that they are
unenforceable or not allowable due to the existence of bankruptcy,
reorganization, or similar proceedings involving the Borrower.
ARTICLE II
Representations and Warranties
------------------------------
Pledgor represents and warrants to the Agent that:
Section 2.1 Title. Pledgor owns, and with respect to Collateral acquired
-----
after the date hereof, Pledgor will own, legally and beneficially, the
Collateral free and clear of any Lien or claim or any right or option on the
part of any Person to purchase or otherwise acquire the Collateral or any part
thereof. The Collateral is not subject to any restriction on transfer or
assignment except for (a) compliance with applicable federal and state
securities laws and regulations promulgated thereunder[, and (b) with regard to
stock of CWI, that certain Shareholders Agreement dated as of January 22, 1996,
among CWI, CPD, Inc., Pledgor and the other Shareholders (as defined therein)]
[CellStar International: , and (c) prior approval of the directors of CellStar
Asia as required by its Articles of Association, which approval has been
completed for the transfer of the Collateral to the Agent]. Pledgor has the
unrestricted right to pledge the Collateral as contemplated hereby. All of the
Collateral has been duly and validly issued and is fully paid and nonassessable.
[Pledgor is the sole general partner of the Partnership.]
Section 2.2 Organization and Authority. Pledgor is a corporation duly
--------------------------
organized, validly existing, and in good standing under the laws of its state of
incorporation. Pledgor has the corporate power and authority to execute,
deliver, and perform this Agreement, and the execution, delivery, and
performance of this Agreement by Pledgor have been duly authorized by all
necessary corporate action on the part of Pledgor and do not and will not
violate or conflict with the certificate/articles
PLEDGE AGREEMENT - Page 4
of incorporation or bylaws of Pledgor or any law, rule or regulation or any
order, writ, injunction, or decree of any Governmental Authority or arbitrator
and do not and will not conflict with, result in a breach of, or constitute a
default under the provisions of any agreement or instrument to which Pledgor is
a party or by which Pledgor or any of its property is bound or subject.
Section 2.3 Financing Statements. No financing statement covering any of
--------------------
the Collateral or its proceeds, except financing statements naming the Agent as
secured party, is on file in any public office. So long as any amount remains
unpaid on any Obligations or the Agent has any Commitment, Pledgor will not
execute or file, or consent to or permit the filing of, any such financing
statement or statements in any public office, except the financing statement
filed or to be filed with respect to the security interest hereby granted.
Section 2.4 Principal Place of Business. The principal place of business
---------------------------
and chief executive office of Pledgor, and the office where Pledgor keeps its
books and records, is located at the address of Pledgor shown at the beginning
of this Agreement.
Section 2.5 Percentage of Stock. The shares of capital stock included in
-------------------
the Collateral constitute (a) 100% of the issued and outstanding shares of
capital stock of _________________, (b) 65% of the issued and outstanding shares
of voting capital stock of _____________________, and (c) 100% of the issued and
outstanding shares of non-voting capital stock of _____________________.
Section 2.6 Litigation. Except as disclosed on Schedule 8.5 to the
----------
Credit Agreement, there is no litigation, investigation, or governmental
proceeding pending or threatened against Pledgor or any of its properties which
if adversely determined would have a material adverse effect on the Collateral
or the financial condition, operations, or business of Pledgor.
Section 2.7 First Priority Perfected Security Interest. Upon the filing
------------------------------------------
of UCC financing statements and Agent's taking possession of the certificates
representing the stock included in the Collateral, this Agreement creates in
favor of the Agent a first priority perfected security interest in the
Collateral. There are no conditions precedent to the effectiveness of this
Agreement that have not been fully and permanently satisfied.
[ Section 2.8 Benefit to Pledgor. The value of the consideration received
------------------
and to be received by the Pledgor as a result of the Borrower, the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent and the
Banks entering into the Credit Agreement and the Pledgor executing and
delivering this Agreement is reasonably worth at least as much as the liability
and obligation of the Pledgor hereunder. Such liability and obligation of the
Pledgor hereunder. Such liability and obligation and the Borrower's entering the
Credit Agreement have benefitted and may reasonably be expected to benefit the
Pledgor directly and indirectly. The ability of Borrower to borrow and obtain
letters of credit from time to time under the Credit Agreement will benefit
Pledgor and the consolidated corporate group of which the Pledgor is a part and
are necessary and convenient to the conduct, promotion and attainment of the
business of the Pledgor. The Pledgor
PLEDGE AGREEMENT - Page 5
has adequate capital to conduct its business as a going concern, as presently
conducted and as proposed to be conducted. The Pledgor will be able to meet its
obligations hereunder and in respect of its other existing and future
indebtedness and liabilities as and when the same shall be due and payable. The
Pledgor is not insolvent (as that term is defined in 11 U.S.C. (S) 101 or
applicable law) and will not be rendered insolvent by its obligations hereunder.
The foregoing representations are supported by the Pledgor's internal
projections and forecasts. The Pledgor has determined that the execution and
delivery of this Agreement is to its advantage and benefit, taking into account
all relevant facts and circumstances.]
ARTICLE III
Affirmative and Negative Covenants
----------------------------------
Pledgor covenants and agrees with the Agent that until the Obligations are
paid and performed in full and all Commitments have terminated:
Section 3.1 Delivery. Prior to or concurrently with the execution and
--------
delivery of this Agreement, Pledgor shall deliver to the Agent all certificates
identified in subsections (b) and (c) of Section 1.2 hereof, and all other
--------------- --- -----------
certificates evidencing any other Collateral existing on the date hereof,
accompanied by undated stock powers duly executed in blank. [CellStar
International: Prior to or concurrently with the execution and delivery of this
Agreement, the Pledgor shall deliver to the Agent an instrument of transfer duly
executed by the Pledgor in relation to the transfer of _____ shares in the
issued share capital of CellStar Asia to the Agent or its nominee. The Pledgor
will procure CellStar Asia to issue a share certificate in favor of the Agent or
its nominee for the said _____ shares in due course. The Pledgor will also
deliver to the Agent a contract note executed by the Pledgor in blank as further
security for the Obligations. For the avoidance of doubt, the beneficial
ownership of the said shares shall not be transferred to the Agent or its
nominee unless or until an Event of Default shall occur.]
Section 3.2 Encumbrances. Pledgor shall not create, permit, or suffer
------------
to exist, and shall defend the Collateral against, any Lien on the Collateral
except the Permitted Liens, and shall defend Pledgor's rights in the Collateral
and the Agent's security interest in the Collateral against the claims and
demands of all Persons. Pledgor shall do nothing to impair the rights of the
Agent in the Collateral.
Section 3.3 Disposition of Collateral. Pledgor shall not sell, assign
-------------------------
(by operation of law or otherwise), or otherwise dispose of, or grant any option
with respect to the Collateral or any part thereof without the prior written
consent of the Agent.
Section 3.4 Distributions. If Pledgor shall become entitled to receive
-------------
or shall receive any stock certificate (including, without limitation, any
certificate representing a stock dividend or a distribution in connection with
any reclassification, increase, or reduction of capital or issued in connection
with any reorganization), option or rights, whether as an addition to, in
substitution of,
PLEDGE AGREEMENT - Page 6
or in exchange for any Collateral or otherwise, Pledgor agrees to accept the
same as the Agent's agent and to hold the same in trust for the Agent, and to
deliver the same forthwith to the Agent in the exact form received, with the
appropriate [endorsement of Pledgor when necessary and/or appropriate undated
stock powers duly executed in blank], [CellStar International: instrument of
transfer and contract note duly executed by the Pledgor in blank] to be held by
the Agent as additional Collateral for the Obligations, subject to the terms
hereof. Any sums paid upon or in respect of the Collateral upon the liquidation,
dissolution or winding up of any issuer of Collateral shall be paid over to the
Agent to be held by it as additional Collateral for the Obligations subject to
the terms hereof; and in case any distribution of capital shall be made on or in
respect of the Collateral or any property shall be distributed upon or with
respect to the Collateral pursuant to any recapitalization or reclassification
of the capital of any issuer of Collateral or pursuant to any reorganization of
any issuer of Collateral, the property so distributed shall be delivered to the
Agent to be held by it, as additional Collateral for the Obligations, subject to
the terms hereof. All sums of money and property so paid or distributed in
respect of the Collateral that are received by Pledgor shall, until paid or
delivered to the Agent, be held by Pledgor in trust as additional security for
the Obligations.
Section 3.5 Further Assurances. At any time and from time to time, upon
------------------
the request of the Agent, and at the sole expense of Pledgor, Pledgor shall
promptly execute and deliver all such further instruments and documents and take
such further action as the Agent may deem necessary or desirable to preserve and
perfect its security interest in the Collateral and carry out the provisions and
purposes of this Agreement, including, without limitation, the execution and
filing of such financing statements as the Agent may require. A carbon,
photographic, or other reproduction of this Agreement or of any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement and may be filed as a financing statement. Subject to the
right of Pledgor to receive cash dividends and distributions under Section 4.3
-----------
hereof, in the event any Collateral is ever received by Pledgor, Pledgor shall
promptly transfer and deliver to the Agent such Collateral so received by
Pledgor (together with any necessary endorsements in blank, pledge endorsements,
other appropriate endorsements, or undated stock powers duly executed in blank),
which Collateral shall thereafter be held by the Agent pursuant to the terms of
this Agreement. [delete if CellStar International: The Agent shall at all times
have the right to exchange any certificates representing Collateral for
certificates of smaller or larger denominations for any purpose consistent with
this Agreement.]
Section 3.6 Inspection Rights. Pledgor shall permit the Agent and its
-----------------
representatives to examine, inspect, and copy Pledgor's books and records at any
reasonable time and as often as the Agent may desire during normal business
hours.
Section 3.7 Taxes. The Pledgor agrees to pay or discharge prior to
-----
delinquency all taxes, assessments, levies, and other governmental charges
imposed on it or its property, except Pledgor shall not be required to pay or
discharge any tax, assessment, levy, or other governmental charge if (i) the
amounts or validity thereof is being contested by Pledgor in good faith by
appropriate proceedings diligently pursued, (ii) such proceedings do not involve
any risk of sale, forfeiture, or
PLEDGE AGREEMENT - Page 7
loss of the Collateral or any interest therein, and (iii) adequate reserves
therefor have been established in conformity with GAAP.
Section 3.8 Notification. Pledgor shall promptly, and in any event
------------
within five days after Pledgor obtains knowledge or becomes aware of any of the
following, notify the Agent of (a) any Lien or claim that has attached to or
been made or asserted against any of the Collateral, (b) any material damage to
or loss of any of the Collateral, (c) the occurrence of any other event that
could have a material adverse effect on the Collateral or the security interest
created hereunder, and (d) the occurrence or existence of any Default.
Section 3.9 Books and Records; Information. Pledgor shall keep accurate
------------------------------
and complete books and records of the Collateral and Pledgor's business and
financial condition in accordance with GAAP. Pledgor shall from time to time at
the request of the Agent deliver to the Agent such information regarding the
Collateral and Pledgor as the Agent may request. Pledgor shall xxxx its books
and records to reflect the security interest of the Agent under this Agreement.
Section 3.10 Compliance with Laws and Agreements. Pledgor shall comply
-----------------------------------
in all material respects with all applicable laws, rules, regulations, orders
and decrees of any Governmental Authority or arbitrator and all material
agreements, contracts, and instruments binding on it or affecting its properties
or business.
Section 3.11 Additional Securities. Pledgor shall not consent to or
---------------------
approve the issuance of any additional shares of any class of capital stock of
any issuer of Collateral, or any securities convertible into, or exchangeable
for, any such shares or any warrants, options, rights, or other commitments
entitling any Person to purchase or otherwise acquire any such shares.
ARTICLE IV
Rights of Agent and Pledgor
---------------------------
Section 4.1 Power of Attorney. Pledgor hereby irrevocably constitutes
-----------------
and appoints the Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead and in the name of Pledgor or in its
own name, to take any and all action and to execute any and all documents and
instruments which the Agent at any time and from time to time deems necessary or
desirable to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, Pledgor hereby gives the Agent the power and right
on behalf of Pledgor and in its own name to do any of the following (subject to
the rights of Pledgor under Sections 4.2 and 4.3 hereof), without notice to or
------------ ---
the consent of Pledgor, and whether or not an Event of Default has occurred or
is continuing (except as otherwise expressly provided below):
(i) after the occurrence and during the continuance of an Event
of Default, to demand, xxx for, collect, or receive in the name of Pledgor
or in its own name, any money
PLEDGE AGREEMENT - Page 8
or property at any time payable or receivable on account of or in exchange
for any of the Collateral and, in connection therewith, endorse checks,
notes, drafts, acceptances, money orders, or any other instruments for the
payment of money under the Collateral;
(ii) to pay or discharge taxes or Liens levied or placed on or
threatened against the Collateral;
(iii) (A) after the occurrence and during the continuance of an
Event of Default, to direct account debtors and any other parties liable
for any payment under any of the Collateral to make payment of any and all
monies due and to become due thereunder directly to the Agent or as the
Agent shall direct; (B) after the occurrence and during the continuance of
an Event of Default, to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any time in
respect of or arising out of any Collateral; (C) after the occurrence and
during the continuance of an Event of Default, to sign and endorse any
drafts, assignments, proxies, stock powers, verifications, notices, and
other documents relating to the Collateral; (D) after the occurrence and
during the continuance of an Event of Default, to commence and prosecute
any suit, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (E) after the
occurrence and during the continuance of an Event of Default, to defend any
suit, action, or proceeding brought against Pledgor with respect to any
Collateral; (F) after the occurrence and during the continuance of an Event
of Default, to settle, compromise, or adjust any suit, action, or
proceeding described above and, in connection therewith, to give such
discharges or releases as the Agent may deem appropriate; (G) to exchange
any of the Collateral for other property upon any merger, consolidation,
reorganization, recapitalization, or other readjustment of any issuer of
Collateral and, in connection therewith, deposit any of the Collateral with
any committee, depositary, transfer agent, registrar, or other designated
agency upon such terms as the Agent may determine; (H) to add or release
any guarantor, indorser, surety, or other party to any of the Collateral or
the Obligations; (I) to renew, extend, or otherwise change the terms and
conditions of any of the Collateral or Obligations; and (J) after the
occurrence and during the continuance of an Event of Default, to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Agent were the
absolute owner thereof for all purposes, and to do, at the Agent's option
and Pledgor's expense, at any time, or from time to time, all acts and
things which the Agent deems necessary to protect, preserve, or realize
upon the Collateral and the Agent's security interest therein.
This power of attorney is a power coupled with an interest and shall be
irrevocable. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to the Agent in this Agreement, and shall not be liable for
any failure to do so or any delay in doing so. The Agent shall not be liable for
any act or omission or for any error of judgment or any mistake of fact or law
in its individual capacity or in its capacity as attorney-in-fact except acts or
omissions resulting from its willful misconduct. This
PLEDGE AGREEMENT - Page 9
power of attorney is conferred on the Agent solely to protect, preserve, and
realize upon its security interest in the Collateral. The Agent will exercise
its best efforts to notify Pledgor of any action taken by the Agent in its
capacity as attorney-in-fact pursuant to this Section, promptly after such
action is taken provided that any failure by the Agent to so notify Pledgor
shall not impose any liability upon the Agent or affect its rights and remedies
hereunder, at law or in equity. The Agent shall not be responsible for any
decline in the value of the Collateral and shall not be required to take any
steps to preserve rights against prior parties or to protect, preserve, or
maintain any security interest or Lien given to secure the Collateral.
Section 4.2 Voting Rights. Unless and until an Event of Default shall
-------------
have occurred and be continuing, Pledgor shall be entitled to exercise any and
all voting rights pertaining to the Collateral or any part thereof in accordance
with the direction of the Pledgor for any purpose not inconsistent with the
terms of this Agreement or the Credit Agreement.
Section 4.3 Dividends and Distributions. Unless and until an Event of
---------------------------
Default shall have occurred and be continuing, Pledgor shall be entitled to
receive and retain or distribute to Borrower any dividends and distributions on
the Collateral paid in cash to the extent and only to the extent that such
dividends and distributions are permitted by the Credit Agreement, except as
provided in Section 3.4 hereof. [CellStar International: Accordingly, unless
-----------
and until an Event of Default shall have occurred and be continuing, the Agent
shall transmit to Pledgor any and all such cash dividends received by Agent.]
Section 4.4 Setoff; Property Held by Agents and the Banks. If an Event
---------------------------------------------
of Default shall have occurred and be continuing, the Agent, the Syndication
Agent, the Documentation Agent, the Alternate Currency Agent and each Bank shall
have the right to set off and apply against the Obligations, at any time and
without notice to Pledgor, any and all deposits (general or special, time or
demand, provisional or final) or other sums at any time credited by or owing
from the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent or any Bank to Pledgor whether or not the Obligations are then
due. As additional security for the Obligations, Pledgor hereby grants the
Agent, the Syndication Agent, the Documentation Agent, the Alternate Currency
Agent and each Bank a security interest in all money, instruments, and other
property of Pledgor now or hereafter held by the Agent, the Syndication Agent,
the Documentation Agent, the Alternate Currency Agent or any Bank, including,
without limitation, property held in safekeeping. In addition to the Agent's,
the Syndication Agent, the Documentation Agent, the Alternate Currency Agent or
any Bank's right of setoff and as further security for the Obligations, Pledgor
hereby grants the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent and each Bank a security interest in all deposits
(general or special, time or demand, provisional or final) and other accounts of
Pledgor now or hereafter on deposit with or held by the Agent, the Syndication
Agent, the Documentation Agent, the Alternate Currency Agent or any Bank and all
other sums at any time credited by or owing from the Agent, the Syndication
Agent, the Documentation Agent, the Alternate Currency Agent or any Bank to
Pledgor. The rights and remedies of the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent and each Bank hereunder are in
addition to other rights and remedies (including, without limitation, other
rights of
PLEDGE AGREEMENT - Page 10
setoff) which the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent or any Bank may have.
Section 4.5 Performance by Agent. If Pledgor shall fail to perform any
--------------------
covenant or agreement contained in this Agreement, the Agent may perform or
attempt to perform such covenant or agreement on behalf of Pledgor. In such
event, Pledgor shall, at the request of the Agent, promptly pay any amount
expended by the Agent in connection with such performance or attempted
performance to the Agent, together with interest thereon at the Default Rate
from and including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that the Agent shall not have any liability or responsibility for the
performance of any obligation of Pledgor under this Agreement.
Section 4.6 Agent's Duty of Care. Other than the exercise of reasonable
--------------------
care in the physical custody of the Collateral while held by the Agent
hereunder, the Agent shall have no responsibility for or obligation or duty with
respect to all or any part of the Collateral or any matter or proceeding arising
out of or relating thereto, including, without limitation, any obligation or
duty to collect any sums due in respect thereof or to protect or preserve any
rights against prior parties or any other rights pertaining thereto, it being
understood and agreed that Pledgor shall be responsible for preservation of all
rights in the Collateral. Without limiting the generality of the foregoing, the
Agent shall be conclusively deemed to have exercised reasonable care in the
custody of the Collateral if the Agent takes such action, for purposes of
preserving rights in the Collateral, as Pledgor may reasonably request in
writing, but no failure or omission or delay by the Agent in complying with any
such request by Pledgor, and no refusal by the Agent to comply with any such
request by Pledgor, shall be deemed to be a failure to exercise reasonable care.
ARTICLE V
Default
-------
Section 5.1 Rights and Remedies. If any Event of Default shall occur, the
-------------------
Agent shall have the following rights and remedies:
(a) In addition to all other rights and remedies granted to the
Agent in this Agreement and in any other Loan Document or by applicable
law, the Agent shall have all of the rights and remedies of a secured party
under the UCC. Without limiting the generality of the foregoing, the Agent
may (A) without demand or notice to Pledgor, collect, receive, or take
possession of the Collateral or any part thereof, (B) sell or otherwise
dispose of the Collateral, or any part thereof, in one or more parcels at
public or private sale or sales, at the Agent's offices or elsewhere, for
cash, on credit, or for future delivery, and/or (C) bid and become a
purchaser at any sale free of any right or equity of redemption in Pledgor,
which right or equity is hereby expressly waived and released by Pledgor.
Upon the request of the Agent, Pledgor shall assemble the Collateral and
make it available to the Agent at any place designated by the Agent that is
reasonably convenient to Pledgor and the Agent. Pledgor
PLEDGE AGREEMENT - Page 11
agrees that the Agent shall not be obligated to give more than five days
written notice of the time and place of any public sale or of the time
after which any private sale may take place and that such notice shall
constitute reasonable notice of such matters. The Agent shall not be
obligated to make any sale of the Collateral regardless of notice of sale
having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned. Pledgor shall be liable for all expenses of retaking,
holding, preparing for sale, or the like, and all attorneys' fees and other
expenses incurred by the Agent in connection with the collection of the
Obligations and the enforcement of the Agent's rights under this Agreement,
all of which expenses and fees shall constitute additional Obligations
secured by this Agreement. The Agent may apply the Collateral against the
Obligations in such order and manner as the Agent may elect in its sole
discretion. Pledgor shall remain liable for any deficiency if the proceeds
of any sale or disposition of the Collateral are insufficient to pay the
Obligations. Pledgor waives all rights of marshalling in respect of the
Collateral.
(b) The Agent may cause any or all of the Collateral held by it to be
transferred into the name of the Agent (if the Agent is not yet the
registered owner of the Collateral) or the name or names of the Agent's
nominee or nominees.
(c) The Agent may collect or receive all money or property at any time
payable or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so.
(d) The Agent shall have the right, but shall not be obligated to,
exercise or cause to be exercised all voting, consensual, and other powers
of ownership pertaining to the Collateral[, including, without limitation,
all rights, titles and interests of Pledgor as general partner of the
Partnership,] [and Pledgor shall deliver to the Agent, if requested by the
Agent, irrevocable proxies with respect to the Collateral in form
satisfactory to the Agent.] [CellStar International: and shall no longer be
required to vote in accordance with Pledgor's directions; and in the event
that the Agent is not yet the registered owner of the Collateral, Pledgor
shall deliver to Agent, if requested by the Agent, irrevocable proxies with
respect to the Collateral in form satisfactory to the Agent.]
(e) The Agent may notify or require Pledgor to notify parties
obligated under any accounts, instruments, contracts or agreements which
are part of the Collateral, [including without limitation the Partnership
Agreements,] to make payment directly to the Agent, and the Agent may take
possession of all proceeds of any such instruments and contracts in
Pledgor's possession. Any such payments or distributions received by
Pledgor after an Event of Default shall, until paid or delivered to the
Agent, be held by Pledgor in trust as additional security for the
Obligations.
PLEDGE AGREEMENT - Page 12
(f) [Pledgor hereby acknowledges and confirms that the Agent may
be unable to effect a public sale of any or all of the Collateral by reason
of certain prohibitions contained in the Securities Act of 1933, as
amended, and applicable state securities laws and may be compelled to
resort to one or more private sales thereof to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire
any shares of the Collateral for their own respective accounts for
investment and not with a view to distribution or resale thereof. Pledgor
further acknowledges and confirms that any such private sale may result in
prices or other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner, and the Agent shall be under no obligation to take any steps in
order to permit the Collateral to be sold at a public sale. The Agent shall
be under no obligation to delay a sale of any of the Collateral for any
period of time necessary to permit any issuer thereof to register such
Collateral for public sale under the Securities Act of 1933, as amended, or
under applicable state securities laws.] [CellStar International: Pledgor
hereby acknowledges and confirms that under applicable Hong Kong law the
Agent cannot effect a public sale of any or all of the Collateral. Pledgor
further acknowledges and confirms that if a private sale results in prices
or other terms less favorable to the seller than may have resulted if such
sale were a public sale, such circumstances shall not cause such sale to be
deemed not to have been made in a commercially reasonable manner. Nothing
in this Agreement shall prohibit a public sale of the Collateral if any
change in circumstances or applicable law otherwise results in the
availability of public sale with respect to the Collateral.]
(g) On any sale of the Collateral, the Agent is hereby authorized
to comply with any limitation or restriction with which compliance is
necessary, in the view of the Agent's counsel, in order to avoid any
violation of applicable law or in order to obtain any required approval of
the purchaser or purchasers by any applicable governmental authority.
(h) The Agent may subrogate to all of Pledgor's interests, rights,
and remedies with respect to any of the Collateral.
ARTICLE VI
Miscellaneous
-------------
Section 6.1 Expenses. The Pledgor hereby agrees to pay on demand: (a)
--------
all reasonable costs and out-of-pocket expenses of the Agent in connection with
the preparation, negotiation, execution, and delivery of this Agreement and the
other Loan Documents and any and all amendments, modifications, renewals,
extensions, and supplements thereof and thereto, including, without limitation,
the reasonable fees and expenses of legal counsel for the Agent, (b) all costs
and out-of-pocket expenses of the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent and the Banks, or any of them
in connection with any Default and the enforcement of this Agreement or any
other Loan Document, including, without limitation, the reasonable fees
PLEDGE AGREEMENT - Page 13
and expenses of legal counsel for the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent and the Banks, or any of them,
(c) all transfer, stamp, documentary, or other similar taxes, assessments, or
charges levied by any Governmental Authority in respect of this Agreement or any
of the other Loan Documents, (d) all reasonable costs, out-of-pocket expenses,
assessments, and other charges incurred in connection with any filing,
registration, recording, or perfection of any security interest or Lien
contemplated by this Agreement or any other Loan Document, and (e) all other
reasonable costs and out-of-pocket expenses incurred by the Agent in connection
with this Agreement or any other Loan Document, including, without limitation,
all fees, costs, out-of-pocket expenses, and other charges incurred in
connection with performing or obtaining any audit or appraisal in respect of the
Collateral.
Section 6.2 INDEMNIFICATION. THE PLEDGOR HEREBY AGREES TO INDEMNIFY THE
---------------
AGENT AND EACH BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS, AGENTS, AND PARTICIPANTS FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, INTEREST, EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES), AND AMOUNTS PAID IN SETTLEMENT TO WHICH ANY OF THEM
MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) ANY BREACH BY [THE BORROWER OR] THE PLEDGOR OF ANY
REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE
LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL,
REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR
AFFECTING ANY OF THE PROPERTIES OR ASSETS OF [THE BORROWER,] THE PLEDGOR OR ANY
SUBSIDIARY, (E) THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT, (F) ANY AND ALL
TAXES, LEVIES, DEDUCTIONS, AND CHARGES IMPOSED ON THE AGENT OR ANY BANK OR ANY
OF THEIR RESPECTIVE CORRESPONDENTS IN RESPECT OF ANY LETTER OF CREDIT, OR (G)
ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
RELATING TO ANY OF THE FOREGOING; PROVIDED, HOWEVER, THAT NO PERSON TO BE
-------- -------
INDEMNIFIED HEREUNDER SHALL HAVE THE RIGHT TO BE INDEMNIFIED FOR ITS OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITING ANY PROVISION OF THIS
AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES
(INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR
PLEDGE AGREEMENT - Page 14
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
Section 6.3 No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent or any Bank to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement are cumulative
and not exclusive of any rights and remedies provided by law.
Section 6.4 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of Pledgor and the Agent and their respective heirs,
successors, and assigns, except that Pledgor may not assign any of its rights or
obligations under this Agreement without the prior written consent of the Agent.
Section 6.5 AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT REPRESENTS THE
---------------------------
FINAL AGREEMENT AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.
THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this
Agreement may be amended or waived only by an instrument in writing signed by
the parties hereto.
Section 6.6 Notices. All notices and other communications provided for
-------
in this Agreement shall be given or made in writing and telecopied, mailed by
certified mail return receipt requested, or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof; or, as to any party at such other address as shall be designated by such
party in a notice to the other party given in accordance with this Section.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopy, subject to
telephone confirmation of receipt, or when personally delivered or, in the case
of a mailed notice, when duly deposited in the mails, in each case given or
addressed as aforesaid.
Section 6.7 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
----------------------------------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT
HAS BEEN ENTERED INTO IN DALLAS COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR
ALL PURPOSES IN DALLAS COUNTY, TEXAS.
Section 6.8 Headings. The headings, captions, and arrangements used in
--------
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
PLEDGE AGREEMENT - Page 15
Section 6.9 Survival. All representations and warranties made in this
--------
Agreement shall survive the execution and delivery of this Agreement, and no
investigation by the Agent or any Bank shall affect the representations and
warranties of Pledgor herein or the right of the Agent or any Bank to rely upon
them.
Section 6.10 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 6.11 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 6.12 Construction. Pledgor and the Agent acknowledge that each
------------
of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by Pledgor and the
Agent.
Section 6.13 Termination. If all of the Obligations shall have been paid
-----------
and performed in full and all Commitments shall have expired or terminated, the
Agent shall, upon the written request of Pledgor, execute and deliver to Pledgor
a proper instrument or instruments acknowledging the release and termination of
the security interests created by this Agreement, and shall duly assign and
deliver to Pledgor (without recourse and without any representation or warranty)
such of the Collateral as may be in the possession of the Agent and has not
previously been sold or otherwise applied pursuant to this Agreement. The Agent
shall also return to the Pledgor all documents, including certificates,
instruments of transfer and contract notes in relation to the Collateral.
Section 6.14 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
--------------------
APPLICABLE LAW, PLEDGOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
CREDIT AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF THE AGENT, THE SYNDICATION
AGENT, THE DOCUMENTATION AGENT, THE ALTERNATE CURRENCY AGENT OR ANY BANK IN THE
NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
PLEDGE AGREEMENT - Page 16
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
PLEDGOR:
-------
______________________________________
By:___________________________________
Name:______________________________
Title:_____________________________
Address for Notices:
[1730 Briercroft
Xxxxxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: General Counsel]
AGENT:
-----
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, as Agent
By:___________________________________
Name:______________________________
Title:_____________________________
Address for Notices:
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxx
PLEDGE AGREEMENT - Page 17
EXHIBIT H
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Guaranty
--------
GUARANTY
--------
THIS GUARANTY ("Guaranty"), dated as of ________________, 199__, is
--------
executed by the undersigned guarantors (each a "Guarantor" and, collectively,
---------
the "Guarantors"), for the benefit of each of the banks or lending institutions
----------
(each, a "Bank" and, collectively, the "Banks") which is or may from time to
---- -----
time become a signatory to the Credit Agreement (hereinafter defined) or any
successor or permitted assignee thereof, and Chase Bank of Texas, National
Association (formerly known as Texas Commerce Bank National Association), a
national banking association ("Chase"), as agent for itself and each of the
-----
other Banks (Chase in such capacity, together with its successors in such
capacity, the "Agent").
-----
WHEREAS, Cellstar Corporation, a Delaware corporation (the "Borrower"), the
--------
Banks, The First National Bank of Chicago, as Syndication Agent, National City
Bank, as Documentation Agent, The Chase Manhattan Bank, as Alternate Currency
Agent and the Agent are parties to that certain Amended and Restated Credit
Agreement dated as of August 2, 1999 (as the same may be amended, supplemented
or modified from time to time, the "Credit Agreement"); and
----------------
WHEREAS, as a condition to the Credit Agreement, each Guarantor is required
to execute and deliver this Guaranty.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Guarantors hereby jointly and severally,
irrevocably and unconditionally guarantee to the Agent, the Syndication Agent,
the Documentation Agent, the Alternate Currency Agent and the Banks the full and
prompt payment and performance of the Guaranteed Indebtedness (hereinafter
defined), this Guaranty being upon the following terms:
1. The term "Guaranteed Indebtedness", as used herein, means all of the
-----------------------
"Obligations", as defined in the Credit Agreement. The term "Guaranteed
----------
Indebtedness" shall include any and all post-petition interest and expenses
------------
(including reasonable attorneys' fees) whether or not allowed under any
bankruptcy, insolvency, or other similar law. All other capitalized terms used
and not otherwise defined herein shall have their respective meanings as set
forth in the Credit Agreement.
2. This instrument shall be an absolute, continuing, irrevocable, and
unconditional guaranty of payment and performance, and not a guaranty of
collection, and each Guarantor shall remain liable on its obligations hereunder
until the payment and performance in full of the Guaranteed Indebtedness. No
set-off, counterclaim, recoupment, reduction, or diminution of any obligation,
or any defense of any kind or nature which Borrower may have against the Agent,
the Syndication Agent, the Documentation Agent, the Alternate Currency Agent,
any Bank or any other party, or which any Guarantor may have against Borrower,
the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent, any Bank or any other party, shall be available to, or shall be
asserted by, any Guarantor against the Agent, the Syndication Agent, the
GUARANTY - Page 1
Documentation Agent, the Alternate Currency Agent, any Bank or any subsequent
holder of the Guaranteed Indebtedness or any part thereof or against payment of
the Guaranteed Indebtedness or any part thereof.
3. The obligations of each 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 to being set aside, avoided, or annulled under any
applicable state law relating to fraudulent transfers or fraudulent obligations.
4. If any Guarantor becomes liable for any indebtedness owing by Borrower
to the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent or any Bank by endorsement or otherwise, other than under this
Guaranty, such liability shall not be in any manner impaired or affected hereby,
and the rights of the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent and the Banks hereunder shall be cumulative of any and
all other rights that any of them may ever have against any Guarantor. The
exercise by the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent or any Bank of any right or remedy hereunder or under
any other instrument, or at law or in equity, shall not preclude the concurrent
or subsequent exercise of any other right or remedy.
5. In the event of default by Borrower in payment or performance of the
Guaranteed Indebtedness, or any part thereof, when such Guaranteed Indebtedness
becomes due, whether by its terms, by acceleration, or otherwise, Guarantors
jointly and severally agree to promptly pay the amount due thereon to the Agent,
for the pro rata benefit of the Banks, without notice or demand in lawful
currency of the United States of America and it shall not be necessary for the
Agent, the Syndication Agent, the Documentation Agent, the Alternate Currency
Agent or any Bank, in order to enforce such payment by any Guarantor, first to
institute suit or exhaust its remedies against Borrower, any Guarantor or others
liable on such Guaranteed Indebtedness, or to enforce any rights against any
collateral which shall ever have been given to secure such Guaranteed
Indebtedness. Notwithstanding anything to the contrary contained in this
Guaranty, each Guarantor hereby irrevocably subordinates to the prior
indefeasible payment in full of the Guaranteed Indebtedness, any and all rights
such Guarantor may now or hereafter have under any agreement or at law or in
equity (including, without limitation, any law subrogating such Guarantor to the
rights of the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent and the Banks) to assert any claim against or seek
contribution, indemnification or any other form of reimbursement from Borrower
or any other party liable for payment of any or all of the Guaranteed
Indebtedness for any payment made by such Guarantor under or in connection with
this Guaranty or otherwise.
6. If acceleration of the time for payment of any amount payable by
Borrower under the Guaranteed Indebtedness is stayed upon the insolvency,
bankruptcy, or reorganization of Borrower, all such amounts otherwise subject to
acceleration under the terms of the Guaranteed Indebtedness shall nonetheless be
jointly and severally payable by the Guarantors hereunder forthwith on demand by
the Agent.
GUARANTY - Page 2
7. Each Guarantor hereby agrees that its obligations under this Guaranty
shall not be released, discharged, diminished, impaired, reduced, or affected
for any reason or by the occurrence of any event, including, without limitation,
one or more of the following events, whether or not with notice to or the
consent of any Guarantor: (a) the taking or accepting of collateral as security
for any or all of the Guaranteed Indebtedness or the release, surrender,
exchange, or subordination of any collateral now or hereafter securing any or
all of the Guaranteed Indebtedness; (b) any partial release of the liability of
any Guarantor hereunder, or the full or partial release of any other guarantor
from liability for any or all of the Guaranteed Indebtedness; (c) any disability
of Borrower, or the dissolution, insolvency, or bankruptcy of Borrower, any
Guarantor, or any other party at any time liable for the payment of any or all
of the Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness
or any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (e) any adjustment,
indulgence, forbearance, waiver, or compromise that may be granted or given by
the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent or any Bank to Borrower, any Guarantor, or any other party ever
liable for any or all of the Guaranteed Indebtedness; (f) any neglect, delay,
omission, failure, or refusal of the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent or any Bank to take or
prosecute any action for the collection of any of the Guaranteed Indebtedness or
to foreclose or take or prosecute any action in connection with any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (g) the unenforceability or invalidity of any or
all of the Guaranteed Indebtedness or of any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (h) any payment by Borrower or any other party to the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent or any
Bank is held to constitute a preference under applicable bankruptcy or
insolvency law or if for any other reason the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent or any Bank is required to
refund any payment or pay the amount thereof to someone else; (i) the settlement
or compromise of any of the Guaranteed Indebtedness; (j) the non-perfection of
any security interest or lien securing any or all of the Guaranteed
Indebtedness; (k) any impairment of any collateral securing any or all of the
Guaranteed Indebtedness; (l) the failure of the Agent, the Syndication Agent,
the Documentation Agent, the Alternate Currency Agent or any Bank to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (m) any change in the
corporate existence, structure, or ownership of Borrower; or (n) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or any Guarantor.
8. Each Guarantor represents and warrants to the Agent, the Syndication
Agent, the Documentation Agent, the Alternate Currency Agent and the Banks that:
(a) Each and every representation and warranty contained in the
Credit Agreement is true and correct in all respects.
GUARANTY - Page 3
(b) The value of the consideration received and to be received by
such Guarantor as a result of Borrower, the Banks, the Syndication Agent,
the Documentation Agent, the Alternate Currency Agent and the Agent
entering into the Credit Agreement, the extensions of credit thereunder and
such Guarantor executing and delivering this Guaranty is reasonably
equivalent to or greater than the liability and obligation of such
Guarantor hereunder, and such liability and obligation, the Borrower's
entering into the Credit Agreement and the extensions of credit thereunder
have benefitted and may reasonably be expected to benefit such Guarantor
directly or indirectly.
(c) Such Guarantor has, independently and without reliance upon the
Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent or any Bank and based upon such documents and information as
such Guarantor has deemed appropriate, made its own analysis and decision
to enter into this Guaranty.
(d) The ability of Borrower to borrow and obtain letters of credit
from time to time under the Credit Agreement will enable such Guarantor to
obtain credit, will benefit such Guarantor and the consolidated corporate
group of which such Guarantor is a part and are necessary and convenient to
the conduct, promotion and attainment of the business of such Guarantor.
(e) As additional consideration for entering into this Guaranty, such
Guarantor has obtained certain rights under that certain Contribution and
Indemnification Agreement of even date herewith, among the Borrower and the
Guarantors.
(f) Such Guarantor has adequate capital to conduct its business as a
going concern, as presently conducted and as proposed to be conducted; such
Guarantor will be able to meet its obligations hereunder and in respect of
its other existing and future indebtedness and liabilities as and when the
same shall be due and payable; such Guarantor is not insolvent (as that
term is defined in 11 U.S.C.(S) 101 or applicable law) and will not be
rendered insolvent by its obligations hereunder, and the foregoing
representations are supported by such Guarantor's internal projections and
forecasts.
(g) Such Guarantor has determined that the execution and delivery of
this Guaranty is to its advantage and benefit, taking into account all
relevant facts and circumstances.
9. If an Event of Default shall have occurred and be continuing, the
Agent and each Bank shall have the right to set off and apply against this
Guaranty or the Guaranteed Indebtedness or both, at any time and without notice
to any Guarantor, any and all deposits (general or special, time or demand,
provisional or final) or other sums at any time credited by or owing from the
Agent, the Syndication Agent, the Documentation Agent, the Alternate Currency
Agent or any Bank to any Guarantor whether or not the Guaranteed Indebtedness is
then due and irrespective of whether or not
GUARANTY - Page 4
the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent or any Bank shall have made any demand under this Guaranty. As
security for this Guaranty and the Guaranteed Indebtedness, each Guarantor
hereby grants the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent and each Bank a security interest in all money,
instruments, certificates of deposit, and other property of such Guarantor now
or hereafter held by the Agent, the Syndication Agent, the Documentation Agent,
the Alternate Currency Agent and each Bank, including without limitation,
property held in safekeeping. In addition to the Agent's, the Syndication
Agent's, the Documentation Agent's, the Alternate Currency Agent's and each
Bank's right of setoff and as further security for this Guaranty and the
Guaranteed Indebtedness, each Guarantor hereby grants the Agent, the Syndication
Agent, the Documentation Agent, the Alternate Currency Agent and each Bank a
security interest in all deposits (general or special, time or demand,
provisional or final) and all other accounts of such Guarantor now or hereafter
on deposit with or held by the Agent, the Syndication Agent, the Documentation
Agent, the Alternate Currency Agent or any Bank and all other sums at any time
credited by or owing from the Agent, the Syndication Agent, the Documentation
Agent, the Alternate Currency Agent or any Bank to such Guarantor. The rights
and remedies of the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent and each Bank hereunder are in addition to other rights
and remedies (including, without limitation, other rights of setoff) which the
Agent, the Syndication Agent, the Documentation Agent, the Alternate Currency
Agent and each Bank may have.
10. (a) Each Guarantor hereby agrees that the Subordinated Indebtedness
(hereinafter defined) shall be subordinate and junior in right of payment to the
prior payment in full of all Guaranteed Indebtedness, and each Guarantor hereby
assigns the Subordinated Indebtedness to the Agent, for the pro rata benefit of
the Banks, as security for the Guaranteed Indebtedness. If any sums shall be
paid to any Guarantor by Borrower or any other Person on account of the
Subordinated Indebtedness, such sums shall be held in trust by such Guarantor
for the benefit of the Agent and shall forthwith be paid to the Agent, for the
pro rata benefit of the Banks, without affecting the liability of any Guarantor
under this Guaranty and may be applied by the Banks against the Guaranteed
Indebtedness in such order and manner as they may determine in their absolute
discretion; provided, however, that so long as no Event of Default shall have
-------- -------
occurred, Borrower shall be permitted to pay to any Guarantor, and each
Guarantor shall be permitted to receive and retain, payments on account of
Subordinated Indebtedness consisting of trade payables owing by Borrower to any
Guarantor. Upon the request of the Agent, each Guarantor shall execute,
deliver, and endorse to the Agent, for the pro rata benefit of the Banks, such
documents and instruments as the Agent may request to perfect, preserve, and
enforce the rights of the Agent and the Banks hereunder. For purposes of this
Guaranty, the term "Subordinated Indebtedness" means all indebtedness,
-------------------------
liabilities, and obligations of Borrower and the Subsidiaries, or any of them,
to any Guarantor, whether such indebtedness, liabilities, and obligations now
exist or are hereafter incurred or arise, or whether the obligations of Borrower
or such Subsidiary thereon are direct, indirect, contingent, primary, secondary,
several, joint, joint and several, or otherwise, and irrespective of whether
such indebtedness, liabilities, or obligations are evidenced by a note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such indebtedness,
GUARANTY - Page 5
obligations, or liabilities may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by any Guarantor.
(b) Each Guarantor agrees that any and all liens, security interests,
judgment liens, charges, or other encumbrances upon the assets of Borrower and
the Subsidiaries, or any of them, securing payment of any Subordinated
Indebtedness shall be and remain inferior and subordinate to any and all liens,
security interests, judgment liens, charges, or other encumbrances upon such
assets securing payment of the Guaranteed Indebtedness or any part thereof,
regardless of whether such encumbrances in favor of any Guarantor or the Agent
presently exist or are hereafter created or attached. No Guarantor shall (i)
file suit against Borrower or any Subsidiary or exercise or enforce any other
creditor's right it may have against Borrower or any Subsidiary, or (ii)
foreclose, repossess, sequester, or otherwise take steps or institute any action
or proceedings (judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor's relief or insolvency proceeding) to enforce any liens, security
interests, collateral rights, judgments or other encumbrances held by any
Guarantor on assets of Borrower or any Subsidiary unless and until the
Guaranteed Indebtedness shall have been paid in full, no Letters of Credit are
outstanding, and the Commitments have expired or terminated.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving
Borrower or any Subsidiary as debtor, the Agent shall have the right to prove
and vote any claim under the Subordinated Indebtedness and to receive, for the
benefit of the Banks, directly from the receiver, trustee or other court
custodian all dividends, distributions, and payments made in respect of the
Subordinated Indebtedness. The Agent, the Syndication Agent, the Documentation
Agent, the Alternate Currency Agent and the Banks may apply any such dividends,
distributions, and payments against the Guaranteed Indebtedness in such order
and manner as they may determine in their absolute discretion.
(d) Each Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of Subordinated Indebtedness
shall contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty.
11. No Guarantor shall prepay any Debt, except the Guaranteed
Indebtedness.
12. No amendment or waiver of any provision of this Guaranty or consent to
any departure by any Guarantor therefrom shall in any event be effective unless
the same shall be in writing and signed by the Agent and the Required Banks. No
failure on the part of the Agent, the Syndication Agent, the Documentation
Agent, the Alternate Currency Agent or any Bank to exercise, and no delay in
exercising, any right, power, or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power, or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
GUARANTY - Page 6
13. Any acknowledgment or new promise, whether by payment of principal or
interest or otherwise and whether by Borrower or others (including any
Guarantor), with respect to any of the Guaranteed Indebtedness shall, if the
statute of limitations in favor of any Guarantor against the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent or any
Bank shall have commenced to run, toll the running of such statute of
limitations and, if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
14. This Guaranty is for the benefit of the Agent, the Syndication Agent,
the Documentation Agent, the Alternate Currency Agent and the Banks and their
respective successors and assigns, and in the event of an assignment of the
Guaranteed Indebtedness, or any part thereof, the rights and benefits hereunder,
to the extent applicable to the indebtedness so assigned, may be transferred
with such indebtedness. This Guaranty is binding not only on each Guarantor, but
on each Guarantor's successors and assigns. The Guarantors' obligations and
agreements hereunder are joint and several. The provisions of this Guaranty
shall apply to each Guarantor individually and collectively.
15. Each Guarantor recognizes that the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent and the Banks are relying upon
this Guaranty and the undertakings of each Guarantor hereunder in making
extensions of credit to Borrower under the Credit Agreement and further
recognizes that the execution and delivery of this Guaranty is a material
inducement to the Agent, the Syndication Agent, the Documentation Agent, the
Alternate Currency Agent and the Banks in entering into the Credit Agreement.
Each Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty.
16. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN INCIDENT TO A LENDING
TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN DALLAS COUNTY, TEXAS,
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS.
17. Guarantors jointly and severally agree to pay on demand all attorneys'
fees and all other costs and expenses incurred by the Agent and each Bank in
connection with the preparation, administration, enforcement, or collection of
this Guaranty.
18. Each Guarantor hereby waives promptness, diligence, notice of any
default under the Guaranteed Indebtedness, demand of payment, notice of
acceptance of this Guaranty, presentment, notice of protest, notice of dishonor,
notice of intent to accelerate, notice of acceleration, notice of the incurring
by Borrower of additional indebtedness, and all other notices and demands with
respect to the Guaranteed Indebtedness and this Guaranty.
19. Each Guarantor agrees that the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent and each Bank may exercise any
and all rights granted to them
GUARANTY - Page 7
under the Credit Agreement and the other Loan Documents without affecting the
validity or enforceability of this Guaranty.
20. Each Guarantor hereby represents and warrants to the Agent, the
Syndication Agent, the Documentation Agent, the Alternate Currency Agent and the
Banks that such Guarantor has adequate means to obtain from the Borrower and the
Subsidiaries on a continuing basis information concerning the financial
condition and assets of the Borrower and the Subsidiaries and that such
Guarantor is not relying upon the Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent or any Bank to provide (and
neither the Agent, the Syndication Agent, the Documentation Agent, the Alternate
Currency Agent nor any Bank shall have any duty to provide) any such information
to such Guarantor either now or in the future.
21. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.
22. Each Guarantor acknowledges that it has had the benefit of legal
counsel of its own choice and has been afforded an opportunity to review this
Guaranty with its legal counsel and that this Guaranty shall be construed as if
jointly drafted by the Guarantors and the Agent.
23. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR
HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS GUARANTY, THE CREDIT AGREEMENT,
ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY OR THE ACTIONS OF THE AGENT, THE SYNDICATION AGENT, THE DOCUMENTATION
AGENT, THE ALTERNATE CURRENCY AGENT OR ANY BANK IN THE NEGOTIATION,
ADMINISTRATION, OR ENFORCEMENT THEREOF.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
GUARANTY - Page 8
EXECUTED as of the day and year first written above.
GUARANTORS:
----------
____________________________________________,
a ________ corporation
By:__________________________________________
Name:_____________________________________
Title:____________________________________
Address: 0000 Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Phone No.: (000) 000-0000
Attention: General Counsel
GUARANTY - Page 9
EXHIBIT I-1
TO
AMENDED AND RESTATED CREDIT AGREEMENT
L/C Application for Standby Letters of Credit
---------------------------------------------
[LOGO OF CHASE BANK OF TEXAS]
APPLICATION AND AGREEMENT
FOR IRREVOCABLE STANDBY LETTER OF CREDIT
[_] WITHOUT RENEWALS [_] WITH RENEWALS Renewable until ____________
FOR BANK USE ONLY Latest date
To: CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
X.X. Xxx 0000 Date: L/C No.:
--------------------------------------------
Xxxxxxx, Xxxxx 00000-0000 Applicant No.:
--------------------------------------------
Date of this Application ________________ Beneficiary No.:
--------------------------------------------
Advising Bank No.:
--------------------------------------------
Gentlemen:
The undersigned Applicant(s) hereby request(s) you to establish an irrevocable
Standby Letter of Credit as set forth below in such language as you may deem
appropriate, with such variations from such terms as you may in your discretion
determine are necessary and are not materially inconsistent with this
Application and Agreement, and forward the same by:
[_] Cable/telex (full details) [_] Airmail [_] Brief Cable/telex [_] Other _______________________________
[_] Through our correspondent for delivery to the beneficiary or advised through _________________________________________________
[_] Directly to beneficiary
All banking charges other than the issuing Bank's are for [_] Beneficiary [_] Applicant(s)
___________________________________________________________________________________________________________________________________
Liability of on Behalf of (as to appear on Letter of Credit)
_________________ In favor of (Beneficiary)___________________ __________________________________________________________________
Amount
In figures:
In words:
____________________________________________________________________________________________________________________________________
Partial drawings: [_] Allowed [_] Not Allowed Expiring at the close of business on
If drawings are allowed in installments within given periods and
no drawing is made for an installment within the applicable
period, the credit
___________________________________________________________________
[_] Shall [_] Shall not be available for subsequent At your counters, unless otherwise indicated, for Sight Payment
installments
____________________________________________________________________________________________________________________________________
To be available by drafts at sight drawn on you duly signed and endorsed, or
specify any other drawee:______________________________
And accompanied by documents as specified below:
Beneficiary's manually signed statement on its letterhead reading exactly as
follows:
_______________________________________________________________________________
(Complete only when the beneficiary's bank or correspondent is to issue its
undertaking based on the issued Standby Letter of Credit)
[_] Request beneficiary's bank to issue and deliver their (specify type of
undertaking, bid or performance bond, or other)
___________________________________________________
in favor of:
___________________________________________________
For an amount not exceeding that specified above, effective immediately and
expiring at their office on_____________________________________
(30 days prior to expiry date above)
relative to________________________________________________________________
THE OPENING OF THIS CREDIT IS SUBJECT TO THE TERMS AND CONDITIONS AS SET
FORTH ON THE FOLLOWING PAGES, TO WHICH TERMS AND CONDITIONS WE AGREE Please
date and sign this Application and Agreement on Page 4 hereof.
_______________________________________________________________________________
Page 1 of 4
TERMS AND CONDITIONS FOR STANDBY LETTER OF CREDIT
In consideration of the issuance of the letter of credit and all
renewals, extensions, replacements and amendments thereof (herein called the
"Credit") by Bank in accordance with this Application and Agreement (this
"Agreement"), the undersigned (hereinafter called "Applicants," whether one or
more) jointly and severally agree to the following terms and conditions.
1. Applicants promise to pay to Bank on demand at its office shown on
front, in United States currency as follows:
A. As to drafts, draws, demands, or other evidence of amounts drawn under or
purporting to be drawn under the Credit which are payable in United States
currency, the amount paid thereon, or, if so demanded by Bank, to pay Bank at
its office in advance the amount required to pay such drafts, draws, demands or
other evidence of amounts drawn under or purporting to be drawn under the
Credit;
B. As to drafts, draws, demands, or other evidence of amounts drawn under or
purporting to be drawn under the Credit which are payable in currency other than
United States currency, either (i) the amount paid in the currency of the Credit
at the bank of Bank's choice in the country of such currency, or (ii) the
equivalent of the amount paid, in United States currency, at Bank's then current
selling rate for such currency;
C. All taxes, levies, imposts, duties, charges, fees, deductions or
withholdings of any nature whatsoever and by whomsoever and wherever imposed in
connection with this Agreement, the Credit or any transactions hereunder or
thereunder, and
D. Interest on all amounts owing to Bank hereunder at the maximum nonusurious
rate of interest permitted by applicable laws of the United States of America or
the State of Texas, from time to time in effect, whichever shall permit the
highest lawful rate (hereinafter called "the Highest Lawful Rate"). At all
times, if any, that Chapter One of Title 79, Texas Revised Civil Statues, 1925,
as amended, establishes the Highest Lawful Rate, the Highest Lawful Rate shall
be the "indicated" rate ceiling (as defined therein) from time to time in
effect. It is the intention of Applicants and Bank to conform strictly to
applicable usury laws. It is therefore agreed that: (i) if, for any reason, the
interest received for the actual period of the existence of any loan by Bank
hereunder exceeds the Highest Lawful Rate, Bank shall refund to Applicants the
amount of the excess or shall credit the amount of the excess against amounts
owing hereunder and shall not be subject to any of the penalties provided by law
for contracting for, charging, or receiving interest in excess of the Highest
Lawful Rate, (ii) the aggregate of all interest and other charges constituting
interest under applicable law and contracted for, chargeable or receivable under
this Agreement or otherwise in connection with this Agreement or the Credit,
shall not for the actual period of the existence of any loan hereunder exceed
the maximum amount of interest, nor produce a rate in excess of the Highest
Lawful Rate, (iii) if, for any reason, usurious interest is contracted for,
charged or received, then the sole remedy of Applicants shall be to receive a
refund thereof or a credit on the accrued and unpaid interest and unpaid
principal under this Agreement equal to the usurious interest, it being agreed
that usurious interest shall mean the amount by which the total interest
contracted for, charged or received exceeds the amount of interest allowed by
applicable law; and this Agreement shall be automatically deemed reformed so as
to permit only the collection of the Highest Lawful rate of interest, and (iv)
determination of the rate of interest on any loan evidenced hereby shall be
made by amortizing, prorating, allocating,, and spreading, in equal parts during
the period of the full stated term of such loan, all interest at any time
contracted for, charged or received from Applicants in connection with such
loan.
E. Applicants assume all risks (political, economic or otherwise) of
disruptions or interruptions in currency exchange with respect to any demand
payable in other than United States currency, and if there is no then prevailing
exchange rate, Bank may obtain the non-United States currency from any
commercially reasonable source, in which case Applicants shall pay Bank's cost
therefor, inclusive of all expenses, in United States currency.
F. Demand, for all purposes of this Agreement, shall be considered made at the
time Bank mails, telephones or otherwise sends notification to Applicants.
G. Applicants agree to pay to Bank, any Member and/or Correspondent (as
hereinafter defined), or its correspondents, annually in advance not later than
forty-five (45) days prior to the then current expiration date of the Credit,
all fees and commissions owing to or which become owing in respect of the
Credit. Such fees and commissions shall be payable at the then current rate
charged by Bank and/or other entity(ies). Payment of such fees or commissions in
advance shall not affect the Bank's absolute right not to renew the Credit;
however, should Bank decide in its sole and absolute discretion not to renew the
Credit, Bank shall refund such advance payment to Applicants.
2. Applicants agree that if because of any law or regulation, or because
of any change in any existing law or regulation, or in the interpretation
thereof by any official authority, whether or not having the force of law, which
comes into effect after the date of this Agreement, (a) Bank or Applicants
should, with respect to this Agreement the Credit or any transactions hereunder
or thereunder, be subject to any tax, charge, fee, insurance premium, deduction
or withholding of any kind whatsoever, or (b) reserve requirements, or changes
in existing reserve requirements, should be imposed on Bank with respect to this
Agreement or the Credit or any transactions hereunder or thereunder, and if any
of the above-mentioned measures, or any other similar measure, should result in
(i) any increase in the cost to Bank of issuing and maintaining the Credit
pursuant to this Agreement or of any transaction under or in connection with the
Credit or this Agreement, or (ii) any reduction in the payment or deposit of any
amount (principal, interest, fee, commission or otherwise) receivable by Bank in
respect of the Credit or this Agreement or of any transaction under the Credit
or this Agreement, then Applicants shall pay to Bank upon demand such increased
cost or reduction, including such additional amounts as may be necessary so that
every net payment or deposit, after deduction or withholding for or on account
of such payment or deposit (including any taxes levied on additional amounts
paid pursuant to this paragraph), will not be less than the corresponding amount
provided for under the Credit or this Agreement before giving effect to such
increased cost or reduction; provided that in no event shall any additional
amounts which constitute interest exceed what is considered, together with other
interest payments, the Highest Lawful Rate.
3. Availments under the Credit may be effected through Bank or any
advising or confirming bank (the "Payor") at the then current buying rate of the
Payor for banker's sight drafts at the place from which the Payor is to receive
reimbursement under the terms of the Credit, it being understood and further
agreed: (a) that the amount(s) disbursed to the beneficiary(ies) relative
thereto may be in the currency local to the site of the Payor, and may be
reduced by any taxes and/or other charges whether of the Payor or otherwise, and
(b) that an advice of an availment under the Credit from the Payor shall be
sufficient evidence to Bank of an availment under the Credit, and such evidence
thereof shall be binding upon Applicants for the purposes of this Agreement.
4. If at any time(s) any funds and/or securities are paid to or deposited
with or under the control of Bank, not as payment under paragraph 1 hereof, but
to be held relative hereto, same shall be held as collateral security for the
Obligations (as hereinafter defined) and without Applicants having any right to
dispose of the same while any Obligations (as hereinafter defined) exist under
this Agreement, but with the discretionary right in Bank to release or surrender
all or any part of said funds and/or securities to or upon the order of
Applicants. If any such funds are available to Bank at its office in the
currency of the Credit at any time after any payment may become due hereunder,
Bank may (acting in each instance in its discretion and without being required
to make any prior demand for payment hereunder) apply all or any part thereof at
any time(s) on account of the Obligations (as hereinafter defined), irrespective
of the then current rate of exchange. Should the aggregate market value of any
such funds and/or securities at any time(s) suffer any decline, or should any
such property be unavialable at any time for any reason to Bank at its office or
fail to conform to legal requirements. Applicants will, upon demand, make such
payment(s) on account of the aforesaid Obligations, or as additional collateral
therefor, will deposit and pledge with Bank additional property that is
satisfactory to Bank. If any such funds as aforesaid be other than United States
Dollars and occasion arises for a refund by Bank of all or any portion thereof,
it shall be optional with Bank as to whether refund will be made (a) in United
States Dollars at the buying rate for the foreign currency on the date of
refund, or (b) in the amount and kind of the foreign currency on the date of
refund, or (c) by instructing a branch or correspondent of Bank to hold the
refundable amount of foreign currency for Applicants' account and risk.
5. Applicants hereby pledge, assign and hypothecate to Bank as security
for any and all of the obligations and liabilities of Applicants with respect
to the Credit, the Application portion of this Agreement (the "Application") and
this Agreement, whether hereinbefore or hereinafter referred to, now or
hereafter existing (herein called the "Obligations"), any and all property of
Applicants now or at any time(s) hereafter in Bank's possession or control or in
the possession or control of any third party acting in Bank's behalf, whether
for the express purpose of being used by Bank as collateral security or for
safekeeping or for any other or different purpose, including such property as
may be in transit by mail or carrier to or from Bank, a lien and security
interest being hereby given Bank upon and in any and all such property for the
aggregate amount of the Obligations; and Applicants authorize Bank, at Bank's
option, at any time(s), whether or not the property then held by Bank as
security hereunder is deemed by Bank to be adequate, to appropriate and apply to
or upon any and all of the Obligations, whether or not then due, any and all
monies now or hereafter with Bank on deposit or otherwise to the credit of
orbelonging to Applicants and in Bank's discretion, to hold any such monies as
security for any such Obligations until the exact amount thereof, if any, shall
have been definitely ascertained by Bank. Bank's rights, liens and security
interests hereunder shall continue unimpaired, and Applicants shall be and
remain obligated in accordance with the terms and provisions hereof,
notwithstanding the release or substitution of any property which may be held as
collateral hereunder at any time(s) or of any rights or interests therein, or
any delay, extension of time, renewal, compromise or other indulgence granted by
Bank in reference to any of the Obligations, or any promissory note, draft, xxxx
of exchange or other instrument given Bank in connection with any of the
Obligations, Applicants, and each of them individually, hereby waiving notice of
any such delay, extension, release, substitution, renewal, compromise or other
indulgence, and hereby consenting to be bound thereby as fully and effectually
as if Applicants had expressly agreed thereto in advance.
6. Applicants agree at any time and from time to time, on demand, (i) to
deliver, convey, transfer or assign to Bank, as security for any and all of the
Obligations, and also for any and all other obligations and/or liabilities,
absolute or contingent, due or to become due, which are now, or may at any time
hereafter, be owing by Applicants to Bank, additional security of a value and
character satisfactory to Bank, or (ii) to make such cash payment(s) in partial
or full satisfaction of the Obligations of such other obligations or liabilities
as Bank in its sole discretion may require.
7. Bank is hereby authorized, as its option and without any obligation to
do so, to transfer to and/or register in the name(s) of Bank's nominee(s) all or
any part of the property which may be held by it as security at any time(s)
hereunder, and to do so before or after the maturity of any of the Obligations
and with or without notice to Applicants.
8. The word "property" as used herein includes goods and merchandise (as
well as any and all documents relative thereto), securities, funds, monies
(whether United States currency or otherwise), choses in action and any and all
other forms of property, whether real, personal or mixed, tangible or
intangible, and any right or interest of Applicants, or any one or more of them,
therein or thereto. Bank is authorized, at its option, to file financing
statement(s) and continuation statement(s) without the signature of Applicants
with respect to any of the property, and Applicants jointly and severally agree
to pay the cost of any such filing and to sign upon request any instruments,
documents or other papers which Bank may require to perfect its security
interest in the property. A cartoon, photographic or other reproduction of this
Agreement shall be sufficient as a financing statement.
Page 2 of 4
9. No proceeds of the Credit will be used for any purpose which would
constitute the Credit a "purpose credit" within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System.
10. Applicants jointly and severally represent and warrant that (a) each
of them which is not a natural person is duly organized in good standing and
validly existing with full power and authority to execute this Agreement; (b)
the execution of this Agreement has been duly authorized by all necessary action
on the part of all Applicants and does not violate or contravene any law,
regulation, order or decree or the articles of incorporation, bylaws,
partnership agreement or any other organizational document of any Applicant; (c)
all requisite licenses, permits and franchises for the operation of Applicant's
business are in full force and effect; (d) any financial statements delivered to
Bank in connection herewith fairly present the financial condition and results
of operations of the subject or subjects thereof as of the dates and for the
periods indicated therein, and no material adverse change has occurred in the
financial condition of the subject or subjects thereof since the dates thereof;
(e) except as disclosed in writing to Bank in connection herewith, no litigation
or administrative proceeding is pending or threatened against any Applicant; and
(f) each Applicant has filed all tax returns required to have been filed and
paid all taxes shown thereon to be due. Applicants further represent and warrant
to Bank that Applicants are not now in violation of any applicable limitations
on the aggregate amount of loans that may be made to a borrower by any lender
and that issuance of the Credit by Bank will not be, or cause the aggregate
credit outstanding to any or all Applicants to exceed such limitations, and
Applicants covenant and agree that Applicants will at all times during the term
of this Agreement fully comply with and fully advise Bank and Member, if any, of
all circumstances relevant to, all applicable lending limits.
11. Upon the non-performance of any of the promises to pay herein set
forth, or upon the non-payment of any of the Obligations or other obligations or
liabilities of Applicants herein, or upon the failure of Applicants to furnish
satisfactory additional collateral or to make payments on account as hereinabove
agreed or to perform or comply with any of the other terms or provisions of this
Agreement, or in the event of default under any security agreement or guaranty
or other document securing or guaranteeing Applicants payment and performance of
the Obligations, or should any information supplied on behalf of Applicants
prove to be incorrect, false or misleading, or in the event of the death.
Insolvency, business failure, dissolution or termination of existence of any
Applicant, or in case any petition in bankruptcy is filed by or against any
Applicant, or any proceeding is commenced for the relief or readjustment of any
indebtedness of any Applicant, either through reorganization, composition,
extension or otherwise, or if any Applicant should make an assignment for the
benefit of creditors or take advantage of any insolvency law, or if a receiver
for any property of any Applicant should be appointed at any time, and in each
case any of the foregoing is initiated under laws or regulations of any
jurisdiction relating to the relief of debtors, then upon such occurrence, any
or all of the Obligations shall, at Bank's option, become due and payable
immediately, without demand or notice, notice of acceleration and of intention
to accelerate being hereby expressly waived by each Applicant.
12. Upon Applicants' failure to pay any Obligation when due, as aforesaid,
or upon the occurrence of any of the events described in paragraph 11 above,
Bank shall have, in addition to all other rights and remedies allowed by law,
the right immediately, without demand for performance and without notice of
intention to sell or of the time or place of sale or of redemption or other
notice or demand whatsoever to any Applicant, all of which are hereby expressly
waived, and without advertisement, to sell at any broker's board, or at public
or private sale, or to grant options to purchase, or otherwise to realize upon
the whole or from time to time any part of the collateral upon which Bank shall
have a security interest or lien as aforesaid, or any interest which Applicants
may have therein, and after deducting from the proceeds of sale or other
disposition of the said collateral all expenses (including but not limited to
reasonable attorney's fees for legal services of every kind and other expenses
as set forth below) shall apply the residue of such proceeds toward the payment
of any of the Obligations, in such order as Bank shall elect, and whether then
due or not due, Applicants remaining liable for any deficiency remaining unpaid
after such application. If notice of any sale or other disposition is required
by law to be given, each Applicant hereby agrees that a notice sent at least two
(2) days before the time of any intended public sale or of the time after which
any private sale or other disposition of the said collateral is to be made,
shall be reasonable notice of such sale or other disposition. Applicants also
agree to assemble the said collateral at such place or places as Bank designates
by written notice. At any such sale or other disposition, Bank may itself
purchase the whole or any part of the said collateral sold, free from any right
of redemption on the part of Applicants and free of any right to require sale in
inverse order of alienation, which rights are hereby waived and released.
Applicants agree that the said collateral secures, and further agree to pay on
demand, whether or not any default by Applicants has occurred, all expenses
(including but not limited to: reasonable attorneys' fees for legal services of
every kind, the cost of any Insurance and the payment of all taxes or other
charges) of, or incidental to, the custody, care, appraisal, sale or collection
of, or realization upon, any of the said collateral or in any way relating to
the enforcement or protection of Bank's rights hereunder. Where applicable, Bank
shall have, to the maximum extent permitted by applicable law, in addition to
and cumulative of the rights hereinabove provided, all of the rights and
remedies provided to a secured party by the Uniform Commercial Code in effect in
the State of Texas on the date of this Agreement.
13. No delay on the part of Bank in exercising any power of sale, lien,
option or other right hereunder, and no notice or demand which may be given or
made upon Applicants by Bank with respect to any power of sale, lien or other
right hereunder, shall constitute a waiver thereof or limit or impair the right
of Bank to take any action or to exercise any power of sale, lien, option or any
other right hereunder, without demand or notice or prejudice to the rights of
Bank as against Applicants in any respect. Any and all rights and liens of Bank
hereunder shall continue unimpaired, and Applicants shall be and remain
obligated in accordance with the terms and provisions hereof, notwithstanding
the release or substitution of any property as referred to herein, or of any
rights or interests therein, or any delay, extension of time, renewal,
compromise or other indulgence granted by Bank in reference to any of the
Obligations, Applicants each hereby waiving notice of any such delay, extension,
release, substitution, renewal, compromise or other indulgence, and each hereby
consenting to be bound thereby as fully and effectually as if Applicants had
expressly and specifically agreed thereto.
14. The users and beneficiaries of the Credit shall be deemed Applicants'
agents, and Applicants assume all risks of the acts or omissions of the users or
beneficiaries of the Credit. Neither Bank nor its correspondents or affiliates
shall assume any liability to anyone for failure to pay or accept if such
failure is due to any restriction in force at the time and place of presentment,
and Applicants agree to indemnify Bank from any consequences that may arise
therefrom. Neither Bank or Bank's correspondents or affiliates shall be liable
or responsible in any respect for any (a) error, omission, interruption or delay
in transmission, dispatch or delivery of any one or more messages or advices in
connection with the Application or the Credit, whether transmitted by cable,
radio, telegraph, twx, wireless, mail, electronic mail, telex, telefax,
telecopy, SWIFT, or otherwise and despite any cipher or code which may be
employed, or (b) errors in translation or for errors in interpretation of
technical terms, or (c) action, inaction or omission which may be taken or
suffered by it or them in good faith or through inadvertence in identifying or
failing to identify any beneficiary(ies) or otherwise in connection with the
Credit, or (d) validity, sufficiency or genuineness of document(s) even if such
document(s) should in fact prove to be in any or all respects invalid or
insufficient, fraudulent or forged, or (e) act, error, neglect or default,
omission, insolvency or failure in business of any of Bank's correspondents. The
happening of any one or more of the contingencies described above shall not
affect, impair or prevent the vesting of any of Bank's rights or powers
hereunder. In furtherance and extension and not in limitation of the specific
provisions hereinbefore set forth, it is hereby further agreed that any action,
inaction, or omission taken or suffered by Bank or by any of its correspondents
under or in connection with the Credit or the relative drafts, demands,
documents or property. If in good faith and in conformity with such foreign or
domestic laws, customs or regulations as Bank or any of its correspondents may
deem to be applicable thereto, shall be binding upon Applicants and shall not
place Bank or any of its correspondents under any resulting liability to
Applicants. If the Credit or this Agreement shall be terminated or revoked by
operation of law as to any Applicant, or if any Applicant shall restrain the
payment of the Credit by court order or any other means, or if this Agreement or
the Credit are amended, modified, revoked or cancelled as provided for herein
and any dispute, claim, demand or cause of action arises with respect thereto.
Applicants will jointly and severally indemnify and save Bank harmless from any
and all loss, cost, damage, expense, suit, claim, cause of action, judgment and
attorneys' fees which may be suffered or incurred by Bank, whether caused in
whole or in part by the negligence of Bank or any correspondent or affiliate of
Bank.
15. The Credit and this Agreement may be amended, modified, cancelled or
revoked only upon the receipt by Bank from all Applicants of a written request
therefor, and then only such terms and conditions as Bank may prescribe and then
only by a writing signed by all Applicants, the beneficiaries and Bank.
Notwithstanding the foregoing, however, Bank may, upon receipt of a written
request therefor, signed by all Applicants, extend the expiration date and/or
increase the amount of the Credit without the written or oral acceptance or
consent of any or all beneficiaries of the Credit. Bank is authorized without
reference to or approval by any Applicant to set forth the terms appearing on
the Application portion hereof in the Credit and to modify or alter such terms
in such language as Bank may deem appropriate, with such variations from such
terms as Bank may at its discretion determine (which determination shall be
conclusive and binding upon Applicants) are necessary and are not materially
inconsistent with such terms.
16. Notwithstanding anything herein (except paragraph 17) to the contrary,
it is understood and agreed that, if the Credit is issued in favor of a
sovereign or commercial entity which is to issue a commitment or guarantee on
Applicants' behalf in connection herewith, each Applicant shall remains liable
on the Credit until Bank is fully released in writing by such entity. Applicants
jointly and severally agree to pay (a) all costs and expenses incurred by Bank
in connection of amounts advanced under the Credit and any and all other amounts
remaining unpaid hereunder through probate, reorganization, bankruptcy or any
other proceeding and (b) reasonable attorneys' fees when and if collection of
any such amount is placed in the hands of an attorney for collection after
default.
17. Notwithstanding anything contained herein or in any other separate
security agreement or other document executed heretofore, herewith or hereafter
in connection with or related to this credit obligation, if this is a consumer
credit obligation (as defined or described in 12 C.F.R. 227. Regulation AA,
promulgated by the Federal Reserve Board), the security for this credit
obligation shall not extend to any non-possessory security interest in household
goods (as defined in said Regulation AA) other than a purchase money security
interest, and no waiver of any notice contained herein or therein shall be
construed under any circumstances to extend to any waiver of notice prohibited
by Regulation AA.
18. This Agreement and the Credit are subject to and incorporate fully
herein (except as expressly modified herein or in the Credit) the Uniform
Customs and Practice for Documentary Credits (1993 Revision). International
Chamber of Commerce Publication No. 500, (hereinafter referred to as "The
Uniform Customs"). This Agreement and the rights of Applicants and Bank
hereunder shall be subject to and governed by the substantive laws of the State
of Texas, without regard to the rules regarding conflicts of laws, except when
the substantive laws of the State of Texas conflict with the Uniform Customs, in
which event the provisions of the Uniform Customs shall govern.
Page 3 of 4
19. If the Credit is governed by the laws of a foreign jurisdiction, the
Credit may require Bank to pay funds as Bank's primary obligation in the event
Bank is, or in good xxxxx xxxxx itself to be, obligated to advance funds to the
beneficiary(ies) hereof. Applicants hereby expressly jointly and severally agree
to reimburse Bank on demand for all such advances made, notwithstanding any
expiration or cancellation of the Credit by Bank or under Texas law or the
Uniform Customs and even though Applicants may have an unresolved controversy
with a third party or the beneficiary(ies) related to the transaction for which
the Credit is being sought, including the proper interpretation of the law of
such foreign jurisdiction. In the event Applicants have a dispute with the
beneficiary(ies) or a third party, Applicants are required to reimburse Bank on
demand, and Applicants' remedy is to seek reimbursement from the
beneficiary(ies) or the third party. Bank is expressly authorized to presume
that all demands for payment made by the beneficiary(ies) hereof are made in
accordance with such foreign law.
20. Unless otherwise expressly stated herein or in the Credit, neither the
Credit nor this Agreement may be assigned by the beneficiary(ies) or any
Applicant without the prior written consent of Bank. Bank may assign or transfer
the Credit or this Agreement, or any instrument(s) evidencing all or any of the
Obligations, and may deliver all or any of the property then held as security
therefor, to the transferee(s) of Bank, who shall thereupon become vested with
all of the powers and rights in respect thereof given to Bank herein or in the
instrument(s) transferred, and Bank shall thereafter be forever relieved and
fully discharged from any liabilities or responsibility with respect thereto,
but Bank shall retain all rights and powers hereby given with respect to any and
all instrument(s), rights or property not so transferred.
21. This Agreement, the Application and the Credit constitute the entire
agreement among the parties hereto, except for such agreements executed in
connection herewith which specifically refer to this Agreement, the Application
or the Credit or which grant to Bank a lien or security interest to secure any
debts or obligations of any Applicant, regardless of any reference or lack
thereof to this Agreement, Application or the Credit. Terms used herein in the
plural number shall be construed as singular as the context requires and vice
versa.
22. Although the Credit may refer to a particular agreement or other
obligation to the beneficiary(ies) executed by Applicants, the terms of such
agreement are not in any manner incorporated herein. Bank shall therefore make
payment upon demand under the Credit unless it appears that such demand, on its
face, does not comply with the terms of the Credit. Such payment shall be made
without regard to performance of any obligation by any contracting party under
such agreement.
23. Applicants agree that at all times now and hereafter they will
indemnify and save Bank harmless from and against all suits, judgments,
liabilities, losses or damages to it arising in any manner, including negligence
on the part of Bank in connection with the Credit or this Agreement, unless due
to gross negligence or willful misconduct on the part of Bank and from and
against all costs, charges and expenses, including in connection with all legal
proceedings, whether groundless or otherwise, attorneys' fees, it being the
purpose of this Agreement to protect Bank fully in the premises.
24. Applicants agree that no acceptance or payment of overdrafts or
irregular drafts or of drafts with irregular documents attached shall, if
assented to or approved by any Applicant orally or in writing, or if Bank in
good faith accepts an indemnity limited to the actual damage, if any, caused by
such irregularity or discrepancy, impair any rights which Bank may have under
this Agreement. In case of any variation between the documents called for by the
Credit or this Agreement and the documents accepted by Bank or Bank's
correspondents. Applicants shall each be deemed conclusively to have waived any
right to object to such variation with respect to any action by Bank or Bank's
correspondents relating to such documents and to have ratified and approved such
action as having been taken on Applicant's direction, unless Applicants
Immediately upon receipt of such documents (and prior to receipt thereof by any
beneficiary or user of the Credit) file objection with Bank in writing, or
unless Bank has been provided with an indemnity, as aforesaid. Applicants
acknowledge and agree that, the information in the Application portion of this
Agreement may be transmitted to Bank and relied on by Bank in issuing the Credit
by any means acceptable to Bank, including without limitation, SWIFT, electronic
mail, telex, telephone, twx, telecopy or telefax. Applicants, Member and
Correspondent (both as hereinafter defined) agree to hold Bank harmless from and
against all claims, expenses, costs, liabilities, attorneys' fees, suits,
judgments, and causes of action arising out of any discrepancy between the
information in this Agreement, including without limitation, the Application,
and that transmitted to, or received by, Bank.
25. Issuance by Bank of the Credit applied for herein shal constitute
acceptance by Bank of this Agreement.
26. If this Agreement contains the signature of a bank which is subsidiary
of Chase Bank of Texas, National Association (hereinafter referred to as the
"Member") or of a correspondent bank of Bank (hereinafter referred to as the
"Correspondent"), then this paragraph shall be applicable. In consideration of
Bank's issuing the Credit at the request of Correspondent or Member, as
applicable, Correspondent or Member as applicable, agrees that it is an
Applicant hereunder with respect to Bank, and it agrees to reimburse Bank on
demand and authorizes bank, without demand or any notice whatsoever to charge,
setoff against and otherwise exercise any rights Bank may have with respect to,
any monies now or hereafter on deposit with or otherwise to the credit of or
belonging to Correspondent or Member, as applicable, at or with Bank for any and
all Obligations hereunder, whether or not any demand has been made on Applicants
hereunder. As an Applicant hereunder, each Correspondent or Member Bank, as
applicable, makes the same representations, warranties, covenants and agreements
to Bank as the Applicants in paragraph 10 hereof and otherwise provided in this
Agreement; provided, however unless otherwise agreed to in writing, or stated
herein neither Member nor Correspondent agrees to furnish any security for this
Agreement or the Credit other than the aforementioned monies. Upon Member's or
Correspondent's, as applicable, payment to Bank of all Obligations hereunder,
Bank thereupon automatically, and without further action on the part of any
party, assigns and transfers its rights hereunder to Correspondent or Member, as
applicable, who shall be fully subrogated thereto, and Applicants agree that any
right, claim or cause of action which any of them may have hereunder or under
the Credit shall be made only against Correspondent or Member, as applicable,
and Applicants agree to indemnify and hold Bank harmless from and against any
claims, costs, expenses, suits or causes of action by Applicants or any
beneficiary or user of the Credit. Applicants hereby agree that Correspondent or
Member, as applicable, shall also (in addition to Bank) have the same rights,
remedies, security interests and other liens as are stated herein, to the same
effect as if additional paragraphs were fully written herein containing the same
terms but substituting "Correspondent" or "Member" for "Bank" throughout. All
references to secured party, beneficiary or other similar term contained in any
deed of trust, security agreement, financing statement or other document or
instrument executed contemporaneously herewith or previously executed by any of
the Applicants for the benefit of Member or Correspondent shall be deemed to
include Bank as well as Member or Correspondent. All such security agreements,
financing statements, deeds of trust and other documents and instruments and
instruments are amended to the extent necessary in order that the Obligations of
Applicants hereunder are secured thereby and by the collateral described therein
on a pari passu basis with, and in addition to, any other obligations secured
thereby.
27. [ ] If this box is checked this paragraph is applicable. Applicants
have requested Bank to issue a Credit which the Bank may, but is not required,
to renew on an annual basis until the "latest date" indicated on the Application
or such later date as any Applicant may hereafter request in writing. Applicants
agree that Bank has made no commitment to any beneficiary or any Applicant, and
that Bank has no obligation, to renew the Credit at or prior to the original or
any subsequent expiration date. Except as expressly provided in the Credit. Bank
shall have no liability to any beneficiary for the renewal of, or failure to
renew, the Credit for any reason. Except as hereinafter agreed, the Bank shall
not have any liability to Applicants due to the renewal of, or failure to renew,
the Credit for any reason. Except to the extent any notice may be required in
the Credit, Bank is not required to notify any beneficiary or Applicant of the
renewal, or failure to renew, the Credit. Subject to the other conditions and
indemnities in this Agreement, including negligence by Bank, Bank and Applicants
agree that Bank will not renew the Credit if it receives, and an authorized
officer of Bank acknowledges such receipt in writing, written notification from
any Applicant at least 14 days and not more than 30 days prior to the earliest
date on which, pursuant to the terms of the Credit, Bank must either renew or
decline to renew the Credit or notify beneficiary(ies) of its decision to renew
or not to renew the Credit. Such written notification must specify to the
satisfaction of Bank the Credit, the then current expiration date, and such
Applicant's request that the Credit not be renewed.
This written loan agreement represents the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.
APPLICANT: ____________________________________
Printed Name
_________________________________
Printed Name By:_________________________________
By:______________________________ Authorized Signature
Authorized Signature
CORRESPONDENT/MEMBER BANK:
_________________________________ ____________________________________
Printed Name Printed Name
By:______________________________ By:_________________________________
Authorized Signature Authorized Signature
BANK ACCEPTANCE: The Bank's Acceptance evidenced by the undersigned authorized
representative's signature is provided as its acknowledgement that this
agreement represents the final agreement by the parties which may not be
contradicted by evidence of prior contemporaneous, or subsequent oral agreements
between the parties.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By:______________________________________
Page 4 of 4
EXHIBIT I-2
TO
AMENDED AND RESTATED CREDIT AGREEMENT
L/C Application for Commercial Letters of Credit
------------------------------------------------
[LOGO OF CHASE BANK OF TEXAS APPEARS HERE]
APPLICATION AND AGREEMENT FOR COMMERCIAL LETTER OF CREDIT
TO: FOR BANK USE ONLY
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION Date:_______________________L/C No.:__________________________
X.X.XXX 2558 Applicant No.:________________________________________________
XXXXXXX, XXXXX 00000-0000 Beneficiary No.:______________________________________________
Date of this Application ________________ Advising Bank No.:____________________________________________
Please Issue an Irrevocable ([_] Transferable) letter of credit as set forth below and forward same by [_] Air mail [_] Brief Telex
[_] [_] Full Telex (No written confirmation to follow)
------------------------------------------------------------------------------------------------------------------------------------
Applicant(s) (Name and Address) Advising Bank (if blank, correspondent bank)
Account Number
--------------------------------------------------
Amount ___________________ __________________
Figures Currency
Amount in Words _____________________________________________________________________________
Beneficiary: (Name and Address)
[_] About (+ or -10%)
__________________________________________________
Partial Shipments [_] Allowed [_] Not Allowed
Transhipment [_] Allowed [_] Not Allowed
__________________________________________________
Shipment/Discharge/Taking in charge ______________________________________________________________________________
Against documents detailed herein and beneficiary's draft(s) drawn at [_]
Sight
From/At __________________________________________
Not Later Than ___________________________________ [_] ______ Days B/L Date [_]___________ Days After Sight [_] ____________ on
To _______________________________________________ Chase Bank of Texas, N.A. or ________________________________________________
___________________________________________________________________________________________________________________________________
Expiry Date Documents must be presented within _____ days after shipping date, but within
At the Counters of the Drawee Bank validity of credit.
___________________________________________________________________________________________________________________________________
[_] F.O.B. [_] F.A.S. [_] C.F.R. [_] C.I.F. [_] C.I.P. [_] F.C.A [_] Other:___________________________
Name of City ______________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
Documents required:
[_] Commercial invoice manually signed in original and _______ copies stating that it covers: (please mention commodity only,
omitting excessive details)
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
[_] Certificate of Origin in Original and ______ copies
[_] Certificate of Weight and Measurement in Original and ____ copies [_] Mill Test Certificate in Original and _____ copies.
[_] Special Customs invoice in Original and _____ copies [_] Special Steel Summary Invoice in Original and ___ copies.
[_] Packing List in Original and ____ copies
[_] Inspection Certificate manually signed and issued by _________________________________________________________________________
[_] Negotiable Marine/Air Insurance Policy/Certificate in duplicate, for _______ % of invoice value
[_] Covering [_] All Risks [_] War Risks [_] Other Risks (please specify) __________________________________________________
[_] Copy of beneficiary's telex/fax sent to ____________________ within ______ days of shipment date advising details of shipment.
[_] Clean Railway Xxxx [_] Clean Truck Xxxx of Lading [_] Clean Air Waybill Consigned to: ___________________________________
[_] "Clean on Board" Marine Bills of Lading (full set required if more than one original has been issued) consigned to [_] order
of Chase Bank of Texas, N.A.
[_] to the order of __________________________________________________________________________________________________________
Notify: ______________________________________________________________________________________________________________________
Marked Freight [_] Collect [_] Prepaid
[_] Beneficiary's statement evidencing that 1 set of non-negotiable documents has been sent by [_] Fax to_______________________
within ____________ days of shipment. [_] Courier
Other documents:____________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
All documents to be forwarded in one cover by registered airmail, unless otherwise stated under Special Instructions.
Special Instructions: ______________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
All banking charges other than the issuing bank's are for [_] Beneficiary [_] Applicant
[_] Insurance effected by Applicants, who agree to keep insurance coverage in effect until this transaction is completed.
________________________________________________________________________________
WE HEREBY CERTIFY THAT TRANSACTIONS IN THE MERCHANDISE COVERED BY THIS
APPLICATION ARE NOT PROHIBITED UNDER THE FOREIGN ASSETS CONTROL REGULATIONS OF
THE UNITED STATES TREASURY DEPARTMENT OR THE DEPARTMENT OF COMMERCE EXPORT
ADMINISTRATION REGULATIONS AND THAT ANY IMPORTATION COVERED BY THIS APPLICATION
CONFORMS IN EVERY RESPECT WITH ALL EXISTING UNITED STATES GOVERNMENT AND OTHER
APPLICABLE REGULATIONS.
THE OPENING OF THIS CREDIT IS SUBJECT TO THE TERMS AND CONDITIONS AS SET FORTH
ON THE FOLLOWING PAGES, TO WHICH TERMS AND CONDITIONS WE AGREE. Please date and
sign this Application and Agreement on page 4 hereof.
_______________________________________________________________________________
Page 1 of 4
TERMS AND CONDITIONS FOR COMMERCIAL LETTER OF CREDIT
In consideration of the issuance of the letter of credit and all
renewals, extensions, replacements and amendments thereof (herein called the
"Credit") by Chase Bank of Texas, National Association (the "Bank") in
accordance with this Application and Agreement (this "Agreement"), the
undersigned (hereinafter called "Applicants," whether one or more) jointly and
severally agree to the following terms and conditions:
1. Applicants promise to pay to Bank on demand at 000 Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000, in United States currency as follows:
A. As to drafts, demands, or acceptances drawn under or purporting to be drawn
under the Credit which are payable in United States currency: (a) in the case of
each sight draft or demand, the amount paid thereon, or, if so demanded by Bank,
to pay Bank in advance, the amount required to pay such drafts or demands; and
(b) in the case of each acceptance or time draft, the amount thereof on demand,
but in any event not later than one business day prior to maturity, or, in case
the acceptance is not payable at Bank's office, then on demand, but in any event
in time to reach the place of payment in the ordinary course of the mails not
later than one business day prior to maturity, it being understood that Bank
will notify Applicants of the amount and date of maturity of each such
acceptance;
B. As to drafts, demands, or acceptances under or purporting to be under the
Credit which are payable in currency other than United States currency: (a) in
the case of each sight draft or demand, either (i) the amount paid in the
currency of the Credit at the bank of Bank's choice in the country of such
currency, or (ii) the equivalent of the amount paid, in United States currency,
at Bank's then current selling rate for such currency; and (b) in the case of
each acceptance of time draft, to pay Bank, on demand, but in any event in time
to reach the place of payment in the ordinary course of the mails not later than
one business day prior to maturity, either (i) the amount paid in the currency
of the Credit at the bank of Bank's choice in the country of such currency, or
(iii) the equivalent of the acceptance in United States currency at Bank's then
current selling rate for the currency in which the acceptance is payable;
C. All taxes, levies, imposts, duties, charges, fees, deductions or
withholdings of any nature whatsoever and by whomsoever and wherever imposed in
connection with this Agreement the Credit or any transactions hereunder or
thereunder.
D. All commissions of Bank, any Member or Correspondent (as hereinafter
defined) or its correspondents, as applicable, at the rate agreed upon or as
specified by Bank or such other entity, and all charges and expenses incurred by
Bank for or in connection with this Agreement, the Credit or any transaction
hereunder or thereunder; and
E. Interest on all amounts owing to Bank hereunder at the Highest Lawful Rate
(as hereinafter defined) permitted by applicable laws of the United States of
America or the State of Texas, from time to time in effect, whichever shall
permit the highest lawful rate (hereinafter referred to as "the Highest Lawful
Rate"). At all times, if any, that Chapter One of Title 79, Texas Revised Civil
Statues, 1925, as amended, establishes the Highest Lawful Rate, the Highest
Lawful Rate shall be the "indicated" rate ceiling (as defined therein) from time
to time in effect. It is the intention of Applicants and Bank to conform
strictly to applicable usury laws. It is therefore agreed that: (i) if, for any
reason, the interest received for the actual period of the existence of any
loan by Bank hereunder exceeds the Highest Lawful Rate, Bank shall refund to
Applicants the amount of the excess or shall credit the amount of the excess
against amounts owing hereunder and shall not be subject to any of the penalties
provided by law for contracting for, charging, or receiving interest in excess
of the Highest Lawful Rate, (ii) the aggregate of all interest and other charges
constituting interest under applicable law and contracted for, chargeable or
receivable under this Agreement or otherwise in connection with this Agreement
or the Credit, shall not for the actual period of the existence of any loan
hereunder exceed the maximum amount of interest, nor produce a rate in excess of
the Highest Lawful Rate, (iii) if, for any reason, usurious interest is
contracted for, charged or received, then the sole remedy of Applicants shall be
to receive a refund thereof or a credit on the accrued and unpaid interest and
unpaid principal under this Agreement equal to the usurious interest. It being
agreed that usurious interest shall mean the amount by which the total interest
contracted for, charged or received exceeds the amount of interest allowed by
applicable law; and this Agreement shall be automatically deemed reformed so as
to permit only the collection of the Highest Lawful Rate of interest, and (iv)
determination of the rate of interest on any loan evidenced hereby shall be made
by amortizing, prorating, allocating, and spreading, in equal parts during the
period of the full stated term of such loan, all interest at any time contracted
for, charged or received from Applicants in connection with such loan.
F. Applicants assume all risks (political, economic or otherwise) of
disruptions or interruptions in currency exchange with respect to any demand
payable in other than United States currency, and if there is no then prevailing
exchange rate, Bank may obtain the non-United States currency from any
commercially reasonable source, in which case Applicants shall pay Bank's cost
therefor, inclusive of all expenses, in United States currency.
G. Demand, for all purposes of this Agreement, shall be considered made at the
time Bank mails, telephones or otherwise sends notification to Applicants.
2. Applicants agree that if because of any law or regulation, or because
of any change in any existing law or regulation, or in the interpretation
thereof by any official authority, whether or not having the force of law, which
comes into effect after the date of this Agreement, (a) Bank or Applicants
should, with respect to this Agreement, the Credit or any transactions hereunder
or thereunder, be subject to any tax, charge, fee, insurance premium, deduction
or withholding of any kind whatsoever, or (b) reserve requirements, or changes
in existing reserve requirements, should be imposed on Bank with respect to this
Agreement or the Credit or any transactions hereunder or thereunder, and if any
of the above-mentioned measures, or any other similar measure, should result in
(i) any increase in the cost to Bank of issuing and maintaining the Credit
pursuant to this Agreement or of any transaction under or in connection with the
Credit or this Agreement, or (ii) any reduction in the payment or deposit of any
amount (principal, interest fee, commission or otherwise) receivable by Bank in
respect of the Credit or this Agreement or of any transaction under the Credit
or this Agreement then Applicants shall pay to Bank upon demand such increased
cost or reduction, including such additional amounts as may be necessary so that
every net payment or deposit after deduction or withholding for or on account
of such payment or deposit (including any taxes levied on additional amounts
paid pursuant to this paragraph), will not be less than the corresponding amount
provided for under the Credit or this Agreement before giving effect to such
increased cost or reduction; provided that in no event shall any additional
amounts which constitute interest exceed what is considered, together with other
interest payments, the Highest Lawful Rate.
3. Applicants hereby recognize and admit the Bank's ownership of and
unqualified right to the possession and disposal of, and do hereby grant to Bank
a security interest in, all property shipped or warehoused under or pursuant to
or in connection with the Credit and in all things in any way relative thereto
and the drafts, demands and acceptances drawn thereunder, whether or not
released to or by Bank on trust or bailee receipt or other form of security
agreement and also in and to all shipping documents, warehouse receipts, trust
or bailee receipts, policies or certificates of insurance and any other
documents accompanying or relative to drafts drawn under the Credit, whether or
not released to Applicants on trust or bailee receipt or other form of security
agreement, and in and to the proceeds of each and all the foregoing, until such
time as all the obligations or liabilities of the Applicants pursuant to the
Credit, the Application and this Agreement, now or hereafter existing (the
"Obligations") have been fully paid and discharged; and that all or any of the
foregoing property and documents, and the proceeds of any thereof, coming into
the possession of Bank or any of its correspondents, may be held and disposed of
by Bank as hereinafter provided; and the receipt by Bank, or any of its
correspondents, at any time of other security, of whatsoever nature, including
cash, shall not be deemed a waiver of any of Bank's rights or powers granted or
acknowledged herein.
4. In the event that Bank delivers to Applicants or upon Applicant's
order any documents or any property with respect to the Credit prior to Bank's
having received reimbursement with respect to the relative drafts, acceptances,
demands or receipts as herein provided, Applicants further agree to execute and
deliver to Bank a trust receipt or other security agreement and a financing
statement or like statement all in form acceptable to Bank and pay all
attorneys', filing and recording fees.
5. Applicants hereby pledge, assign and hypothecate to Bank as security
for any and all of the Obligations, any and all property of Applicants now or at
any time(s) hereafter in Bank's possession or control, or that of any third
party acting in Bank's behalf whether for the express purpose of being used by
Bank as collateral security of for safekeeping or for any other purpose,
including such property as may be in transit by mail or carrier to or from Bank,
a lien and security interest being hereby granted Bank upon and in any and all
such property for the aggregate amount of the Obligations; and Applicants
authorize Bank, at Bank's option, at any time(s), whether or not the property
then held by Bank as security hereunder is deemed by Bank to be adequate, to
appropriate and apply upon any and all of the Obligations, whether or not then
due, any and all monies now or hereafter with Bank on deposit or otherwise to
the credit of or belonging to Applicants and in Bank's discretion, to hold any
such monies as security for Obligations until the exact amount of such
Obligations, if any, shall have been definitely ascertained by Bank. Bank's
rights, liens and security interests hereunder shall continue unimpaired, and
Applicants shall be and remain obligated in accordance with the terms and
provisions hereof, notwithstanding the release or substitution of any property
which may be held as collateral hereunder at any time(s) or of any rights or
interests therein, or any delay, extension of time, release, substitution,
waiver, renewal, compromise or other indulgence granted by Bank in reference to
any of the Obligations, or any promissory note, draft, xxxx of exchange or other
instrument given Bank in connection with any of the Obligations, Applicants, and
each of them individually, hereby waiving notice of any such delay, extension,
release, substitution, waiver, renewal, compromise or other indulgence, and
hereby consenting to be bound thereby as fully and effectually as if Applicants
had expressly agreed thereto in advance.
6. Applicants agree at any time and from time to time, on demand, (i) to
deliver, convey, transfer or assign to Bank, as security for any and all of the
Obligations, and also for any and all other obligations and/or liabilities,
whether absolute or contingent due or to become due, which are now, or may at
any time hereafter, be owing by Applicants to Bank, additional security of a
value and character satisfactory to Bank, or (ii) to make such cash payment(s)
in partial or full satisfaction of the Obligations of such other obligations or
liabilities as Bank in its sole discretion may require.
7. Bank is hereby authorized, as its option and without any obligation to
do so, to transfer to or register in the name(s) of Bank's nominee(s) all or
any part of the property which may be held by it as security at any time(s)
hereunder, and to do so before or after the maturity of any of the Obligations
and with or without notice to Applicants.
8. Upon the non-performance of any of the promises to pay herein set
forth, or upon the non-payment of any of the Obligations or other obligations or
liabilities of Applicants herein, or upon the failure of Applicants to furnish
satisfactory additional collateral or to make payments on account as hereinabove
agreed, or to perform or comply with any of the other terms or provisions of
this Agreement or in the event of default under any security agreement or
guaranty or other document securing or guaranteeing Applicants' payment or
performance of the Obligations, or should any information supplied on behalf of
Applicants prove to be incorrect, false or misleading, or in the event of the
death, insolvency, business failure, dissolution or termination or existence of
any Applicant or in case any petition in bankruptcy is filed by or against any
Applicant or any proceeding is commenced for the relief or readjustment of any
indebtedness of any Applicant either through reorganization, corporation,
extension or otherwise, or if any Applicant should make an assignment for the
benefit of creditors or take advantage of any insolvency law, or if a receiver
of any property of any Applicant should be appointed at any time, and in each
case any of the foregoing is initiated under laws or regulations of any
jurisdiction relating to the relief of debtors, then upon such occurrence, any
or all of the Obligations shall, at Bank's option, become due and payable
immediately, without demand or notice, notice of acceleration and of intention
to accelerate being hereby expressly waived.
Page 2 of 4
9. Upon Applicants' failure to pay any Obligation when due, as aforesaid,
or upon the occurrence of any of the events described in paragraph 8 above. Bank
shall have, in addition to all other rights and remedies allowed by law, the
right immediately, without demand for performance and without notice of
intention to sell or of the time or place of sale or of redemption or other
notice or demand whatsoever to any Applicant, all of which are hereby expressly
waived and without advertisement, to sell at any broker's board, or at public or
private sale, or to grant options to purchase, or otherwise to realize upon the
whole or from time to time any part of the collateral upon which Bank shall have
a security interest or lien as aforesaid, or any interest which Applicants may
have therein, and after deducting from the proceeds of sale or other disposition
of the said collateral all expenses (including but not limited to reasonable
attorneys' fees for legal services of every kind and other expenses as set forth
below) shall apply the residue of such proceeds toward the payment of any of the
Obligations, in such order as Bank shall elect, and whether then due or not due,
Applicants remaining liable for any deficiency remaining unpaid after such
application. If notice of any sale or other disposition is required by law to be
given, Applicants hereby agree that a notice sent at least two (2) days before
the time of any intended public sale or of the time after which any private sale
or other disposition of the said collateral is to be made, shall be reasonable
notice of such sale or other disposition. Applicants also agree to assemble the
said collateral at such place or places as Bank designates by written notice. At
any such sale or other disposition, Bank may itself purchase the whole or any
part of the said collateral sold, free from any right of redemption on the part
of Applicants and free of any right to require sale in inverse order of
alienation, which rights are hereby waived and released. Applicants agree that
the said collateral secures, and further agree to pay on demand, whether or not
any default by Applicants has occurred, all expenses (including but not limited
to, reasonable attorneys' fees for legal services of every kind, the cost of any
insurance and the payment of all taxes or other charges) of, or incidental to,
the custody, care, appraisal, sale or collection of, or realization upon, any of
the said collateral or in any way relating to the enforcement or protection of
Bank's rights hereunder. Where applicable, Bank shall have, to the maximum
extent permitted by applicable law, in addition to and cumulative of the rights
hereinabove provided, all of the rights and remedies provided to a secured party
by the Uniform Commercial Code in effect in the State of Texas on the date of
this Agreement.
10. Bank and any of its correspondents may receive and accept as "bills of
lading" under the Credit any documents issued or purporting to be issued by or
on behalf of any carrier which acknowledge receipt of property for
transportation, whatever the specific provisions of such documents, and the date
of each such document shall be deemed the date of shipment of the property
mentioned therein; and such documents shall be deemed in order if such date is
within the time limit fixed by the Credit, and Bank may receive and accept as
documents of insurance either insurance policies or insurance certificates.
11. In the event of any change or modification with respect to: (a) the
amount or duration of the Credit; (b) the time or place of shipment of any
property thereunder; (c) the drawing, negotiation, presentation, acceptance, or
maturity of any drafts, acceptances or other documents; or (d) any of the other
terms or provisions of the Credit such change or modification being done at the
request of any Applicant this Agreement shall be binding upon Applicants in all
respects with regard to the Credit so changed or modified, inclusive of any
action taken by Bank or any of its correspondents.
12. The users and beneficiaries of the Credit shall be deemed Applicants'
agents, and Applicants assume all risks of the acts or omissions of the users or
beneficiaries of the Credit. Neither Bank nor its correspondents shall assume
any liability to anyone for failure to pay or accept if such failure is due to
any restriction in force at the time and place of presentment and Applicants
agree to indemnify Bank from any consequences that may arise therefrom. Neither
Bank nor Bank's correspondents shall be responsible: (a) for existence,
character, quality, quantity, condition, packing, value, or delivery of the
property purporting to be represented by documents; (b) for any difference in
character, quality, quantity, condition, packing, or value of the property from
that expressed in documents; (c) for the validity, sufficiency, or genuineness
of documents, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (d) for the time, place,
manner or order in which shipment is made; (e) for partial or incomplete
shipment, or failure or omission to ship any or all of the property referred to
in the Credit; (f) for the character, adequacy, validity or genuineness of any
insurance; (g) for the solvency or responsibility of any insurer, or for any
other risk connected with insurance; (h) for any deviation from instruction,
delay, default or fraud by the shipper or anyone else in connection with the
property or the shipping thereof or the documents; (i) for the solvency,
responsibility or relationship to the property of any party issuing any
documents in connection therewith; (j) for delay in arrival or failure to arrive
of either the property or any of the documents relating thereto; (k) for delay
in giving or failure to give notice of arrival or any other notice; (l) for any
breach of contract between the shippers or vendors and Applicants; (m) for
failure of any draft demand or acceptance to bear any reference or adequate
reference to the Credit or failure of documents to accompany and draft demand or
acceptance at negotiation, or failure to send forward documents apart from
drafts as required by the terms of the Credit (each of which provisions, if
contained in the Credit, may be waived by Bank); (n) for errors, omissions,
interruptions or delays in transmission or delivery of any messages by mail,
cable, telegraph, twx, wireless, telecopy, telefax, electronic mail, SWIFT or
otherwise, whether or not they be in or contain code; or, (o) for errors in
translation or for errors in interpretation of technical terms. Bank shall not
be responsible for any act, error, neglect or default, omission, insolvancy or
failure in business of any of its correspondents, and the happening of any one
or more of the contingencies referred to in the preceding sentence shall not
affect, impair or prevent the vesting of any of Bank's rights or powers
hereunder. In furtherance and extension and not in limitation of the specific
provisions hereinbefore set forth, it is hereby further agreed that any action,
inaction, or omission taken or suffered by Bank or by any of its correspondents
under or in connection with the Credit or the relative drafts, demands,
acceptances, documents or property, if in good faith and in conformity with such
foreign or domestic laws, customs or regulations as Bank or any of it
correspondents may deem to be applicable thereto, shall be binding upon
Applicants and shall not place Bank or any of its correspondents under any
resulting liability to Applicants. If the Credit or this Agreement shall be
terminated or revoked by operation of law as to any Applicant, or, if any
Applicant shall restrain the payment of the Credit by court order or any other
means, Applicants will jointly and severalty indemnify and save Bank harmless
from any and all loss, cost, damage, expense, suit, claim, cause of action,
judgement and attorneys' fees which may be suffered in incurred by Bank whether
caused in whole or in part by the negligence of Bank or any correspondent or
affiliate of Bank.
13. Applicants agree to procure promptly any required import, export or
other licenses, consents or certifications for the import, export or shipping of
any and all property shipped under or pursuant to or in connection with the
Credit to comply with any and all foreign and domestic government regulations,
rules and executive orders in regard to the shipment of any and all such
property or the financing thereof; to furnish such certificates in that respect
as Bank may at any time(s) require; to keep the property covered by insurance
satisfactory to Bank insured by insurers acceptable to Bank; and to assign the
policies or certificates of insurance to Bank, or to make the loss or adjustment
if any, payable to Bank, at its option, and to furnish Bank, if demanded, with
evidence with acceptance by the insurers by such assignment. Applicants certify
that neither the shipment of the property nor the origin thereof is such as
would render shipment or the issuance of or payment on the Credit in violation
of the laws, regulations, rules or executive orders of the United States of
America or of any other country having jurisdiction thereof.
14. No delay on Bank's part in exercising any power of sale or any other
rights or options hereunder, and no notice or demand which may be given to or
made upon Applicants by Bank with respect to any power of sale or other right or
option hereunder, shall constitute a waiver thereof, or limit or impaired Bank's
right to take any action or to exercise any power of sale, or any other rights
or options hereunder, without notice or demand, or prejudice Bank's rights as
against Applicants in any respect Bank will not be deemed to have waived any of
its rights unless Bank shall have signed such waiver in writing.
15. Applicants represent and warrant that each Applicant has the authority
and has obtained all approvals and consents necessary to enter into and perform
this Agreement, and that the entering into and performance of this Agreement
will not result in a breach of any of the terms and conditions of any agreement,
instrument, order or judgement under which any Applicant is a party or by which
any Applicant or its property may be bound or affected or under any charter
documents of any Applicant, and will not violate any provision of applicable
law. This Agreement is to remain in force and be applicable to all transactions
notwithstanding any change in the composition of any firm or firms, parties to
this Agreement, or users or beneficiaries of the Credit, whether such change
shall arise from the accession of one or more partners or from the death or
secession of any partner or partners or from the incorporation of any
partnership, or otherwise.
16. Applicants agree that at all times now and hereafter they will
indemnify and save Bank harmless from and against all suits, judgements,
liabilities, losses or damages to it arising in any manner, including negligence
on the part of the Bank, in connection with the Credit or this Agreement, unless
due to gross negligence or willful misconduct on the part of the Bank and from
and against all costs, charges and expenses, reasonable attorneys' fees and
those costs, charges and expenses incurred in connection with all legal
proceedings, whether groundless or otherwise, it being the purpose of this
Agreement to protect Bank fully in the premisers.
17. Applicants agree that no acceptance or payment of overdrafts or
irregular drafts or of draft with irregular documents attached shall, if
asserted to or approved by any Applicant orally or in writing, or if Bank in
good faith accepts an indemnity limited to the actual damage, if any, caused by
such irregularity or discrepancy, impair any rights which Bank may have under
this Agreement. In case of any variation between the documents called for by the
Credit or this agreement and the documents accepted by Bank or Bank's
correspondents, Applicants each shall be deemed conclusively to have waived any
right to object to such variation with respect to any action by Bank or Bank's
correspondents relating to such documents and to have ratified and approved such
action as having been taken on Applicants' directions, unless Applicants
immediately upon receipt of such documents (and prior to receipt thereof by any
beneficiary or user of the Credit) file objection with Bank in writing, or
unless Bank has been provided with an indemnity, as aforesaid, Applicants
acknowledge and agree that the information in the Application portion of this
Agreement (the "Application") may be transmitted to Bank and relied on by Bank
in issuing the Credit by any means acceptable to Bank, including without
invitation, SWIFT, electronic mail, telex, twx, telephone, telecopy or telefax.
Applicants, Member and Correspondent (both hereinafter defined) agree to hold
Bank harmless from and against all claims, expenses, costs, liabilities,
attorneys' fees, suits, judgements, and causes of action arising out of any
discrepancy between the information in this Agreement, including without
limitation, the Application, and that transmitted to, or received by Bank.
18. This Agreement and the Credit are subject to and incorporate fully
herein (except as expressly modified herein or in the Credit) the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, hereinafter referred to as "the
Uniformed Customs". This Agreement and the rights of Applicants and Bank
hereunder shall be subject to and governed by substantive laws of the State of
Texas, without reference to the rules regarding conflicts of laws, except when
the substantive laws of the State of Texas conflict with the Uniform Customs, in
which event the provisions of the Uniform Customs shall govern.
19. Issuance by Bank of the Credit applied for herein shall constitute
acceptance by Bank of this Agreement.
Page 3 of 4
20. If this Agreement contains the signature of a bank which is a
subsidiary of Chase Bank of Texas, N.A (hereinafter referred to as the
"Member") or of a correspondent bank of Bank (hereinafter referred to as the
"Correspondent"), then this Paragraph shall be applicable. In consideration of
Bank's issuing the Credit at the request of Correspondent or Member, as
applicable, Correspondent or Member as applicable, agrees that it is an
Applicant hereunder with respect to Bank, and it agrees to reimburse Bank on
demand and authorizes Bank, without demand or any notice whatsoever, to charge,
setoff against and otherwise exercise any rights Bank may have with respect to,
any monies now or hereafter on deposit with or otherwise to the credit of or
belonging to Correspondent or Member, as applicable, at or with Bank for any and
all Obligations hereunder, whether or not any demand has been made on Applicants
hereunder. However, unless agreed otherwise, or stated herein neither Member nor
Correspondent agrees to furnish any security for this Agreement or the Credit
other than the aforementioned monies. Upon Member's or Correspondent's payment
to Bank of all Obligations hereunder, Bank thereupon automatically, and without
further action on the part of any party, assigns and transfers its rights
hereunder to Correspondent or Member as applicable, who shall be fully
subrogated thereto, and Applicants agree that any right, claim or cause of
action which any of them may have hereunder or under the Credit shall be made
only against Correspondent or Member, as applicable, and Applicants agree,
regardless of whether Bank was negligent or not, to indemnify and hold Bank
harmless from and against any claims, costs, expenses, suits or causes of action
by Applicants or any beneficiary or user of the Credit. Applicants hereby agree
that Correspondent or Member, as applicable, shall also (in addition to Bank)
have the same rights, remedies, security interests and other liens as are stated
herein, to the same effect as if additional paragraphs were fully written herein
containing the same terms but substituting "Correspondent" or "Member" for
"Bank" throughout. All references to secured party, beneficiary or other similar
term contained in any deed of trust, security agreement, financing statement or
other document or instrument executed contemporaneously herewith or previously
executed by any of the Applicants for the benefit of Member or Correspondent
shall be deemed to include Bank as well as Member or Correspondent. All such
security agreements, financing statements, deeds of trust and other documents
and instruments are amended to the extent necessary in order that the
Obligations of Applicants hereunder are secured thereby and by the collateral
described therein on a pari passu basis with, and in addition to, any other
obligations secured thereby.
This written loan agreement represents the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous, or subsequent
oral agreements of the parties.
There are no unwritten oral agreements between the parties.
APPLICANTS:
___________________________________ _________________________________
Printed Name Printed Name
By:________________________________ By:______________________________
Authorized Signature Authorized Signature
___________________________________ CORRESPONDENT/MEMBER BANK:
Printed Name
By:________________________________ _________________________________
Authorized Signature Printed Name
By:______________________________
Authorized Signature
BANK ACCEPTANCE: The Bank's Acceptance evidenced by the undersigned authorized
representative's signature is provided as its acknowledgement that this
agreement represents the final agreement by the parties which may not be
contradicted by evidence of prior contemporaneous, or subsequent oral agreements
between the parties.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By:______________________________________________
Page 4 of 4
EXHIBIT J
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Form of Assignment and Acceptance
---------------------------------
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated _____________, 19__
Reference is made to the Amended and Restated Credit Agreement dated as of
August 2, 1999 (as the same may be amended, restated or supplemented and in
effect from time to time, the "Credit Agreement"), among CELLSTAR CORPORATION, a
----------------
Delaware corporation (the "Borrower"), each of the banks or other lending
--------
institutions which is or may from time to time become a signatory thereto or any
successor or permitted assignee thereof named therein (each a "Bank" and,
----
collectively, the "Banks"), THE FIRST NATIONAL BANK OF CHICAGO, as syndication
-----
agent (the "Syndication Agent"), NATIONAL CITY BANK, as documentation agent (the
-----------------
"Documentation Agent"), CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national
-------------------
banking association, as administrative agent (in such capacity, the
"Administrative Agent"), and The Chase Manhattan Bank, as alternate currency
---------------------
agent (in such capacity, the "Alternate Currency Agent"). Capitalized terms
------------------------
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Credit Agreement.
__________________________________________________________ (the "Assignor")
--------
and _________________________________________ (the "Assignee") agree as follows:
--------
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a _____%
interest in and to all the Assignor's rights and obligations under the
Credit Agreement and the other Loan Documents as of the Effective Date
(as defined below) (including, without limitation, such percentage
interest in the Commitment of the Assignor on the Effective Date, such
percentage interest in the Advances owing to the Assignor outstanding
on the Effective Date, and such percentage interest in Assignor's
participation share of the Letter of Credit Liabilities outstanding on
the Effective Date, together with such percentage interest in all
unpaid interest and fees accrued from the Effective Date). This
Assignment and Acceptance is made by Assignor without recourse.
2. The Assignor (i) represents that as of the date hereof, its Commitment
is $_______________, the outstanding principal balance of its Advances
is $_______________, and the amount of Assignor's participation
interest in the Letter of Credit Liabilities is $_______________ (all
as unreduced by any assignments which have not yet become effective);
(ii) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in
or in connection with the Credit Agreement or any other
ASSIGNMENT AND ACCEPTANCE - Page 1
Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
Loan Document, other than that it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any Obligated Party or the performance or
observance by the Borrower or any other Obligated Party of any of
their obligations under the Agreement or any other Loan Document; and
(iv) attaches the Note held by Assignor and requests that the Agent
exchange such Notes for new Notes payable to the order of (A) Assignee
in an amount equal to the Commitment assumed by the Assignee pursuant
hereto and (B) the Assignor in an amount equal to the Commitment
retained by the Assignor under the Credit Agreement, respectively, as
specified above.
3. The Assignee (i) represents and warrants that it is legally authorized
to enter in this Assignment and Acceptance; (ii) confirms that it has
received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 9.1
thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (iii) agrees that it will,
independently and without reliance upon the Agent, the Assignor, or
any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement
and the other Loan Documents; (iv) confirms that it is eligible to be
an Assignee; (v) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto; [and] (vi)
agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement and the other
Loan Documents are required to be performed by it as a Bank; [and
(vii) attaches the forms prescribed by the Internal Revenue Service of
the United States certifying as to the Assignee's exemption from
United States withholding taxes with respect to all payments to be
made to the Assignee under the Loan Documents or such other documents
as are necessary to indicate that all such payments are subject to
such tax at a rate reduced by an applicable tax treaty]./1/
__________________
/1/ If the Assignee is organized under the laws of a jurisdiction outside the
United States.
ASSIGNMENT AND ACCEPTANCE - Page 2
4. The effective date for this Assignment and Acceptance shall be
______________, 19___ (the "Effective Date")./2/ Following the
--------------
execution of this Assignment and Acceptance, it will be delivered to
the Agent for acceptance and recording by the Agent.
5. Upon such acceptance and recording, from and after the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, shall have the
rights and obligations of a Bank thereunder and under the other Loan
Documents and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Credit Agreement and the other Loan
Documents.
6. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments in respect of the interest assigned
hereby (including payments of principal, interest, fees, and other
amounts) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective
Date by the Agent or with respect to the making of this assignment
directly between themselves.
7. The Assignee has executed and delivered a confidentiality agreement in
substantially the form of the confidentiality agreements between the
Borrower and the other Banks.
8. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
[NAME OF ASSIGNOR],
By:________________________________
Name:___________________________
Title:__________________________
_________________________
/2/ Such date shall be at least ten (10) Business Days after the execution of
this Assignment and Acceptance and delivery thereof to the Agent.
ASSIGNMENT AND ACCEPTANCE - Page 3
[NAME OF ASSIGNEE],
By:________________________________
Name:___________________________
Title:__________________________
ACCEPTED BY:
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
as Administrative Agent
By:________________________________
Name:___________________________
Title:__________________________
Date:___________________________
CONSENTED TO BY:
CELLSTAR CORPORATION/3/
By:________________________________
Name:___________________________
Title:__________________________
ASSIGNMENT AND ACCEPTANCE - Page 4
EXHIBIT K
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Contribution and Indemnification Agreement
------------------------------------------
CONTRIBUTION AND INDEMNIFICATION AGREEMENT
------------------------------------------
THIS CONTRIBUTION AND INDEMNIFICATION AGREEMENT (this "Agreement"), dated
---------
as of ___________, 199___, is entered into by and among CellStar Corporation, a
Delaware corporation (the "Borrower"), and the undersigned Guarantors (each a
--------
"Guarantor" and collectively, the "Guarantors," and together with Borrower each
--------- ----------
a "Company" and, collectively, the "Companies").
------- ---------
R E C I T A L S:
---------------
A. Borrower, certain banks or lending institutions from time to time party
thereto (each a "Bank" and, collectively, the "Banks"), The First National Bank
---- -----
of Chicago, as syndication agent (the "Syndication Agent"), National City Bank,
-----------------
the documentation agent (the "Documentation Agent"), and Chase Bank of Texas,
-------------------
National Association (formerly known as Texas Commerce Bank National
Association), as agent for the Banks (the "Agent"), have entered into that
-----
certain Amended and Restated Credit Agreement dated as of August 2, 1999 (as the
same has been and may be amended, supplemented or modified from time to time,
the "Credit Agreement"), providing for loans and extensions of credit to the
----------------
Borrower.
B. As of July 10, 1998, CellStar Telecom, Inc., a Delaware corporation
("CellStar Telecom"), Florida Properties, Inc., a Texas corporation ("Florida
---------------- -------
Properties"), and CellStar Global Satellite Service, Ltd., a Texas limited
----------
partnership ("CellStar Global" and together with CellStar Telecom and Florida
---------------
Properties, the "New Guarantors"), are executing and delivering a Guaranty (the
--------------
"New Guaranty"), pursuant to which the New Guarantors jointly and severally
------------
guarantee the full and prompt payment and performance of the Guaranteed
Indebtedness, as such term is defined in the New Guaranty.
C. As of October 15, 1997, the Guarantors other than the New Guarantors
(collectively, the "Existing Guarantors") executed and delivered a Guaranty (the
-------------------
"Existing Guaranty" and together with the New Guaranty, the "Guaranties"),
----------------- ----------
pursuant to which the Existing Guarantors jointly and severally guarantee the
full and prompt payment and performance of the Guaranteed Indebtedness.
D. Concurrently with the execution and delivery of the New Guaranty, the
Guarantors and the Borrower entered into a Contribution and Indemnification
Agreement dated as of July 10, 1998 (the "Existing Contribution Agreement").
-------------------------------
E. The Companies wish to enter into this Agreement to effect equitable
sharing of their risk in respect of the Guaranteed Indebtedness among all of the
Companies, including the New Guarantors, and to supersede and replace the
Existing Contribution Agreement.
CONTRIBUTION AND INDEMNIFICATION AGREEMENT -Page 1
A G R E E M E N T:
-----------------
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Capitalized terms used in this Agreement to the extent not otherwise
defined herein shall have the same meanings as in the Credit Agreement.
2. If any Guarantor makes a payment in respect of the Guaranteed
Indebtedness, it shall have the rights of contribution and reimbursement set
forth below against the other Companies and shall be indemnified as set forth
below; provided that no Guarantor shall enforce its rights to any payment by
--------
exercising its rights of contribution, reimbursement or indemnification unless
and until all the Guaranteed Indebtedness shall have been paid in full.
3. If any Guarantor makes a payment in respect of the Guaranteed
Indebtedness that is greater than its Pro Rata Percentage (hereinafter defined)
of the Guaranteed Indebtedness, calculated as of the date such payment is made,
the Guarantor making such payment shall have the right to receive from each of
the other Guarantors, and the other Guarantors jointly and severally agree to
pay to such Guarantor, when permitted by paragraph 2 hereof, an amount such that
-----------
the net payments made by the Guarantors in respect of the Guaranteed
Indebtedness shall be shared among the Guarantors pro rata in proportion to
their respective Pro Rata Percentages of the Guaranteed Indebtedness. The
Guarantors hereby jointly and severally indemnify each of the other Guarantors
and jointly and severally agree to hold each of them harmless from and against
any and all amounts which any such Guarantor shall ever be required to pay in
respect of the Guaranteed Indebtedness in excess of such Guarantor's respective
Pro Rata Percentage of the Guaranteed Indebtedness. Notwithstanding anything to
the contrary contained in this paragraph or in this Agreement, no liability or
obligation of any Guarantor that shall accrue pursuant to this Agreement shall
be paid nor shall it be deemed owed pursuant to this Agreement or any Loan
Documents unless and until all of the Guaranteed Indebtedness shall be paid in
full. As used herein, the term "Pro Rata Percentage" shall mean, for each
-------------------
Guarantor, the percentage derived by dividing (a) the amount by which the fair
saleable value of its assets on the Date of Determination (hereinafter defined)
exceeds its liabilities (without giving effect to its Guaranty) (such excess for
each Guarantor, its "Net Worth"), by (b) the Net Worth of all of the Guarantors.
---------
As used herein, the term "Date of Determination" shall mean (i) August 31, 1997
---------------------
for each of the Existing Guarantors, (ii) May 31, 1998 for each of Florida
Properties and CellStar Telecom, and (iii) July 10, 1998 for CellStar Global.
4. If any Guarantor makes any payment in respect of the Guaranteed
Indebtedness, the Guarantor making such payment shall have the right to receive
from the Borrower, and the Borrower agrees to pay to such Guarantor, when
permitted by paragraph 2 hereof, an amount equal to such payment. The Borrower
-----------
hereby indemnifies each of the Guarantors and agrees to hold each of them
harmless from and against any and all amounts which any such Guarantor shall
ever be required to pay in respect of the Guaranteed Indebtedness.
Notwithstanding anything to the contrary contained in this paragraph or in this
Agreement, no liability or obligation of the Borrower that shall accrue
CONTRIBUTION AND INDEMNIFICATION AGREEMENT - Page 2
pursuant to this Agreement shall be paid or shall be deemed owed pursuant to
this Agreement or any Loan Documents unless and until all of the Guaranteed
Indebtedness shall be paid in full.
5. Each Company represents and warrants to each other Company and to their
respective successors and assigns that:
(a) the execution, delivery and performance by each Company of this
Agreement are within such Company's corporate or partnership powers, have
been duly authorized by all necessary corporate or partnership action, as
the case may be, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
articles or certificate of incorporation or bylaws or other organizing
document of such party or of any agreement, judgment, injunction, order,
decree or other instrument binding upon such party or result in the
creation or imposition of any Lien on any asset of such Company;
(b) this Agreement constitutes a legal, valid and binding agreement of
each Company, enforceable against such Company in accordance with its
terms; and
(c) such Company has adequate capital to conduct its business as a
going concern, as presently conducted and as proposed to be conducted, will
be able to meet its obligations hereunder and in respect of its other
existing and future indebtedness and liabilities as and when the same shall
be due and payable, and is not insolvent (as that term is defined in 11
U.S.C. ' 101 or applicable law) and will not be rendered insolvent by its
obligations hereunder, and the foregoing representation is supported by
such Company's internal projections and forecasts.
6. No failure or delay by any Guarantor in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and non-exclusive of any rights or remedies
provided by law.
7. Any provision of this Agreement may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by the parties hereto
and consented to in writing by the Agent.
8. The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
9. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS.
CONTRIBUTION AND INDEMNIFICATION AGREEMENT - Page 3
10. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when a counterpart hereof shall have been signed by all the parties hereto.
11. This Agreement supercedes and replaces the Existing Contribution
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER:
--------
CELLSTAR CORPORATION
By:_________________________________
Name:____________________________
Title:___________________________
GUARANTORS:
----------
NATIONAL AUTO CENTER, INC.
By:_________________________________
Name:____________________________
Title:___________________________
CELLSTAR, LTD.
By: National Auto Center, Inc.,
its general partner
By:_________________________________
Name:____________________________
Title:___________________________
CONTRIBUTION AND INDEMNIFICATION AGREEMENT - Page 4
CELLSTAR FULFILLMENT, LTD.
By: CellStar Fulfillment, Inc.,
its general partner
By:_________________________________
Name:____________________________
Title:___________________________
CELLSTAR WEST, INC.
By:_________________________________
Name:____________________________
Title:___________________________
CELLSTAR AIR SERVICES, INC.
By:_________________________________
Name:____________________________
Title:___________________________
A & S AIR SERVICE, INC.
By:_________________________________
Name:____________________________
Title:___________________________
CELLSTAR INTERNATIONAL
CORPORATION/SA
By:_________________________________
Name:____________________________
Title:___________________________
CONTRIBUTION AND INDEMNIFICATION AGREEMENT - Page 5
AUDIOMEX EXPORT CORP.
By:_________________________________
Name:____________________________
Title:___________________________
CELLSTAR INTERNATIONAL
CORPORATION/ASIA
By:_________________________________
Name:____________________________
Title:___________________________
CELLSTAR FULFILLMENT, INC.
By:_________________________________
Name:____________________________
Title:___________________________
NAC HOLDINGS, INC.
By:_________________________________
Name:____________________________
Title:___________________________
ACC-CELLSTAR, INC.
By:_________________________________
Name:____________________________
Title:___________________________
CONTRIBUTION AND INDEMNIFICATION AGREEMENT - Page 6
CELLSTAR FINANCO, INC.
By:_________________________________
Name:____________________________
Title:___________________________
CELLSTAR TELECOM, INC.
By:_________________________________
Name:____________________________
Title:___________________________
FLORIDA PROPERTIES, INC.
By:_________________________________
Name:____________________________
Title:___________________________
CELLSTAR GLOBAL SATELLITE SERVICE, LTD.
By: National Auto Center, Inc.,
its general partner
By:_____________________________
Name:________________________
Title:_______________________
CONTRIBUTION AND INDEMNIFICATION AGREEMENT - Page 7
EXHIBIT L
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Account Information
-------------------
Name:______________________________________________________________________
City:______________________________________________________________________
Country:___________________________________________________________________
Sort Code:_________________________________________________________________
For Credit To:_____________________________________________________________
Attention:_________________________________________________________________
Reference:_________________________________________________________________
Account Number:____________________________________________________________
Swift Address:_____________________________________________________________
EXHIBIT M
TO
AMENDED AND RESTATED CREDIT AGREEMENT
Consent, Ratification and Confirmation
--------------------------------------
CONSENT, RATIFICATION AND CONFIRMATION
--------------------------------------
This CONSENT, RATIFICATION AND CONFIRMATION (this "Ratification") is made
------------
as of the 2nd day of August, 1999 by each of the undersigned (collectively, the
"Companies"; individually, a "Company"), for the benefit of each of the banks or
--------- -------
other lending institutions which is or may from time to time become a signatory
to the Credit Agreement (as defined herein) or any successor or permitted
assignee thereof (each a "Bank" and, collectively, the "Banks"), THE FIRST
---- -----
NATIONAL BANK OF CHICAGO, as syndication agent (the "Syndication Agent"),
-----------------
NATIONAL CITY BANK, as documentation agent (the "Documentation Agent"), CHASE
-------------------
BANK OF TEXAS, NATIONAL ASSOCIATION (formerly known as Texas Commerce Bank
National Association), as administrative agent for the Banks, as issuer of
Letters of Credit (as defined in the Credit Agreement) and as the swing line
lender (in such capacity, together with its successors in such capacity, the
"Administrative Agent"), and The Chase Manhattan Bank, as alternate currency
--------------------
agent (in such capacity, together with its successors in such capacity, the
"Alternate Currency Agent").
------------------------
R E C I T A L S:
---------------
WHEREAS, CellStar Corporation, a Delaware corporation (the "Borrower"), the
--------
Banks, The First National Bank of Chicago and National City Bank, as co-agents,
and Administrative Agent previously entered into that certain Credit Agreement
dated as of October 15, 1997 (as the same has been amended, supplemented or
modified from time to time, the "Credit Agreement");
----------------
WHEREAS, in connection with the Credit Agreement, each Company executed and
delivered to the Administrative Agent and the Banks certain agreements,
documents and instruments more specifically described on Schedule A attached
----------
hereto (the "Existing Loan Documents");
-----------------------
WHEREAS, the Borrower has requested that the Syndication Agent, the
Documentation Agent, the Banks, the Administrative Agent and the Alternate
Currency Agent enter into that certain Amended and Restated Credit Agreement
dated as of August 2, 1999 (the "New Credit Agreement"), in amendment and
--------------------
restatement of the Credit Agreement; and
WHEREAS, the Banks, the Syndication Agent, the Documentation Agent, the
Administrative Agent and the Alternate Currency Agent have conditioned their
acceptance of their respective obligations under the New Credit Agreement and
related documents on the execution of this Ratification by each Company;
NOW, THEREFORE, for and in consideration of the premises herein contained,
and for other good and valuable consideration, the receipt and sufficiently of
which are hereby acknowledged and confessed, each Company agrees as follows:
-1-
A G R E E M E N T S:
-------------------
1. Capitalized times used but not otherwise defined herein shall have the
meanings assigned to such terms in the New Credit Agreement.
2. Each Company (a) consents and agrees to the terms of the New Credit
Agreement, (b) affirms that nothing contained in the New Credit Agreement shall
affect or impair in any respect whatsoever its obligations under the Existing
Loan Documents, and (c) agrees that the Existing Loan Documents remain in full
force and effect and shall continue to be the legal, valid and binding
obligations of the respective Companies, enforceable against the respective
Companies in accordance with their respective terms.
3. Each Company hereby acknowledges and agrees, and the Existing Loan
Documents are hereby amended as follows:
(a) Each reference in the Existing Loan Documents to the Credit
Agreement shall mean the New Credit Agreement.
(b) Each reference in the Existing Loan Documents to the
"Obligations," as defined in the Credit Agreement, shall mean the
"Obligations" as defined in the New Credit Agreement.
(c) Each reference in the Existing Loan Documents to the "Notes"
shall mean the Notes executed pursuant to the New Credit Agreement and all
renewals, extensions and modifications thereof.
(d) Each reference in the Existing Loan Documents (i) to "The First
National Bank of Chicago and National City Bank, as co-agents" shall mean
"The First National Bank of Chicago, as Syndication Agent, National City
Bank, as Documentation Agent, and The Chase Manhattan Bank, as Alternate
Currency Agent," (ii) to "the Co-Agents" shall mean "the Syndication Agent,
the Documentation Agent and the Alternate Currency Agent," and (iii) to
"any Co-Agent" shall mean "the Syndication Agent, the Documentation Agent,
or the Alternate Currency Agent."
(e) Each reference in the Existing Loan Documents to "Texas Commerce
Bank National Association" shall mean "Chase Bank of Texas, National
Association."
(f) Each Company acknowledges and agrees that the liens, security
interests and assignments created and evidenced by the Existing Loan
Documents, as the same have been or may be amended, supplemented, modified
or restated, are legal, valid, binding and enforceable liens, security
interests and assignments of the respective dignity and priority recited
therein and all such liens, security interests and assignments are hereby
ratified and shall continue as security for the obligations described
therein and secured thereby, including
-2-
without limitation the indebtedness evidenced by the Notes executed
pursuant to the New Credit Agreement.
4. Each Company hereby acknowledges, agrees, and represents that it has
no and there are no claims or offsets against, or defenses or counterclaims to,
the terms and provisions of any Existing Loan Documents, the obligations secured
thereby or the obligations of the Companies thereunder, and to the extent any
such claims, offsets, defenses or counterclaims exist, each Company hereby
waives, and hereby releases the Administrative Agent, the Syndication Agent, the
Documentation Agent, the Alternate Currency Agent and each of the Banks from,
any and all claims, offsets, defenses and counterclaims, whether known or
unknown, such waiver and release being with full knowledge and understanding of
such Company of the circumstances and effects of such waiver and release and
after having consulted legal counsel with respect thereto.
5. The representations and warranties of each Company contained in the
Existing Loan Documents are true and correct representations of such Company on
and as of the date hereof as though made on and as the date hereof.
6. Each Company represents to the Administrative Agent, the Syndication
Agent, the Documentation Agent, the Alternate Currency Agent and the Banks that
such Company is not in default under the terms of any Existing Loan Documents or
any other agreement and that no event has occurred which, with the passage of
time, giving of notice, or both, would constitute a default under the terms of
any Existing Loan Documents. Each Company further represents that it is in
compliance in all material respects with all covenants and agreements contained
in the Existing Loan Documents.
7. THIS RATIFICATION SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS.
8. This Ratification may be executed and delivered in any number of
counterparts, and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute one and the same
instrument.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
-3-
EXECUTED as of the 2nd day of August, 1999.
COMPANIES:
---------
CELLSTAR CORPORATION
By: ______________________________
Name:_________________________
Title:________________________
NATIONAL AUTO CENTER, INC.
By: ______________________________
Name:_________________________
Title:________________________
CELLSTAR, LTD.
By: National Auto Center, Inc.,
its general partner
By: ______________________________
Name:_________________________
Title:________________________
CELLSTAR FULFILLMENT, LTD.
By: CellStar Fulfillment, Inc.,
its general partner
By: ______________________________
Name:_________________________
Title:________________________
-0-
XXXXXXXX XXXX, INC.
By: ______________________________
Name:_________________________
Title:________________________
CELLSTAR AIR SERVICES, INC.
By: ______________________________
Name:_________________________
Title:________________________
A & S AIR SERVICE, INC.
By: ______________________________
Name:_________________________
Title:________________________
CELLSTAR INTERNATIONAL
CORPORATION/SA
By: ______________________________
Name:_________________________
Title:________________________
AUDIOMEX EXPORT CORP.
By: ______________________________
Name:_________________________
Title:________________________
-5-
CELLSTAR INTERNATIONAL
CORPORATION/ASIA
By: ______________________________
Name:_________________________
Title:________________________
CELLSTAR FULFILLMENT, INC.
By: ______________________________
Name:_________________________
Title:________________________
NAC HOLDINGS, INC.
By: ______________________________
Name:_________________________
Title:________________________
ACC-CELLSTAR, INC.
By: ______________________________
Name:_________________________
Title:________________________
CELLSTAR FINANCO, INC.
By: ______________________________
Name:_________________________
Title:________________________
-6-
CELLSTAR TELECOM, INC.
By: ______________________________
Name:_________________________
Title:________________________
FLORIDA PROPERTIES, INC.
By: ______________________________
Name:_________________________
Title:________________________
CELLSTAR GLOBAL SATELLITE SERVICE, LTD.
By: National Auto Center, Inc.,
its general partner
By: ______________________________
Name:_________________________
Title:________________________
-7-
SCHEDULE A
Existing Loan Documents
-----------------------
1. Guaranty dated as of October 15, 1997, executed by National Auto Center,
Inc., CellStar, Ltd., CellStar Fulfillment, Ltd., CellStar West, Inc., ACC-
CellStar, Inc., CellStar Financo, Inc., CellStar Fulfillment, Inc., NAC
Holdings, Inc., CellStar International Corporation/Asia, Audiomex Export
Corporation, CellStar International Corporation/SA, CellStar Air Services,
Inc., and A & S Air Service, Inc. (collectively, the "Original
--------
Guarantors").
----------
2. Borrower Security Agreement dated as of October 15, 1997, executed by the
Borrower.
3. Guarantor Security Agreement dated as of October 15, 1997, executed by the
Original Guarantors.
4. Pledge Agreement dated as of October 15, 1997, executed by the Borrower.
5. Pledge Agreement dated as of October 15, 1997, executed by National Auto
Center, Inc.
6. Pledge Agreement dated as of October 15, 1997, executed by CellStar Air
Services, Inc.
7. Pledge Agreement dated as of October 15, 1997, executed by CellStar
International Corporation/SA.
8. Pledge Agreement dated as of October 15, 1997, executed by CellStar
Fulfillment, Inc.
9. Pledge Agreement dated as of October 15, 1997, executed by NAC Holdings,
Inc.
10. Pledge Agreement dated as of October 15, 1997, executed by Audiomex Export
Corp.
11. Pledge Agreement dated as of October 15, 1997, executed by CellStar
International Corporation/Asia.
12. Security Interest Assignment of Patents dated as of October 15, 1997,
executed by CellStar, Ltd., recorded on November 26, 1997 on Reel 8815,
Frame 0446 with the United States Patent and Trademark Office.
13. Security Interest Assignment of Copyrights dated as of October 15, 1997,
executed by CellStar, Ltd.
14. Security Interest Assignment of Trademarks dated as of October 15, 1997,
executed by CellStar, Ltd., recorded on November 26, 1997 on Reel 1659,
Frame 0200 with the United States Patent and Trademark Office.
SCHEDULE A - Page 1
15. Guaranty dated as of July 10, 1998 executed by CellStar Telecom, Inc.,
Florida Properties, Inc. and CellStar Global Satellite Service, Ltd.
(collectively, the "New Guarantors").
--------------
16. Contribution and Indemnification Agreement dated as of July 10, 1998 by and
among the Borrower, the Original Guarantors and the New Guarantors.
17. Guarantor Security Agreement dated as of July 10, 1998, executed by the New
Guarantors.
18. Pledge Agreement dated as of July 10, 1998, executed by the Borrower.
19. Pledge Agreement dated as of July 10, 1998, executed by CellStar Telecom,
Inc.
20. Pledge Agreement dated as of July 10, 1998, executed by NAC Holdings, Inc.
21. Pledge Agreement dated as of July 10, 1998, executed by National Auto
Center, Inc.
SCHEDULE A - Page 2
SCHEDULE 8.5
LITIGATION
During the period from May 1999 through June 1999, five purported class
action lawsuits were filed in the United States District Court for the Southern
District of Florida, styled as follows: (1) Xxxxx Xxxxxxxxx v. CellStar
Corporation, Xxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxx, and Xxxx X. Xxxxxxx; (2) Xxxx
Xxxx v. CellStar Corporation, Xxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxx and Xxxx X.
Xxxxxxx; (3) Xxxxxx Xxxxxx v. CellStar Corporation, Xxxx X. Xxxxxxxxx, Xxxxxxx
X. Xxxxx and Xxxx X. Xxxxxxx; (4) Xxxxxxxx Xxxxx v. CellStar Corporation, Xxxx
X. Xxxxxxxxx, Xxxxxxx X. Xxxxx and Xxxx X. Xxxxxxx; (5) Xxxx XxXxxxx v. CellStar
Corporation, Xxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxx and Xxxx X. Xxxxxxx. Each of
the above lawsuits seeks certification as a class action to represent those
persons who purchased the publicly traded securities of the Company during the
period from March 19, 1998 to September 21, 1998. Each of these lawsuits allege
that the Company issued a series of materially false and misleading statements
concerning the Company's results of operations and the Company's investment in
Xxxx Telecom, Inc. ("Xxxx"), resulting in violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, as amended, and Rule 10(b)(5)
promulgated thereunder. The Company believes that it has complied with all
reporting requirements with respect to its results of operations and investment
in Xxxx and that it has meritorious defenses to these allegations and intends to
vigorously defend these actions.
On August 3, 1998, the Company announced that the Securities and Exchange
Commission is conducting an investigation of the Company relating to its
compliance with federal securities law. The Company believes that it has fully
complied with all securities laws and regulations and is cooperating with the
Commission staff in their investigation.
The Company is also a party to various other claims, legal actions and
complaints arising in the ordinary course of business. Management believes that
the disposition of these other matters will not have a material adverse effect
on the consolidated financial condition or results of operations of the Company.
SCHEDULE 8.9
------------
EXISTING DEBT
-------------
1. US$150.0 Million Convertible Subordinated Notes due October 15, 2002,
issued by CellStar Corporation pursuant to Indenture dated October 14,
1997.
2. Guarantee by CellStar Corporation of obligations of CellStar Amtel Sdn Bhd
(the Malaysian affiliate) under its credit facility with DCB Bank Berhad
Malaysia, which guarantee is limited to a maximum of RM13.0 Million, or
US$3.4 Million as of June 30, 1999.
3. Guarantee by CellStar do Brasil Ltda. of obligations under its credit
facility with multiple Brazilian banks of BRL5.9 Million, or US$3.3 Million
as of June 30, 1999.
4. Guarantee by CellStar Corporation of obligations of CellStar Internacional
Telefonia Celular Ltda. under its credit facility via a Letter of Credit to
Banco Cidade S.A. of US$500K under which only $366K was borrowed by
CellStar Internacional as of June 30, 1999.
5. Guarantee by CellStar Corporation of obligations of CellStar do Brasil
Ltda. under its credit facility via a Letter of Credit to Banco Credito
Nacional S.A. of US$7.15 Million as of June 30, 1999.
6. Guarantee by CellStar Corporation of obligations of CellStar do Brasil
Ltda. under its credit facility via a Letter of Credit to Banco Cidade S.A.
of US$1.5 Million as of June 30, 1999.
7. Guarantee by CellStar Corporation of purchases made from O.N. Wirefree
International via a Standby Letter of Credit of $450K.
SCHEDULE 8.14
Subsidiaries and Foreign Affiliates
[COMPANY CHART APPEARS HERE]
/1/ CellStar Finance, Inc. owns remaining 50%.
/2/ CellStar (Asia) Corporation Limited owns remaining 20%.
/3/ National Auto Center, Inc. is 1% General Partner and NAC Holdings, Inc. is
99% limited partner.
/4/ CellStar Fulfillment, Inc. is 1% General Partner and NAC Holdings, Inc. is
99% limited partner.
SCHEDULE 8.19
-------------
Environmental Matters
NONE.
SCHEDULE 8.20
Patents, Trademarks and Copyrights
CELLSTAR, LTD. FOREIGN TRADEMARKS
----------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
----------------------------------------------------------------------------------------------------------------------------
Algeria CELLSTAR (class 9, 35, 38) 981558
11/30/98
----------------------------------------------------------------------------------------------------------------------------
Angola CELLSTAR (class 9) 6074
9/3/98
----------------------------------------------------------------------------------------------------------------------------
Angola CELLSTAR (class 35) 6077 9/3/98
----------------------------------------------------------------------------------------------------------------------------
Angola CELLSTAR (class 38) 6072 9/3/98
----------------------------------------------------------------------------------------------------------------------------
Argentina CELLSTAR (stylized) (class 9) 1,871,769 1.510.201 03/31/2004
02/12/93 03/31/94
----------------------------------------------------------------------------------------------------------------------------
Argentina CELLSTAR (class 9) 1,985,259
06/28/95
----------------------------------------------------------------------------------------------------------------------------
Argentina CELLSTAR (class 35) 2,123,261
12/30/97
----------------------------------------------------------------------------------------------------------------------------
Argentina CELLSTAR (class 37) 2,123,262
12/30/97
----------------------------------------------------------------------------------------------------------------------------
Argentina CELLSTAR (class 38) 1,985,260 1,598,164 04/30/2006
06/28/95 04/30/96
----------------------------------------------------------------------------------------------------------------------------
Argentina CELLSTAR (class 42) 1,985,261
06/28/95
----------------------------------------------------------------------------------------------------------------------------
ARIPO CELLSTAR (class 9) AP/M/98-
00120-9
07/14/98
----------------------------------------------------------------------------------------------------------------------------
ARIPO CELLSTAR (class 35) AP/M/98-
00120-35
07/14/98
----------------------------------------------------------------------------------------------------------------------------
ARIPO CELLSTAR (class 38) AP/M/00-00000-00
07/14/98
----------------------------------------------------------------------------------------------------------------------------
Australia CELLSTAR (class 9) 74/651,649 A651,649 1/27/2005
01/27/95
----------------------------------------------------------------------------------------------------------------------------
Australia CELLSTAR (class 38) 651,650 A651,650 01/27/2005
01/27/95 1/27/95
----------------------------------------------------------------------------------------------------------------------------
Australia CELLSTAR (class 42) 651,652 A651,652
01/27/95 5/22/96 01/27/2005
----------------------------------------------------------------------------------------------------------------------------
Australia CELLSTAR (classes 35, 36, 37, 39 and 42) M751606 A751,606 12/23/2007
12/23/97 9/30/98
----------------------------------------------------------------------------------------------------------------------------
Bangledesh/1/ CELLSTAR (class 9) 42,983
02/21/95
----------------------------------------------------------------------------------------------------------------------------
Belarus CELLSTAR (classes 9, 35, 36, 37, 38, 42) N19980269
2/23/98
----------------------------------------------------------------------------------------------------------------------------
Bolivia CELLSTAR (class 9) 1236 70278-C 01/25/2009
02/26/93 01/25/99
----------------------------------------------------------------------------------------------------------------------------
Bolivia CELLSTAR (class 9) 57977-C 05/18/2003
02/09/95
----------------------------------------------------------------------------------------------------------------------------
Bolivia CELLSTAR (class 9) 1003 01/22/98
----------------------------------------------------------------------------------------------------------------------------
Bolivia CELLSTAR (class 35) 1002 01/22/98
----------------------------------------------------------------------------------------------------------------------------
Bolivia CELLSTAR (stylized) (class 35) 998 01/22/98
----------------------------------------------------------------------------------------------------------------------------
Bolivia CELLSTAR (class 38) 1001 01/22/98
----------------------------------------------------------------------------------------------------------------------------
Bolivia CELLSTAR (stylized) (class 38) 999 01/22/98
----------------------------------------------------------------------------------------------------------------------------
Brazil CELLSTAR (class 37) 817,136,878 817,136,878 06/05/2005
03/02/93 06/06/95
----------------------------------------------------------------------------------------------------------------------------
CELLSTAR, LTD. FOREIGN TRADEMARKS
----------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
----------------------------------------------------------------------------------------------------------------------
Brazil CELLSTAR (stylized) (class 9) 817,322,698 817,322,698 01/23/2005
06/23/93 01/24/95
----------------------------------------------------------------------------------------------------------------------
Brazil CELLSTAR (class 9) 817,136,860
03/02/93
----------------------------------------------------------------------------------------------------------------------
Brazil CELLSTAR (class 40) 820,521,523
1/23/98
----------------------------------------------------------------------------------------------------------------------
Brazil CELLSTAR (class 38) 820,521,531
1/23/98
----------------------------------------------------------------------------------------------------------------------
Brazil CELLSTAR (class 37) 820.521.540
01/23/98
----------------------------------------------------------------------------------------------------------------------
Brunei CELLSTAR (class 9) 24615 20230 02/22/2002
02/22/95 12/06/95
----------------------------------------------------------------------------------------------------------------------
Bulgaria CELLSTAR (stylized) (class 9) 41,484 34,563 03/04/08
3/10/98 03/04/98
----------------------------------------------------------------------------------------------------------------------
Bulgaria CELLSTAR (classes 35-38, 42) 41,485 7308 03/10/08
3/10/98 03/10/99
----------------------------------------------------------------------------------------------------------------------
Burundi CELLSTAR filed
----------------------------------------------------------------------------------------------------------------------
Cambodia CELLSTAR (class 9) 4038 4036 01/01/2004
01/01/94 01/12/94 *01/12/1999 -
Use *01/12/2000 -
Affidavit of Use
----------------------------------------------------------------------------------------------------------------------
Cambodia CELLSTAR (class 35) 10757 10942 06/02/2008
06/02/98 09/30/98
----------------------------------------------------------------------------------------------------------------------
Cambodia CELLSTAR (class 37) 10759 10943 06/02/2008
06/02/98 09/30/98
----------------------------------------------------------------------------------------------------------------------
Cambodia CELLSTAR (class 38) 10760 10944 06/02/2008
06/02/98 09/30/98
----------------------------------------------------------------------------------------------------------------------
Cambodia CELLSTAR (class 39) 10761 10945 06/02/2008
06/02/98 09/30/98
----------------------------------------------------------------------------------------------------------------------
Cambodia CELLSTAR (class 42) 10075 10073 11/11/2007
11/11/97 11/25/97
----------------------------------------------------------------------------------------------------------------------
Canada CELLSTAR (class 9) 721,282 432,754 09/02/2009
01/26/93 09/02/94
----------------------------------------------------------------------------------------------------------------------
Canada CELLSTAR (class 35) 867,175 432,754 09/02/2009
01/23/98 09/02/94
----------------------------------------------------------------------------------------------------------------------
Chile/3/ CELLSTAR (stylized) (class 9) 241.663 415,964 11/08/2003
05/26/93 11/08/93
----------------------------------------------------------------------------------------------------------------------
Chile CELLSTAR (class 9) 420,490 528,255
11/24/98 11/24/98
----------------------------------------------------------------------------------------------------------------------
Chile CELLSTAR (class 35) 424,838 532,103 1/13/09
8/21/98 1/13/99
----------------------------------------------------------------------------------------------------------------------
Chile CELLSTAR (stylized) (class 35) 424,839 532,104 1/13/09
8/21/98 1/13/99
----------------------------------------------------------------------------------------------------------------------
Chile CELLSTAR (class 38) 420,489 528,256
11/24/98 11/24/98
----------------------------------------------------------------------------------------------------------------------
Chile CELLSTAR (stylized) (class 38) 420,488 528,257
11/24/98 11/24/98
----------------------------------------------------------------------------------------------------------------------
Chile CELLSTAR (class 39) 424,837 532,101 1/13/09
8/21/98 1/13/99
----------------------------------------------------------------------------------------------------------------------
CELLSTAR, LTD. FOREIGN TRADEMARKS
--------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Reg. Date *Other Date
--------------------------------------------------------------------------------------------------------------------------
Chile CELLSTAR (class 39) stylized 424,836 532,102 1/13/09
8/21/98 1/13/99
--------------------------------------------------------------------------------------------------------------------------
China CELLSTAR (plain) (class 9) 93015835/ 694522/ 06/20/2004
03/11/93 06/21/94
--------------------------------------------------------------------------------------------------------------------------
China CELLSTAR (stylized) (class 9) 93015836/ 694523/ 06/20/2004
03/11/93 06/21/94
--------------------------------------------------------------------------------------------------------------------------
China CELLSTAR (transliteration) (class 9) 0000000000
1/4/98
--------------------------------------------------------------------------------------------------------------------------
China CELLSTAR (transliteration) (class 35) 9800007093 1,264,971 4/13/2009
1/22/98 4/14/99
--------------------------------------------------------------------------------------------------------------------------
China CELLSTAR (transliteration) (class 37) 9800001024 1,264,821 4/13/2009
1/4/98 4/14/99
--------------------------------------------------------------------------------------------------------------------------
China CELLSTAR (transliteration) (class 38) 9800001025 1,264,938 4/13/2009
1/4/98
--------------------------------------------------------------------------------------------------------------------------
Colombia/2/ CELLSTAR (class 9) 93/388,651
05/27/93
--------------------------------------------------------------------------------------------------------------------------
Colombia/3/ CELLSTAR (class 9) 93/403,362
08/20/93
--------------------------------------------------------------------------------------------------------------------------
Colombia CELLSTAR (class 38) 97,056,020 207,998 04/29/2008
09/25/97 04/30/98
--------------------------------------------------------------------------------------------------------------------------
Colombia CELLSTAR (class 35) 98,001,693 211,163 07/30/2008
01/16/98 07/31/98
--------------------------------------------------------------------------------------------------------------------------
Colombia CELLSTAR (tradename) 97,056,692 11,646 indefinite
09/29/97 12/26/97
--------------------------------------------------------------------------------------------------------------------------
Colombia CELLSTAR (class 42) 97,056,022 208,292 05/13/2008
09/25/97 05/14/98
--------------------------------------------------------------------------------------------------------------------------
Costa Rica CELLSTAR (class 9) 95202 03/13/2005
03/13/96
--------------------------------------------------------------------------------------------------------------------------
Costa Rica CELLSTAR (class 35) 96482 08/26/2005
08/26/96
--------------------------------------------------------------------------------------------------------------------------
Costa Rica CELLSTAR (class 38) 96481 08/26/2005
08/26/96
--------------------------------------------------------------------------------------------------------------------------
Costa Rica CELLSTAR (class 42) 95203 03/13/2005
03/13/96
--------------------------------------------------------------------------------------------------------------------------
Djibouti CELLSTAR (classes 9,35,38) No filing
receipts
are issued
--------------------------------------------------------------------------------------------------------------------------
Ecuador CELLSTAR DNPI-2197-MICIP 08/01/2004
08/01/94
--------------------------------------------------------------------------------------------------------------------------
Ecuador CELLSTAR (class 9) 92772
12/14/98
--------------------------------------------------------------------------------------------------------------------------
Ecuador CELLSTAR (class 35) 92768
12/14/98
--------------------------------------------------------------------------------------------------------------------------
Ecuador CELLSTAR (class 37) 92769
12/14/98
--------------------------------------------------------------------------------------------------------------------------
Ecuador CELLSTAR (class 38) 92770
12/14/98
--------------------------------------------------------------------------------------------------------------------------
Ecuador CELLSTAR (class 42) 92771
12/14/98
--------------------------------------------------------------------------------------------------------------------------
3
CELLSTAR, LTD. FOREIGN TRADEMARKS
------------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
------------------------------------------------------------------------------------------------------------------------------
Estonia CELLSTAR 02307
09/22/98
------------------------------------------------------------------------------------------------------------------------------
European Union CELLSTAR (class 9,35, 36, 38,42) 47233 47233 04/01/2006
04/01/96 03/23/99
------------------------------------------------------------------------------------------------------------------------------
France CELLSTAR (classes 9 and 38) 95/560,740 95/560,740 03/01/2005
03/01/95 03/01/2005
------------------------------------------------------------------------------------------------------------------------------
Gambia CELLSTAR (class 9) 000,230
06/16/98
------------------------------------------------------------------------------------------------------------------------------
Germany CELLSTAR (class 9 and 38) 395,078,598 395078598 02/28/2005
02/21/95 02/16/96
------------------------------------------------------------------------------------------------------------------------------
Great Britain CELLSTAR (class 9 and 38) 2,011,720 2,011,720 02/21/2005
02/21/95 02/21/95
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (class 9) 93/12897 9357/1995 11/29/00
11/30/93 11/10/95
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (class 35) 1384/98
02/06/98
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (class 35) 2046/99
02/22/99
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (class 36) 1385/98
02/06/98
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (class 37) 1386/98
02/06/98
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (class 39) 1387/98
02/06/98
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (class 42) 9712977 13156/98 09/09/04
09/10/97 09/10/97
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (class 42) 2047/99
02/22/99
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (trans-literation) (class 9) 1200/98
02/04/98
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (transliteration) (class 35) 1201/98
02/04/98
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (transliteration) (class 36) 1202/98
02/04/98
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (transliteration) (class 37) 1203/98
02/04/98
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (transliteration) (class 38) 1204/98
02/04/98
------------------------------------------------------------------------------------------------------------------------------
Hong Kong CELLSTAR (transliteration) (class 39) 1205/98
02/04/98
------------------------------------------------------------------------------------------------------------------------------
Hungary CELLSTAR (stylized) (classes 9, 35-39, 42) M9801193
03/31/98
------------------------------------------------------------------------------------------------------------------------------
India CELLSTAR (class 9) 613,904
12/14/93
------------------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (class 9) H4.HC.01. 01-14643 342,614 02/15/2004
08/15/94 08/31/95
------------------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (class 37) 9701529
9/18/97
------------------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (class 38) 9701528
9/18/97
------------------------------------------------------------------------------------------------------------------------------
4
CELLSTAR, LTD. FOREIGN TRADEMARKS
-------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
-------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (class 42) 9720891
9/25/97
-------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (stylized) (class 9) D98-18244
10/26/98
-------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (stylized) (class 35) D98-18243
10/26/98
-------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (stylized) (class 36) D98-18242
10/26/98
-------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (stylized) (class 37) D98-18239
10/26/98
-------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (stylized) (class 38) D98-18240
10/26/98
-------------------------------------------------------------------------------------------------------------------
Indonesia CELLSTAR (stylized) (class 42) D98-18241
10/26/98
-------------------------------------------------------------------------------------------------------------------
Ireland CELLSTAR (class 9) 6182/95 167,790 09/06/2002
09/07/95 08/08/96
-------------------------------------------------------------------------------------------------------------------
Israel CELLSTAR (class 9) 96247 96247 12/25/2001
12/25/94 08/05/96
-------------------------------------------------------------------------------------------------------------------
Israel CELLSTAR (class 38) 96248 96248 12/25/2001
12/25/94 08/05/96
-------------------------------------------------------------------------------------------------------------------
Israel CELLSTAR (class 42). 96249 96249 12/25/2001
12/25/94 08/05/96
-------------------------------------------------------------------------------------------------------------------
Laos CELLSTAR (and design) 2686 2879 12/29/2003
12/29/93 12/05/94
-------------------------------------------------------------------------------------------------------------------
Laos CELLSTAR 6494 6437 05/29/2008
5/29/98 6/26/98
-------------------------------------------------------------------------------------------------------------------
Laos CELLSTAR 5969 5924 09/30/2007
9/30/97 10/10/97
-------------------------------------------------------------------------------------------------------------------
Latvia CELLSTAR (classes 9, 35-38, 42) M-98-2889
12/10/98
-------------------------------------------------------------------------------------------------------------------
Liberia CELLSTAR (class 9) 98000879
11/26/98
-------------------------------------------------------------------------------------------------------------------
Liberia CELLSTAR (class 38) 98000882
11/26/98
-------------------------------------------------------------------------------------------------------------------
Libya CELLSTAR (class 9) 9514
06/08/98
-------------------------------------------------------------------------------------------------------------------
Libya CELLSTAR (class 35) 9515
06/08/98
-------------------------------------------------------------------------------------------------------------------
Libya CELLSTAR (class 38) 9516
06/08/98
-------------------------------------------------------------------------------------------------------------------
Lithuania CELLSTAR (classes 9, 35-38, 42) 98-3941
12/16/98
-------------------------------------------------------------------------------------------------------------------
Madagascar CELLSTAR (classes 9, 35 and 38) 980372
11/12/98
-------------------------------------------------------------------------------------------------------------------
Malaysia CELLSTAR (class 9) 94/06847
08/30/94
-------------------------------------------------------------------------------------------------------------------
Malaysia CELLSTAR (class 37) 97-18615
01/03/98
-------------------------------------------------------------------------------------------------------------------
5
CELLSTAR, LTD. FOREIGN TRADEMARKS
-------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
-------------------------------------------------------------------------------------------------------------------------
Malaysia CELLSTAR (class 38) 97-19565
12/01/97
-------------------------------------------------------------------------------------------------------------------------
Malaysia CELLSTAR (class 42) 97-19562
12/01/97
-------------------------------------------------------------------------------------------------------------------------
Malaysia CELLSTAR (transliteration) (Class 9) 98-00064
01/03/98
-------------------------------------------------------------------------------------------------------------------------
Malaysia CELLSTAR (transliteration) (class 38) 98-00065
01/03/98
-------------------------------------------------------------------------------------------------------------------------
Mauritius CELLSTAR (class 9) No ser. no.
05/29/98
-------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELL STAR (and design) 160,775 440,077
02/15/93 08/19/93
-------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELL STAR (and design) 165,557 474,925
04/16/93 09/27/94
-------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELL STAR (and design) 167,738 446,978
05/14/93 11/23/93
-------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELL STAR (and design) 167,739 446,979
05/14/93 11/23/93
-------------------------------------------------------------------------------------------------------------------------
Mexico/6/ CELLSTAR (class 9) 169,936 468,271 06/09/2003
06/09/93 08/01/94
-------------------------------------------------------------------------------------------------------------------------
Morocco CELLSTAR (classes 9, 35 and 38) 65849
04/13/98
-------------------------------------------------------------------------------------------------------------------------
Mozambique CELLSTAR (classes 9) Cautionary notice 7/27/01
7/27/98
-------------------------------------------------------------------------------------------------------------------------
Mozambique CELLSTAR (class 35) Cautionary notice 8/12/01
8/12/98
-------------------------------------------------------------------------------------------------------------------------
Mozambique CELLSTAR (classes 38) Cautionary notice 8/17/01
8/17/98
-------------------------------------------------------------------------------------------------------------------------
New Zealand CELLSTAR (class 9) 245,184 245,184 01/31/02
01/31/95 07/28/98
-------------------------------------------------------------------------------------------------------------------------
New Zealand CELLSTAR (class 38) 245,185 245,185 01/31/02
01/31/95 06/11/97
-------------------------------------------------------------------------------------------------------------------------
New Zealand CELLSTAR (class 42) 245186 245,186 01/31/02
01/31/95 06/11/97
-------------------------------------------------------------------------------------------------------------------------
Nigeria CELLSTAR (class 9) filed
-------------------------------------------------------------------------------------------------------------------------
Norway CELLSTAR (stylized) 98.02304 196990 4/15/2009
03/13/98 4/15/99
-------------------------------------------------------------------------------------------------------------------------
Pakistan CELLSTAR (class 9) 124,187
03/01/94
-------------------------------------------------------------------------------------------------------------------------
Paraguay CELLSTAR (class 9) 9,303,636 165,440 11/16/2003
03/15/93 11/16/93
-------------------------------------------------------------------------------------------------------------------------
Peru CELLSTAR (with design) (class 9) 221,530
05/31/93
-------------------------------------------------------------------------------------------------------------------------
Peru CELLSTAR (and design) (class 9) 221,226 6821 04/22/2004
04/22/94
-------------------------------------------------------------------------------------------------------------------------
Peru CELLSTAR (class 9) 98-56587
02/09/98
-------------------------------------------------------------------------------------------------------------------------
6
CELLSTAR, LTD. FOREIGN TRADEMARKS
---------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
---------------------------------------------------------------------------------------------------------------------------
Peru CELLSTAR (stylized) (class 9) 97-49,924 43,218 02/05/08
10/16/97 02/05/98
---------------------------------------------------------------------------------------------------------------------------
Peru CELLSTAR (class 35) 98-56590 15,092 07/24/08
02/09/98 07/24/98
---------------------------------------------------------------------------------------------------------------------------
Peru CELLSTAR (class 38) 98-56591 14,405 05/06/08
02/09/98 05/06/98
---------------------------------------------------------------------------------------------------------------------------
Peru CELLSTAR (stylized) (class 35) 98-63027 15,506 09/09/08
05/20/98 09/09/98
---------------------------------------------------------------------------------------------------------------------------
Peru CELLSTAR (stylized) (class 38) 98-63028 15,507 09/09/08
05/20/98 09/09/98
---------------------------------------------------------------------------------------------------------------------------
Philippines CELLSTAR (class 9) 95628
09/30/94
---------------------------------------------------------------------------------------------------------------------------
Philippines CELLSTAR (class 9) 0-0000-00000
10/13/98
---------------------------------------------------------------------------------------------------------------------------
Philippines CELLSTAR (stylized) (class 9) 0-0000-00000
10/13/98
---------------------------------------------------------------------------------------------------------------------------
Philippines CELLSTAR (classes 35, 37 and 38) 0-0000-00000
10/13/98
---------------------------------------------------------------------------------------------------------------------------
Philippines CELLSTAR (and device) (class 42) 0-0000-00000
10/13/98
---------------------------------------------------------------------------------------------------------------------------
Philippines CELLSTAR (stylized) (classes 38 and 42) 0-0000-00000
10/13/98
---------------------------------------------------------------------------------------------------------------------------
Poland CELLSTAR (classes 9, 35, 38, 42) 182713
01/27/98
---------------------------------------------------------------------------------------------------------------------------
Romania CELLSTAR (classes 9, 35-39, 42) 16955
03/30/98
---------------------------------------------------------------------------------------------------------------------------
Russian Fed. CELLSTAR (classes 9, 35-39, 42) 98704080
03/13/98
---------------------------------------------------------------------------------------------------------------------------
Rwanda CELLSTAR (classes 9, 35 and 38) 9/29/98 4306
9/29/98
---------------------------------------------------------------------------------------------------------------------------
Sao Tome CELLSTAR Cautionary
Principe notices
---------------------------------------------------------------------------------------------------------------------------
Seychelles CELLSTAR (classes 9) 98000265
10/5/98
---------------------------------------------------------------------------------------------------------------------------
Seychelles CELLSTAR (classes 35) 98000266
10/5/98
---------------------------------------------------------------------------------------------------------------------------
Seychelles CELLSTAR (classes 38) 98000267
10/5/98
---------------------------------------------------------------------------------------------------------------------------
Sierra Leone CELLSTAR (class 9) 9476
06/17/98
---------------------------------------------------------------------------------------------------------------------------
Singapore CELLSTAR (class 9) 6959/94
08/11/94
---------------------------------------------------------------------------------------------------------------------------
Singapore CELLSTAR (class 35) T99/02910H
3/24/99
---------------------------------------------------------------------------------------------------------------------------
Singapore CELLSTAR XXX XX XXX DA T99/02911F
(Chinese Characters) (class 35) 3/24/99
---------------------------------------------------------------------------------------------------------------------------
Singapore CELLSTAR (class 37) 12899/96
11/29/96
---------------------------------------------------------------------------------------------------------------------------
7
CELLSTAR, LTD. FOREIGN TRADEMARKS
------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
Singapore CELLSTAR (class 38) 12900/96
11/29/96
------------------------------------------------------------------------------------------------------------------------
Singapore CELLSTAR (class 42) 12901/96
11/29/96
------------------------------------------------------------------------------------------------------------------------
Singapore CELLSTAR SHE LE SHI DA 5069/97
(Chinese Characters) (class 9) 05/02/97
------------------------------------------------------------------------------------------------------------------------
Singapore CELLSTAR SHE LE SHI DA 0570/97
(Chinese Characters) (class 38) 05/02/97
------------------------------------------------------------------------------------------------------------------------
Slovakia CELLSTAR (classes 9, 35-38, 42) 1273-98
05/14/98
------------------------------------------------------------------------------------------------------------------------
Slovenia CELLSTAR (classes 35, 38) Z-99 70 049
01/15/99
------------------------------------------------------------------------------------------------------------------------
Spain CELLSTAR (class 9) 1,744,587
02/15/93
------------------------------------------------------------------------------------------------------------------------
Sri Lanka CELLSTAR (class 9) 73904
04/06/95
------------------------------------------------------------------------------------------------------------------------
Sri Lanka CELLSTAR (class 35, 36, 37, 38, 42) 819592
11/13/98
------------------------------------------------------------------------------------------------------------------------
Sudan CELLSTAR (class 9) 26608 10/05/98
------------------------------------------------------------------------------------------------------------------------
Sudan CELLSTAR (class 35) 26609 10/05/98
------------------------------------------------------------------------------------------------------------------------
Sudan CELLSTAR (class 38) 26610 10/05/98
------------------------------------------------------------------------------------------------------------------------
Swaziland CELLSTAR (classes 9, 35 38) Filed
------------------------------------------------------------------------------------------------------------------------
St. Helena CELLSTAR (classes 9, 35 38) 5069/97
05/02/97
------------------------------------------------------------------------------------------------------------------------
Switzerland CELLSTAR (classes 9, 35- 39, 42) 1538/1998 456.600
2/25/98 3/12/98
-----------------------------------------------------------------------------------------------------------------------
Taiwan CELLSTAR (class 9) (00) 000000 000,519 08/15/2007
06/16/95 08/16/97
------------------------------------------------------------------------------------------------------------------------
Taiwan CELLSTAR (stylized) (class 35) (00) 00000 00,644 03/15/2008
04/16/97 03/16/98
------------------------------------------------------------------------------------------------------------------------
Taiwan CELLSTAR Chinese transliteration (00) 000000 00,084 03/15/2008
"Shih-Lo-Xxxx-Xx" (class 35) 04/16/97 03/16/98
------------------------------------------------------------------------------------------------------------------------
Taiwan CELLSTAR Chinese transliteration (87) 4215
"Shih-Lo-Xxxx-Xx" (class 35) 02/03/98
------------------------------------------------------------------------------------------------------------------------
Taiwan CELLSTAR (stylized) (class 35) (87) 4212
02/03/98
------------------------------------------------------------------------------------------------------------------------
Taiwan CELLSTAR (stylized) (class 37) (87) 4211
02/03/98
------------------------------------------------------------------------------------------------------------------------
Taiwan CELLSTAR (stylized) (class 39) (87) 4210
02/03/98
------------------------------------------------------------------------------------------------------------------------
Taiwan CELLSTAR (class 36) (87) 4214
02/03/98
------------------------------------------------------------------------------------------------------------------------
Taiwan CELLSTAR (class 42) (00) 0000 000,394 02/15/2009
02/03/98 02/16/99
------------------------------------------------------------------------------------------------------------------------
Tangiers CELLSTAR (classes 9, 35 and 38) 13409
04/16/98
------------------------------------------------------------------------------------------------------------------------
8
--------------------------------------------------------------------------------------------------------------------------------
CELLSTAR, LTD. FOREIGN TRADEMARKS
--------------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
--------------------------------------------------------------------------------------------------------------------------------
Tanzania CELLSTAR (class 9) 26092
8/17/98
--------------------------------------------------------------------------------------------------------------------------------
Tanzania CELLSTAR (class 38) 721
8/17/98
--------------------------------------------------------------------------------------------------------------------------------
Thailand/1/ CELLSTAR (stylized) (class 9) 276,536
11/25/94
--------------------------------------------------------------------------------------------------------------------------------
Thailand CELLSTAR (and device)(class 35) 361,519
06/03/98
--------------------------------------------------------------------------------------------------------------------------------
Thailand CELLSTAR (stylized) (class 36) 361,520
06/03/98
--------------------------------------------------------------------------------------------------------------------------------
Thailand CELLSTAR (stylized) (class 37) 361,521
06/03/98
--------------------------------------------------------------------------------------------------------------------------------
Thailand CELLSTAR (stylized) (class 38) 361,522
06/03/98
--------------------------------------------------------------------------------------------------------------------------------
Thailand CELLSTAR (stylized) (class 39) 361,523
06/03/98
--------------------------------------------------------------------------------------------------------------------------------
Tunisia CELLSTAR (classes 9,35,38) EE98.0589 EE98.0589 4/17/2013
04/17/98 04/17/98
--------------------------------------------------------------------------------------------------------------------------------
Turkey CELLSTAR (class 9) 1998/2800
03/10/98
--------------------------------------------------------------------------------------------------------------------------------
Turkey CELLSTAR (classes 35 and 38) 1998/3133
03/16/98
--------------------------------------------------------------------------------------------------------------------------------
Uganda CELLSTAR (class 9) 21,771
08/12/98
--------------------------------------------------------------------------------------------------------------------------------
Ukraine CELLSTAR (classes 9, 35-38, 42) 65349713
03/16/98
--------------------------------------------------------------------------------------------------------------------------------
Uruguay CELLSTAR (classes 9, 38 and 42) 279,888 279.888 04/29/2007
07/31/95 04/29/97
--------------------------------------------------------------------------------------------------------------------------------
Venezuela/3/ CELLSTAR (stylized) (class 9) 3011
02/26/93
--------------------------------------------------------------------------------------------------------------------------------
Venezuela/6/ CELLSTAR (class 9) 9928/93
06/02/93
--------------------------------------------------------------------------------------------------------------------------------
Vietnam CELLSTAR (class 9) 16,487/ 13868 12/21/2003
12/21/93 10/22/94
--------------------------------------------------------------------------------------------------------------------------------
Vietnam CELLSTAR (classes 9, 35, 36, 37, 38, 39, 42) N981568
05/30/98
--------------------------------------------------------------------------------------------------------------------------------
Vietnam CELLSTAR (class 42) 36202 30188 10/31/2007
10/31/97 03/16/99
--------------------------------------------------------------------------------------------------------------------------------
Zanzibar CELLSTAR (class 9) 243/98 141/98 07/22/2012
07/22/98 07/24/98
--------------------------------------------------------------------------------------------------------------------------------
Zanzibar CELLSTAR (class 35) 242/98 140/98 07/22/2012
07/22/98 07/24/98
--------------------------------------------------------------------------------------------------------------------------------
Zanzibar CELLSTAR (class 38) 241/98 139/98 07/22/2012
07/22/98 07/24/98
--------------------------------------------------------------------------------------------------------------------------------
Brazil CELULAR EXPRESS (class 9) 817.663.924 817.663.924 07/08/2006
12/22/93 07/9/96
--------------------------------------------------------------------------------------------------------------------------------
Brazil CELULAR EXPRESS (class 37) 817.663.932 817.663.932 08/11/2007
12/22/93 08/12/97
--------------------------------------------------------------------------------------------------------------------------------
Brazil Kangaroo design (class 35) 817.762.582 817.762.582 04/15/2006
03/21/94 04/16/96
--------------------------------------------------------------------------------------------------------------------------------
9
--------------------------------------------------------------------------------------------------------------------------------
CELLSTAR, LTD. FOREIGN TRADEMARKS
--------------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
--------------------------------------------------------------------------------------------------------------------------------
Brazil Kangaroo design (class 37) 817.762.590 817.762.590 04/15/2006
03/21/94 04/16/96
--------------------------------------------------------------------------------------------------------------------------------
Colombia/3/ CELULAR EXPRESS (class 9) 9,422,250 165,487 09/27/2004
05/25/94 09/28/94
--------------------------------------------------------------------------------------------------------------------------------
France CELLULAR EXPRESS (and design) (classes 9, 38) 95/569,698 95569698 04/28/2005
04/28/95 04/28/95
--------------------------------------------------------------------------------------------------------------------------------
Germany CELLULAR EXPRESS (and design) (classes 9, 38) 39517285.3 395,172,285 04/29/2005
04/21/95 04/29/96
--------------------------------------------------------------------------------------------------------------------------------
Great Britain CELLULAR EXPRESS (and design) (classes 9, 38) 2,018,225 2,018,225 04/22/2005
04/22/95 03/01/96
--------------------------------------------------------------------------------------------------------------------------------
Korea CELLULAR EXPRESS (and design) (class 39) 13992/95 348,903 10/22/2006
04/12/95 10/22/96
--------------------------------------------------------------------------------------------------------------------------------
Korea CELLULAR EXPRESS (and design) (class 35) 3359/95 34,230 01/15/2007
04/12/95 01/15/97
--------------------------------------------------------------------------------------------------------------------------------
Korea CELLULAR EXPRESS (and design) (class 42) 3450/95 36,433 05/29/2007
04/14/95 05/29/97
--------------------------------------------------------------------------------------------------------------------------------
Mexico CELULAR EXPRESS 120,356 425,270
08/16/91 11/12/92
--------------------------------------------------------------------------------------------------------------------------------
Mexico CELULAR EXPRESS 121,856 403,652
09/05/91 01/15/92
--------------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELULAR EXPRESS 135,932 419,106
(and design) 03/24/92 08/03/92
--------------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELULAR EXPRESS 135,933
(and design) 03/24/92
--------------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELULAR EXPRESS 159,172
01/25/93
--------------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELULAR EXPRESS 159,238
(and design) 01/26/93
--------------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELULAR EXPRESS 165,316
04/14/93
--------------------------------------------------------------------------------------------------------------------------------
Mexico/5/ CELULAR EXPRESS MUCHO MAS QUE TELEFONIA CELULAR (class 38) 302,740
07/29/97
--------------------------------------------------------------------------------------------------------------------------------
New Zealand CELLULAR EXPRESS (and design) (class 9) 246,076 246,076 02/22/2002
02/22/95 11/10/97
--------------------------------------------------------------------------------------------------------------------------------
New Zealand CELLULAR EXPRESS (and design) (class 38) 246,077 246,077 02/22/2002
02/22/95 10/30/97
--------------------------------------------------------------------------------------------------------------------------------
New Zealand CELLULAR EXPRESS (and design) (class 42) 246,078 246,078 02/22/2002
02/22/95 10/30/97
--------------------------------------------------------------------------------------------------------------------------------
Philippines/3/ CELLULAR EXPRESS (and design) (class 9) 107,227
04/03/96
--------------------------------------------------------------------------------------------------------------------------------
South Africa CELLULAR EXPRESS (and design) (class 9) 9,503,360
03/17/95
--------------------------------------------------------------------------------------------------------------------------------
South Africa CELLULAR EXPRESS (and design) (class 38) 9,503,361
03/17/95
--------------------------------------------------------------------------------------------------------------------------------
South Africa CELLULAR EXPRESS (and design) (class 42) 9,503,362
03/17/95
--------------------------------------------------------------------------------------------------------------------------------
Taiwan CELLULAR EXPRESS (and design) (class 9) (00)000000 000,578 08/21/2007
06/16/95 09/01/97
--------------------------------------------------------------------------------------------------------------------------------
10
----------------------------------------------------------------------------------------------------------------------------
CELLSTAR, LTD. FOREIGN TRADEMARKS
----------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Mexico CELLULAR ONE 143,545
06/30/92
----------------------------------------------------------------------------------------------------------------------------
Mexico CELLULAR ONE 143,546
06/30/92
----------------------------------------------------------------------------------------------------------------------------
Mexico CELLULAR ONE 143,548
06/30/92
----------------------------------------------------------------------------------------------------------------------------
Brazil CELULAR EXPRESS (and design) (class 9) 817.762.604 817.762.604 04/15/2006
03/21/94 04/16/96
----------------------------------------------------------------------------------------------------------------------------
Brazil CELULAR EXPRESS (and design) (class 37) 817.762.612 817.762.612 04/15/2006
03/21/94 04/16/96
----------------------------------------------------------------------------------------------------------------------------
Argentina SERVICELL (class 9) 1,899,480 1,531,704 07/29/2004
11/17/93 07/29/94
----------------------------------------------------------------------------------------------------------------------------
Colombia SERVICELL (class 9) 421,437 158,157 05/16/2004
12/06/93 05/17/94
----------------------------------------------------------------------------------------------------------------------------
_____________________________________
/1/ Pending governmental approval of assignment from Cellstar Corporation
/2/ Pending governmental approval of assignment from ASR Telecommunicacoes S.A.
and Cellstar Corporation.
/3/ Pending governmental approval of assignment from National Auto Center, Inc.
/4/ Pending governmental approval of assignment from ASR Telecommunicacoes S.A.
and National Auto Center, Inc.
/5/ Pending governmental approval of assignment from Celular Express, S.A. de
C.V.
/6/ Pending governmental approval of assignment from ASR Telecommunicacoes S.A.
11
--------------------------------------------------------------------------------------------------------------------------
CELLSTAR PACIFIC PTE, LTD. FOREIGN TRADEMARKS
--------------------------------------------------------------------------------------------------------------------------
Country Xxxx (class) Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
--------------------------------------------------------------------------------------------------------------------------
Saudi Arabia CELLSTAR (class 9) 30267 383/12 04/01/05
07/30/95 09/09/96
--------------------------------------------------------------------------------------------------------------------------
Saudi Arabia CELLSTAR (class 35) 30268 383/13 04/01/05
07/30/95 09/09/96
--------------------------------------------------------------------------------------------------------------------------
Saudi Arabia CELLSTAR (class 38) 30269 383/14 04/01/05
07/30/95 09/09/96
--------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxx XXXXXXXX 00000 9512 05/20/2005
Emirates 5/20/95 03/09/97
--------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxx XXXXXXXX 00000 9527 05/20/2005
Emirates 5/20/95 03/09/97
--------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxx XXXXXXXX 00000 9528 05/20/2005
Emirates 5/20/95 03/09/97
--------------------------------------------------------------------------------------------------------------------------
12
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR, LTD. US TRADEMARKS
---------------------------------------------------------------------------------------------------------------------------------
Xxxx Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR 74/354,588 1,835,240 05/10/2004 *05/10/2000 -
02/15/94 05/10/94 (S)8 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
TWO NAMES YOU CAN CLEARLY COUNT ON 74/483,718 1,875,583 01/24/2005 *01/24/2001 - (S)8
01/28/94 01/24/95 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR w/globe logo 74/489,103 1,896,626 5/30/2005 *5/30/2001 - (S)8
[LOGO] 2/14/94 5/30/95 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
INTELLIGENT FAST CHARGER 74/559,265 1,968,988 04/16/2006 *4/16/2002 - (S)8
08/10/94 04/16/96 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
ACCESSORY PERFORMANCE PAC 74/677,425 2,007,790 10/05/2006 *10/15/2002 - (S)8
05/17/95 11/15/96 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
CELLULAR PHONE CENTER and design 74/577,186 1,967,868 04/16/2006 *04/16/2002 - (S)8
[LOGO] 09/22/94 04/16/96 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
NATIONAL COMMUNICATIONS and design 74/582,146 2,152,686 04/21/2008
[LOGO] 10/03/94 04/21/98 *04/21/2004 - (S)8 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
ESSENTIALS CELLULAR ACCESSORIES (stylized) 74/686,976 2,086,312 08/05/2007 08/05/2003 (S)8
[LOGO] 06/12/95 08/05/97 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
ESSENTIALS CELLULAR ACCESSORIES (stylized) 74/686,975 1,985,444 07/09/2006 *07/09/2002 (S)8
[LOGO] 06/12/95 07/09/96 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
COMMUNICATION CENTER (stylized) 74/582,145 2,016,191 11/12/2006 *11/12/2002-
[LOGO] 10/03/94 11/12/96 (S)8 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
FULFILLING A WIRELESS WORLD 74/674,551 2,007,764 10/15/2006 *10/15/2002 - (S)8
05/16/95 11/15/96 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
STARPOINTS 74/674,586 1,974,916 05/21/2006 *05/21/2002 - (S)8
05/18/95 05/21/96 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
FULFILLING YOUR WIRELESS WORLD 74/603,603 2,055,075 10/01/2006 *10/01/2002 - (S)8
11/28/94 10/01/96 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR (stylized) 74/651,394 1,976,263 05/28/2006 *05/28/2001 - (S)8
[LOGO] 03/24/95 05/28/96 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
INTERACT (stylized) 74/663,849 2,084,473 07/29/2007 07/29/2003 - (S)8
[LOGO] 04/20/95 07/29/97 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
INTERACT INTERACTIVE ASSISTANT FOR CELLULAR 74/663,850 2,065,618 05/27/2007 05/27/2003 - (S)8
TECHNOLOGY 04/20/95 05/27/97 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
BACKED BY THE BEST 74/735,081
09/27/95
---------------------------------------------------------------------------------------------------------------------------------
13
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR, LTD. US TRADEMARKS
---------------------------------------------------------------------------------------------------------------------------------
Xxxx Ser. No./ Reg. No./ Renewal Date/
Filing Date Reg. Date *Other
---------------------------------------------------------------------------------------------------------------------------------
NATIONAL AUTO CELLULAR and design 75/015,298 2,122,720 07/09/2007 07/06/2003 - (S)8
[LOGO] 11/06/95 12/23/97 and 15 Affidavits
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR CSC CUSTOMER SATISFACTION CENTER and design not filed
[LOGO]
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR 75/399597
12/3/97
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR w/globe logo 75/541,329
[LOGO] 08/24/98
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR NET XTREME 75/467,264
04/13/98
---------------------------------------------------------------------------------------------------------------------------------
AOS ON-LINE and design 75/622,176
[LOGO] 01/19/99
---------------------------------------------------------------------------------------------------------------------------------
CELLSTAR ADVANCED ORDER SYSTEM and design 75/622,175
[LOGO] 01/19/99
---------------------------------------------------------------------------------------------------------------------------------
14
-------------------------------------------------------------------------------------------------------------------
CELLSTAR, LTD. US COPYRIGHTS
-------------------------------------------------------------------------------------------------------------------
WORK TITLE Copyright No. Registration Date Expiration Date
-------------------------------------------------------------------------------------------------------------------
ACCESSORY PERFORMANCE PACK BOX WITH HANDLE VA 725-904 5/19/95 May 20, 2069
-------------------------------------------------------------------------------------------------------------------
15
---------------------------------------------------------------------------------------------------------------
CELLSTAR, LTD. US PATENTS
---------------------------------------------------------------------------------------------------------------
TITLE INVENTOR Patent No. Issue Date
---------------------------------------------------------------------------------------------------------------
UNITIZED PACKAGE ASSEMBLY Xxxxxxx X. Xxxxxxxxxx 5,565,159 12/23/97
---------------------------------------------------------------------------------------------------------------
_______________________________
16
SCHEDULE 10.2
EXISTING LIENS
------------------------------------------------------------------------------------------------------------------------------
Debtor Jurisdiction Secured Party File No File Date Collateral
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Florida Citicorp Dealer 96-211524 10/07/96 1996 Mitsubishi PMWR
Finance #30198
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Florida Citicorp Dealer 97-008867 1/13/97 1996 Xxxxxxxxx
CellStar Finance #352948
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas Xxxxxxx Corp. 93-90829 5/10/93 Equipment
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas Citicorp Corp. 93-102461 5/24/93 Sch not on file
with S/S
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas European American 94-30859 2/17/94 Equipment
Bank
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas Xxxxxxx Corp. 94-113649 6/9/94 Equipment
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas Xxxxxxx Corp. 94-148847 7/28/94 Equipment
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas IBM Corp. 95-6283 1/10/95 Equipment
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas IBM Corp. 95-6284 1/10/95 Equipment
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas European American 95-39185 2/27/95 Equipment
Bank
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas Citicorp Dealer 96-202240 10/10/96 1996 Mitsubishi PMWR
Finance #30198
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas Xxxxxxx Corp. 96-254520 12/27/96 Equipment
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas Citicorp Dealer 97-20214 02/03/97 1996 Xxxxxxxxx
Finance #352948
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Texas Xxxxxxx Leasing 97-104133 5/29/97 Equipment
CellStar, Ltd. Corp.
---------------------------------------------------------------------------------------------------------------------------------
CellStar West, Inc. S/S California Lucent Technologies 9430260066 10/6/94 AT&T Inventory
---------------------------------------------------------------------------------------------------------------------------------
CellStar West, Inc. S/S California Bay Area Cellular 9610860112 4/16/96 Equipment, Inventory,
consignment
---------------------------------------------------------------------------------------------------------------------------------
CellStar, Ltd. S/S Texas GTE Leasing Corp. 00-00000 0/20/95 Telephone equipment
---------------------------------------------------------------------------------------------------------------------------------
CellStar, Ltd. S/S Texas Computer Sales Int'l 95-76492 4/18/95 Equipment
---------------------------------------------------------------------------------------------------------------------------------
1
SCHEDULE 10.2
EXISTING LIENS
---------------------------------------------------------------------------------------------------------------------------------
National Auto Center, Inc. S/S Florida Citicorp Dealer 96-211524 10/07/96 1996 Mitsubishi PMWR
Finance #30198
---------------------------------------------------------------------------------------------------------------------------------
CellStar, Ltd. S/S Texas European American 95-77664 4/20/95 Equipment Lease
Bank
---------------------------------------------------------------------------------------------------------------------------------
CellStar Ltd. S/S Texas Xxxxxxx Corp. 95-82654 4/27/95 Equipment
---------------------------------------------------------------------------------------------------------------------------------
CellStar, Ltd. S/S Texas USL Capital Corp. 95-174786 9/8/95 Equipment
---------------------------------------------------------------------------------------------------------------------------------
CellStar, Ltd. S/S Texas Computer Sales Int'l 95-211875 11/1/95 Equipment
---------------------------------------------------------------------------------------------------------------------------------
CellStar, Ltd. S/S Texas American Business 95-233005 12/4/95 Equipment
Credit Corp.
---------------------------------------------------------------------------------------------------------------------------------
CellStar, Ltd. S/S Texas American Business 96-134429 7/8/96 Equipment
Credit Corp.
---------------------------------------------------------------------------------------------------------------------------------
CellStar, Ltd. S/S Texas AT&T Leasing Systems 96-201879 10/10/96 Equipment
---------------------------------------------------------------------------------------------------------------------------------
CellStar, Ltd. National Auto S/S Texas Xxxxxxx Leasing 97-104133 5/19/97 Equipment
Center, Inc. Corp.
---------------------------------------------------------------------------------------------------------------------------------
CellStar S/S Florida Citicorp Dealer 97-008867 1/13/97 1996 Xxxxxxxxx
Finance #352948
---------------------------------------------------------------------------------------------------------------------------------
CellStar Corporation Xxxxxx Co., Texas Houston Westpark 874662 12/13/93 Furniture, Equipment,
Warehouse Inventory
---------------------------------------------------------------------------------------------------------------------------------
CellStar Corporation S/S Texas Houston Westpark 93-226388 11/29/93 Furniture, Equipment,
Warehouse Inventory
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
2
