PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
An itemized statement of the estimated amount of the expenses,
other than underwriting discounts and commissions, incurred and to be incurred
in connection with the issuance and distribution of the securities registered
pursuant to this Registration Statement is as follows:
Securities and Exchange Commission registration fee......... $ 5,910
NYSE listing fee............................................ 830
Printing and engraving expenses............................. 2,000
Accounting fees and expenses................................ 10,000
Legal fees and expenses..................................... 10,000
Transfer Agent fees and expenses............................ 1,000
Miscellaneous............................................... 10,260
------
Total...................................................... $40,000
======
Item 14. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the
"DGCL") provides, in effect, that any person made a party to any action by
reason of the fact that he is or was a director, officer, employee or agent of
the Company may and, in certain cases, must be indemnified by the Company
against, in the case of a non-derivative action, judgments, fines, amounts
paid in settlement and reasonable expenses (including attorneys' fees)
incurred by him as a result of such action, and in the case of a derivative
action, against expenses (including attorneys' fees), if in either type of
action he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Company. This indemnification does
not apply, in a derivative action, to matters as to which it is adjudged that
the director, officer, employee or agent is liable to the Company, unless upon
court order it is determined that, despite such adjudication of liability, but
in view of all the circumstances of the case, he is fairly and reasonably
entitled to indemnity for expenses, and, in a non-derivative action, to any
criminal proceeding in which such person had reasonable cause to believe his
conduct was unlawful.
Section 102 of the DGCL allows the Company to eliminate or
limit the personal liability of a director to the Company or to any of its
stockholders for monetary damage for a breach of fiduciary duty as a director,
except in the case where the director (i) breaches such person's duty of
loyalty to the Company or its stockholders, (ii) fails to act in good faith,
engages in intentional misconduct or knowingly violates a law, (iii)
authorizes the payment of a dividend or approves a stock purchase or
redemption in violation of Section 174 of the DGCL or (iv) obtains an improper
personal benefit. Article Tenth of the Company's Certificate of Incorporation
includes a provision which eliminates directors' personal liability to the
fullest extent permitted under the Delaware General Corporation Law.
Article Tenth of the Company's Certificate of Incorporation
provides that the Company shall indemnify any person (and the heirs, executors
or administrators of such person) who was or is a party or is threatened to be
made a party to, or is involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director or
officer of the Company or is or was serving at the request of the Company as a
director or officer of another corporation, partnership, joint venture, trust
or other enterprise, to the fullest extent permitted by Delaware Law. Each
such indemnified party shall have the right to be paid by the Company for any
expenses incurred in connection with any such proceeding in advance of its
final disposition to the fullest extent authorized by Delaware Law. Article
Tenth of the Company's Certificate of Incorporation also provides that the
Company may, by action of its Board of Directors, provide indemnification to
such of the employees and agents of the Company to such extent and to such
effect as the Board of Directors shall determine to be appropriate and
authorized by Delaware Law.
As permitted by Delaware Law and the Company's Certificate of
Incorporation, the Company maintains insurance covering its directors and
officers against certain liabilities incurred by them in their capacities as
such, including among other things, certain liabilities under the Securities
Act of 1933, as amended.
Item 15. Recent Sales of Unregistered Securities
In the second quarter of 1996, the Company offered 2,775,000
shares of its Class B Common Stock to certain of its employees, of which
2,510,400 shares were purchased for $17.6 million. The shares were issued
without registration under the Securities Act in reliance upon the exemptions
from registration afforded by Section 4(2) of the Securities Act, and
Regulation D and Regulation S promulgated under the Securities Act. All such
shares were issued pursuant to the Company's Key Employee Stock Purchase Plan
and are subject to certain restrictions.
Reference is made to "Management--Rollover Plan; Incentive
Stock Units" and "The Split-Off and the Reorganization--The Split-Off"
regarding shares, and options exercisable for shares, of the Company's Common
Equity, issued in connection with the Split-Off, the purchasers thereof and
the consideration therefor. Such issuances will occur without registration
under the Securities Act in reliance upon the exemptions from registration
afforded by Section 4(2) of the Securities Act and Regulation D promulgated
under the Securities Act.
Item 16. Exhibits and Financial Statement Schedules.
(a) List of Exhibits.
3.01 -- Form of Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit
3.01 to the Company's Registration Statement on Form S-1 (File No. 333-08453) (the "IPO
S-1"))
3.02 -- Form of Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit
3.03 to the IPO S-1)
4.01 -- Specimen Certificate for the Class A Common Stock, par value $0.01 per share, of the
Registrant (incorporated by reference to Exhibit 4.01 to the IPO S-1)
5.01 -- Opinion of Davis Polk & Wardwell
10.01 -- Ingram Micro Inc. Executive Incentive Bonus Plan (incorporated by reference to Exhibit 10.01
to the IPO S-1)
10.02 -- Ingram Micro Inc. Management Incentive Bonus Plan (incorporated by reference to Exhibit
10.02 to the IPO S-1)
10.03 -- Ingram Micro Inc. General Employee Incentive Bonus Plan (incorporated by reference to
Exhibit 10.03 to the IPO S-1)
10.04 -- Agreement dated as of December 21, 1994 between the Company and Jeffrey R. Rodek
(incorporated by reference to Exhibit 10.04 to the IPO S-1)
10.05 -- Agreement dated as of April 25, 1988 between the Company and Sanat K. Dutta (incorporated
by reference to Exhibit 10.05 to the IPO S-1)
10.06 -- Agreement dated as of June 21, 1991 between the Company and John Wm. Winkelhaus, II
(incorporated by reference to Exhibit 10.06 to the IPO S-1)
10.07 -- Ingram Micro Inc. Rollover Stock Option Plan (incorporated by reference to Exhibit 10.07 to
the IPO S-1)
10.08 -- Ingram Micro Inc. Key Employee Stock Purchase Plan (incorporated by reference to Exhibit
10.08 to the IPO S-1)
10.09 -- Ingram Micro Inc. 1996 Equity Incentive Plan (incorporated by reference to Exhibit 10.09 to
the IPO S-1)
10.10 -- Ingram Micro Inc. Amended and Restated 1996 Equity Incentive Plan (incorporated by
reference to Exhibit 10.10 to the IPO S-1)
10.11 -- Severance Agreement dated as of June 1, 1996 among the Company, Ingram Industries,
Linwood A. Lacy, Jr., and NationsBank, N.A., as trustee of the Linwood A. Lacy, Jr. 1996
Irrevocable Trust dated February 1996 (incorporated by reference to Exhibit 10.11 to the IPO
S-1)
10.12 -- Credit Agreement dated as of October 30, 1996 among the Company and Ingram European
Coordination Center N.V., Ingram Micro Singapore Pte Ltd., and Ingram Micro Inc., as
Borrowers and Guarantors, certain financial institutions, as the Lenders, NationsBank of Texas,
N.A., as Administrative Agent for the Lenders and The Bank of Nova Scotia as Documentation
Agent for the Lenders
10.13 -- Amended and Restated Reorganization Agreement dated as of October 17, 1996 among the
Company, Ingram Industries, and Ingram Entertainment
10.14 -- Registration Rights Agreement dated as of November 6, 1996 among the Company and the
persons listed on the signature pages thereof
10.15 -- Board Representation Agreement dated as of November 6, 1996
10.16 -- Thrift Plan Liquidity Agreement dated as of November 6, 1996 among the Company and the
Ingram Thrift Plan
10.17 -- Tax Sharing and Tax Services Agreement dated as November 6, 1996 among the Company,
Ingram Industries, and Ingram Entertainment
10.18 -- Master Services Agreement dated as of November 6, 1996 among the Company, Ingram
Industries, and Ingram Entertainment
10.19 -- Employee Benefits Transfer and Assumption Agreement dated as of November 6, 1996 among
the Company, Ingram Industries, and Ingram Entertainment
10.20 -- Data Center Services Agreement dated as of November 6, 1996 among the Company, Ingram
Book Company, and Ingram Entertainment Inc.
10.21 -- Amended and Restated Exchange Agreement dated as of November 6, 1996 among the
Company, Ingram Industries, Ingram Entertainment and the other parties thereto
10.22 -- Agreement dated as of August 26, 1996 between the Company and Jerre L. Stead (incorporated
by reference to Exhibit 10.22 to the IPO S-1)
10.23 -- Definitions for Ingram Funding Master Trust Agreements (incorporated by reference to Exhibit
10.23 to the IPO S-1)
10.24 -- Asset Purchase and Sale Agreement dated as of February 10, 1993 between Ingram Industries
and Ingram Funding (incorporated by reference to Exhibit 10.24 to the IPO S-1)
10.25 -- Pooling and Servicing Agreement dated as of February 10, 1993 among Ingram Funding,
Ingram Industries and Chemical Bank (incorporated by reference to Exhibit 10.25 to the IPO
S-1)
10.26 -- Amendment No. 1 to the Pooling and Servicing Agreement dated as of February 12, 1993, the
Asset Purchase and Sale Agreement dated as of February 12, 1993, and the Liquidity
Agreement dated as of February 12, 1993 (incorporated by reference to Exhibit 10.26 to the
IPO S-1)
10.27 -- Certificate Purchase Agreement dated as of July 23, 1993 (incorporated by reference to Exhibit
10.27 to the IPO S-1)
10.28 -- Schedule of Certificate Purchase Agreements (incorporated by reference to Exhibit 10.28 to the
IPO S-1)
10.29 -- Series 1993-1 Supplement to Ingram Funding Master Trust Pooling and Servicing Agreement
dated as of July 23, 1993 (incorporated by reference to Exhibit 10.29 to the IPO S-1)
10.30 -- Schedule of Supplements to Ingram Funding Master Trust Pooling and Servicing Agreement
dated as of July 23, 1993 (incorporated by reference to Exhibit 10.30 to the IPO S-1)
10.31 -- Letter of Credit Reimbursement Agreement dated as of February 10, 1993 (incorporated by
reference to Exhibit 10.31 to the IPO S-1)
10.32 -- Liquidity Agreement dated as of February 10, 1993 (incorporated by reference to Exhibit 10.32
to the IPO S-1)
10.33 -- Amendment No. 2 to the Pooling and Servicing Agreement dated as of February 12, 1993, the
Asset Purchase and Sale Agreement dated as of February 12, 1993, and the Liquidity
Agreement dated as of February 12, 1993 (incorporated by reference to Exhibit 10.33 to the
IPO S-1)
10.34 -- Agreement dated as of October 10, 1996 between the Company and Michael J. Grainger
(incorporated by reference to Exhibit 10.34 to the IPO S-1)
10.35 -- Form of Repurchase Agreement (incorporated by reference to Exhibit 10.35 to the IPO S-1)
21.01 -- Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.01 to the IPO S-1)
23.01 -- Consent of Price Waterhouse LLP
23.02 -- Consent of Davis Polk & Wardwell (included in their opinion filed as Exhibit 5.01)
24.01 -- Powers of Attorney of certain officers and directors of the Registrant (see page II-5 and II-6)
(b) Financial Statement Schedules
See Schedule II on page S-1. All other schedules for which
provision is made in the applicable accounting regulations of the Securities
and Exchange Commission are not required under the related instructions or are
inapplicable or the information is contained in the Consolidated Financial
Statements and related notes and therefore have been omitted.
Item 17. Undertakings.
The undersigned registrant hereby undertakes that:
(1) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(2) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(3) For the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Ingram Micro Inc. has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Santa
Ana, State of California, on this 18th day of November, 1996.
Ingram Micro Inc.
By: /s/ Michael J. Grainger
---------------------------
Name: Michael J. Grainger
Title: Executive Vice President and
Worldwide Chief Financial
Officer
POWER OF ATTORNEY
The Registrant and each person whose signature appears below
constitutes and appoints Jerre L. Stead, James E. Anderson, Jr. and Michael J.
Grainger, and any agent for service named in this Registration Statement and
each of them, his, her, or its true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him, her, or it and in
his, her, or its name, place and stead, in any and all capacities, to sign and
file (i) any and all amendments (including post-effective amendments) to this
Registration Statement, with all exhibits thereto, and other documents in
connection therewith, and (ii) a registration statement, and any and all
amendments thereto, relating to the offering covered hereby filed pursuant to
Rule 462(b) under the Securities Act of 1933, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and things
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he, she, or it might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on
the dates indicated.
Signature Title Date
--------- ------ ----
/s/ Jerre L. Stead Chief Executive Officer (Principal November 18, 1996
- --------------------------------- Executive Officer); Chairman of the
Jerre L. Stead Board
/s/ Michael J. Grainger Executive Vice President and November 18, 1996
- --------------------------------- Worldwide Chief Financial Officer
Michael J. Grainger (Principal Financial Officer and
Principal Accounting Officer)
/s/ Martha R. Ingram Director November 18, 1996
- ---------------------------------
Martha R. Ingram
/s/ John R. Ingram Director November 18, 1996
- ---------------------------------
John R. Ingram
/s/ David B. Ingram Director November 18, 1996
- ---------------------------------
David B. Ingram
/s/ Philip M. Pfeffer Director November 18, 1996
- ---------------------------------
Philip M. Pfeffer
/s/ Don H. Davis, Jr. Director November 18, 1996
- ---------------------------------
Don H. Davis, Jr.
/s/ J. Phillip Samper Director November 18, 1996
- ---------------------------------
J. Phillip Samper
/s/ Joe B. Wyatt Director November 18, 1996
- ---------------------------------
Joe B. Wyatt
INGRAM MICRO INC.
SCHEDULE II --VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Balance at Charged to Balance
beginning costs and at end of
Description of year expenses Other(*) Deductions year
----------- ----------- ---------- -------- ---------- ----------
Allowance for doubtful accounts
receivable and sales returns:
1995................................ $25,668 $24,168 $673 $(19,718) $30,791
1994................................ 18,594 20,931 (4) (13,853) 25,668
1993................................ 12,928 17,492 2,343 (14,169) 18,594
Inventory Obsolescence:
1995................................ $10,706 $13,199 $207 $(11,867) $12,245
1994................................ 9,431 9,410 257 (8,392) 10,706
1993................................ 6,076 6,587 121 (3,353) 9,431
- ---------------
* Other includes recoveries, acquisitions and the effect of fluctuations in
foreign currency.
Exhibit 5.01
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NY 10017
writer's direct number
212-450-4000
November 18, 1996
Ingram Micro Inc.
1600 E. St. Andrew Place
Santa Ana, CA 92705
Re: Ingram Micro Inc. Registration Statement on Form S-1
Relating to the sale by the Ingram Thrift Plan from time to time
of up to 800,000 shares of Class A Common Stock of Ingram Micro Inc.
Ladies and Gentlemen:
We have acted as counsel to Ingram Micro Inc. (the "Company") in
connection with the Company's Registration Statement on Form S-1 (the
"Registration Statement") filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), for
the registration for sale by the Ingram Thrift Plan from time to time of up to
800,000 shares (the "Shares") of the Company's Class A Common Stock, par value
$0.01 per share (the "Common Stock"), issuable pursuant to the Company's
Rollover Stock Option Plan (the "Plan").
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary for the purposes of rendering this opinion.
On the basis of the foregoing and assuming the due execution
and delivery of certificates representing the Shares, we are of the opinion
that the Shares have been duly authorized and, when and to the extent issued
upon conversion of a like number of shares of the Company's Class B Common
Stock, par value $0.01per share, pursuant to the Company's Certificate of
Incorporation, will be validly issued, fully paid and non-assessable.
If the Company files an abbreviated registration statement (the
"Rule 462(b) Registration Statement"), which incorporates the Registration
Statement, to register additional shares of Common Stock (the "Additional
Shares") pursuant to Rule 462(b) under the Securities Act, for purposes of the
preceding opinion, any reference therein to the "Shares" shall be deemed to
include the Additional Shares.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United States of America and the General Corporation Law of the
State of Delaware.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement, and if filed, the Rule 462(b) Registration
Statement. We also consent to the reference to our name under the caption
"Legal Matters" in the Prospectus contained in the Registration Statement, and
if filed, the Rule 462(b) Registration Statement.
Very truly yours,
/S/ DAVIS POLK & WARDWELL
EXHIBIT 10.12
US $1,000,000,000
CREDIT AGREEMENT
dated as of October 30, 1996
among
INGRAM MICRO INC.,
INGRAM EUROPEAN COORDINATION CENTER N.V.,
INGRAM MICRO SINGAPORE PTE LTD.
and
INGRAM MICRO INC. (Canada),
as Borrowers and Guarantors,
CERTAIN FINANCIAL INSTITUTIONS,
as the Lenders,
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent
for the Lenders,
and
THE BANK OF NOVA SCOTIA,
as Documentation Agent for the Lenders,
and
THE CHASE MANHATTAN BANK,
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLANDS BRANCH
THE FIRST NATIONAL BANK OF CHICAGO,
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, ATLANTA AGENCY
and
ROYAL BANK OF CANADA,
as Co-Agents
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms.......................................................3
1.2. Use of Defined Terms...............................................30
1.3. Cross-References...................................................30
1.4. Accounting and Financial Determinations............................30
1.5. Calculations.......................................................30
ARTICLE II
COMMITMENTS, ETC.
2.1. Commitments........................................................31
2.2. Extensions of the Commitment Termination Date......................32
2.3. Reductions of the Commitment Amounts...............................34
ARTICLE III
BORROWING PROCEDURES,
LETTERS OF CREDIT AND REGISTERS
3.1. Borrowing Procedure for Pro-Rata Revolving Loans...................35
3.2. Pro-Rata Letter of Credit Issuance Procedures......................36
3.2.1. Other Lenders' Participation.......................................36
3.2.2. Disbursements......................................................36
3.2.3. Reimbursement......................................................37
3.2.4. Deemed Disbursements...............................................38
3.2.5. Nature of Reimbursement Obligations................................38
3.3. Non-Rata Revolving Loan Facility...................................39
3.3.1. Non-Rata Revolving Loans...........................................39
3.3.2. Ineligible Currencies..............................................40
3.3.3. Limitations on Making Non-Rata Revolving Loans.....................40
3.3.4. Procedure for Making Non-Rata Revolving Loans......................40
3.3.5. Maturity of Non-Rata Revolving Loans...............................41
3.3.6. Non-Rata Revolving Loan Records....................................41
3.3.7. Quarterly Report...................................................41
3.4. Non-Rata Letter of Credit Facility.................................41
3.4.1. Non-Rata Letters of Credit.........................................41
3.4.2. Ineligible Currencies..............................................42
3.4.3. Limitations on Issuing Non-Rata Letters of Credit..................42
3.4.4. Procedures for Issuing Non-Rata Letters of Credit..................42
3.4.5. Disbursements......................................................42
3.4.6. Reimbursement......................................................42
3.5. Bid Rate Facility..................................................43
3.5.1. Bid Rate Loans.....................................................43
3.5.2. Quote Request......................................................43
3.5.3. Submission of Quotes...............................................43
3.5.4. Acceptance of Quotes...............................................44
3.5.5. Bid Rate Loan......................................................44
3.5.6. Maturity of Bid Rate Loans.........................................45
3.5.7. Bid Rate Loan Records..............................................45
3.5.8. Limitations on Making Bid Rate Loans...............................45
ARTICLE IV
PRINCIPAL, INTEREST AND FEE PAYMENTS
4.1. Repayments and Prepayments of Pro-Rata Revolving Loans.............45
4.2. Interest Provisions................................................46
4.2.1. Rates..............................................................47
4.2.2. Post-Maturity Rates................................................47
4.2.3. Continuation and Conversion Elections..............................47
4.2.4. Payment Dates......................................................48
4.2.5. Interest Rate Determination........................................49
4.2.6. Additional Interest on LIBO Rate Loans.............................49
4.3. Fees...............................................................49
4.3.1. Administration and Documentation Fees..............................50
4.3.2. Facility Fees......................................................50
4.3.3. Letter of Credit Fees..............................................51
4.4. Rate and Fee Determinations........................................52
4.5. Obligations in Respect of Non-Rata Credit Extensions...............52
ARTICLE V
CERTAIN PAYMENT PROVISIONS
5.1. Illegality; Currency Restrictions..................................52
5.2. Deposits Unavailable...............................................53
5.3. Increased Credit Extension Costs, etc..............................54
5.4. Funding Losses.....................................................54
5.5. Increased Capital Costs............................................55
5.6. Discretion of Lenders as to Manner of Funding......................55
5.7. Taxes..............................................................55
5.8. Payments...........................................................57
5.8.1. Pro-Rata Credit Extensions.........................................57
5.8.2. Non-Rata Obligations...............................................58
5.9. Sharing of Payments................................................59
5.10. Right of Set-off...................................................60
5.11. Judgments, Currencies, etc.........................................60
5.12. Replacement of Lenders.............................................61
5.13. Change of Lending Office...........................................61
ARTICLE VI
CONDITIONS TO MAKING CREDIT EXTENSIONS
AND ACCESSION OF ACCEDING BORROWERS
6.1. Initial Credit Extension...........................................62
6.1.1. Resolutions, etc...................................................62
6.1.2. Effective Date Certificate.........................................62
6.1.3. Delivery of Notes..................................................62
6.1.4. Guaranties, etc....................................................63
6.1.5. Financial Information, etc.........................................63
6.1.6. Compliance Certificate.............................................63
6.1.7. Payment of Outstanding Indebtedness................................63
6.1.8. Consents, etc......................................................63
6.1.9. Closing Fees, Expenses, etc........................................63
6.1.10. Opinions of Counsel................................................63
6.1.11. Investment Prospectus..............................................64
6.1.12. Senior Executive Officer's Certificate.............................64
6.1.13. Satisfactory Legal Form............................................64
6.2. All Credit Extensions..............................................65
6.2.1. Compliance with Warranties, No Default, etc........................65
6.2.2. Credit Extension Request...........................................66
6.2.3. Non-Rata Revolving Loans...........................................66
6.2.4. Non-Rata Letters of Credit.........................................66
6.2.5. Bid Rate Loans.....................................................66
6.3. Acceding Borrowers.................................................66
6.3.1. Resolutions, etc...................................................67
6.3.2. Delivery of Accession Request and Acknowledgment and Notes.........67
6.3.3. Guaranties, etc....................................................68
6.3.4. Compliance Certificate.............................................68
6.3.5. Consents, etc......................................................68
6.3.6. Opinions of Counsel................................................68
6.4. Waiver of Notice under Existing Industries Credit Agreement........68
6.5. Waiver of Notice under Existing Micro Credit Agreement.............68
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1. Organization, etc..................................................69
7.2. Due Authorization, Non-Contravention, etc..........................69
7.3. No Default.........................................................69
7.4. Government Approval, Regulation, etc...............................70
7.5. Validity, etc......................................................70
7.6. Financial Information..............................................70
7.7. No Material Adverse Effect.........................................70
7.8. Litigation, Labor Controversies, etc...............................70
7.9. Subsidiaries.......................................................71
7.10. Ownership of Properties............................................71
7.11. Taxes..............................................................71
7.12. Pension and Welfare Plans..........................................71
7.13. Environmental Warranties...........................................72
7.14. Outstanding Indebtedness...........................................72
7.15. Accuracy of Information............................................72
7.16. Patents, Trademarks, etc...........................................73
7.17. Margin Stock.......................................................73
ARTICLE VIII
COVENANTS
8.1. Affirmative Covenants..............................................74
8.1.1. Financial Information, Reports, Notices, etc.......................74
8.1.2. Compliance with Laws, etc..........................................76
8.1.3. Maintenance of Properties..........................................76
8.1.4. Insurance..........................................................76
8.1.5. Books and Records..................................................77
8.1.6. Environmental Covenant.............................................77
8.1.7. Use of Proceeds....................................................78
8.1.8. Pari Passu.........................................................78
8.1.9. Guarantee or Suretyship............................................78
8.1.10. Additional Guaranty................................................78
8.1.11. Intra-Group Agreement, etc.........................................79
8.2. Negative Covenants.................................................79
8.2.1. Restriction on Incurrence of Indebtedness..........................79
8.2.2. Restriction on Incurrence of Liens.................................80
8.2.3. Financial Condition................................................81
8.2.4. Dividends..........................................................82
8.2.5. Consolidation, Merger, Asset Acquisitions, etc.....................82
8.2.6. Transactions with Affiliates.......................................84
8.2.7. Limitations on Margin Stock Acquisitions...........................85
8.2.8. Limitation on Sale of Trade Accounts Receivable....................85
8.2.9. Sale of Assets.....................................................85
8.2.10. Limitation on Businesses...........................................87
ARTICLE IX
EVENTS OF DEFAULT
9.1. Listing of Events of Default.......................................87
9.1.1. Non-Payment of Obligations.........................................87
9.1.2. Breach of Warranty.................................................87
9.1.3. Non-Performance of Certain Covenants and Obligations...............87
9.1.4. Non-Performance of Other Covenants and Obligations.................87
9.1.5. Default on Indebtedness............................................87
9.1.6. Judgments..........................................................88
9.1.7. Pension Plans......................................................88
9.1.8. Ownership; Board of Directors......................................88
9.1.9. Bankruptcy, Insolvency, etc........................................89
9.1.10. Guaranties.........................................................89
9.2. Action if Bankruptcy...............................................90
9.3. Action if Other Event of Default...................................90
9.4. Action by Terminating Lender.......................................90
9.5. Cash Collateral....................................................90
ARTICLE X
THE ADMINISTRATIVE AGENT AND
DOCUMENTATION AGENT
10.1. Authorization and Actions..........................................91
10.2. Funding Reliance, etc..............................................91
10.3. Exculpation........................................................92
10.4. Successor..........................................................92
10.5. Credit Extensions by NationsBank and Scotiabank....................93
10.6. Credit Decisions...................................................93
10.7. Copies, etc........................................................93
10.8. Reporting of Non-Rata Credit Extensions............................93
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Waivers, Amendments, etc...........................................94
11.2. Notices............................................................95
11.3. Payment of Costs and Expenses......................................95
11.4. Indemnification....................................................96
11.5. Survival...........................................................97
11.6. Severability.......................................................97
11.7. Headings...........................................................97
11.8. Execution in Counterparts, Effectiveness; Entire Agreement.........97
11.9. Governing Law; Submission to Jurisdiction..........................97
11.10. Successors and Assigns.............................................99
11.11. Assignments and Transfers of Interests.............................99
11.11.1. Assignments........................................................99
11.11.2. Participations....................................................100
11.12. Other Transactions................................................101
11.13. Further Assurances................................................101
11.14. Waiver of Jury Trial..............................................101
11.15. Confidentiality...................................................101
11.16. Release of Subsidiary Guarantors and Supplemental Borrowers.......102
11.17. Collateral........................................................103
Schedule I - Disclosure Schedule
- Item 7.8
- Item 7.9
- Item 7.11
- Item 7.12
- Item 7.14
- Item 8.2.1(a)(ii)
- Item 8.2.2(a)
- Annex A
Schedule II - Lending Offices
Exhibit A-1 - Form of Revolving Note
Exhibit A-2 - Form of Bid Rate Note
Exhibit A-3 - Form of Non-Rata Revolving Note
Exhibit B - Form of Borrowing Request
Exhibit C - Form of Issuance Request
Exhibit D - Form of Continuation/Conversion Notice
Exhibit E - Form of Compliance Certificate
Exhibit F - Form of Effective Date Certificate
Exhibit G-1 - Form of Coordination Center Guaranty
Exhibit G-2 - Form of Intra-Group Agreement
Exhibit H - Form of Micro Guaranty
Exhibit I-1 - Form of Micro Canada Guaranty (Coordination Center/Micro
Singapore)
Exhibit I-2 - Form of Micro Canada Guaranty (Micro)
Exhibit I-3 - Form of Micro Singapore Guaranty
Exhibit J - Form of Additional Guaranty
Exhibit K - Form of Lender Assignment Agreement
Exhibit L - Form of Quarterly Report
Exhibit M - Form of Opinion of the General Counsel of Micro
Exhibit N - Form of Opinion of Davis Polk & Wardwell, Special counsel to
Micro
Exhibit O - Form of Opinion of Special Belgian counsel to Coordination
Center
Exhibit P - Form of Opinion of Special Canadian counsel to Micro Canada
Exhibit Q - Form of Opinion of Special Singapore counsel to Micro
Singapore
Exhibit R - Form of Opinion of counsel to the Agents
Exhibit S - Form of Commitment Extension Request
Exhibit T - Form of Accession Request and Acknowledgment
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 30, 1996, among INGRAM MICRO
INC., a Delaware corporation ("Micro"), INGRAM EUROPEAN COORDINATION CENTER
N.V., a company organized and existing under the laws of The Kingdom of
Belgium ("Coordination Center"), INGRAM MICRO SINGAPORE PTE LTD., a
corporation organized and existing under the laws of Singapore ("Micro
Singapore"), INGRAM MICRO INC., a corporation organized and existing under
the laws of Ontario, Canada ("Micro Canada", and, collectively with
Coordination Center and Micro Singapore, the "Supplemental Borrowers"), the
financial institutions parties hereto (together with their respective
successors and permitted assigns and any branch or affiliate of a financial
institution funding a Loan as permitted by Section 5.6, collectively, the
"Lenders"), NATIONSBANK OF TEXAS, N.A. ("NationsBank"), as administrative
agent for the Lenders (in such capacity, the "Administrative Agent"), THE
BANK OF NOVA SCOTIA ("Scotiabank"), as documentation agent for the Lenders
(in such capacity, the "Documentation Agent" and, collectively with the
Administrative Agent, the "Agents"), and THE CHASE MANHATTAN BANK, DG BANK
DEUTSCHE GENOSSENSCHAFTSBANK, CAYMAN ISLANDS BRANCH, THE FIRST NATIONAL BANK
OF CHICAGO, THE INDUSTRIAL BANK OF JAPAN, LIMITED, ATLANTA AGENCY, and
ROYAL BANK OF CANADA, as co-agents (collectively in such capacity, the
"Co-Agents").
WHEREAS, Micro and its Subsidiaries (such capitalized term and all other
capitalized terms used herein having the meanings provided in Section 1.1) are
engaged primarily in the business of the wholesale distribution of
microcomputer software and hardware products, multimedia products, customer
financing, assembly and configuration and other related wholesaling,
distribution and service activities; and
WHEREAS, Micro wishes to obtain:
(a) for itself Commitments from all the Lenders for Pro-Rata
Credit Extensions to be made prior to the Commitment Termination Date in
an aggregate amount in Dollars not to exceed the Total Credit Commitment
Amount at any one time outstanding, such Credit Extensions being
available on a committed basis as
(i) Pro-Rata Revolving Loans, and
(ii) Pro-Rata Letters of Credit in an aggregate amount at
any time issued and outstanding not to exceed $250,000,000;
(b) for itself and each other Borrower a protocol whereby each
such Borrower may, prior to the Commitment Termination Date and to the
extent the aggregate Commitments shall be unused and available from time
to time, request that any Lender make Non-Rata Revolving Loans and issue
Non-Rata Letters of Credit in any Available Currency, subject to a limit
on all Outstanding Credit Extensions consisting of Non-Rata Credit
Extensions of $750,000,000 in the aggregate; and
(c) for itself and each other Borrower a protocol whereby each
such Borrower may, prior to the Commitment Termination Date and to the
extent the aggregate Commitments shall be unused and available from time
to time, request that the Lenders make Bid Rate Loans, subject to a
limit on all Outstanding Credit Extensions consisting of Non-Rata Credit
Extensions of $750,000,000 in the aggregate; and
WHEREAS, each Borrower is willing to guarantee all Obligations of each
other Borrower on a joint and several basis; and
WHEREAS, the Lenders are willing, pursuant to and in accordance with the
terms of this Agreement:
(a) to extend severally Commitments to make, from time to time
prior to the Commitment Termination Date, Pro-Rata Credit Extensions in
an aggregate amount at any time outstanding not to exceed the excess of
the Total Credit Commitment Amount over the then Outstanding Credit
Extensions;
(b) to consider from time to time prior to the Commitment
Termination Date, in each Lender's sole and absolute discretion and
without commitment, making Non-Rata Revolving Loans and issuing Non-Rata
Letters of Credit in an aggregate principal amount not to exceed the
excess of the Total Credit Commitment Amount over the then Outstanding
Credit Extensions, subject to a limit on all Outstanding Credit
Extensions consisting of Non-Rata Credit Extensions of $750,000,000 in
the aggregate; and
(c) to consider quoting bids to make from time to time prior to
the Commitment Termination Date, in each Lender's sole and absolute
discretion and without commitment, Bid Rate Loans in an aggregate
principal amount not to exceed the excess of the Total Credit Commitment
Amount over the then Outstanding Credit Extensions, subject to a limit
on all Outstanding Credit Extensions consisting of Non-Rata Credit
Extensions of $750,000,000 in the aggregate; and
WHEREAS, the proceeds of the initial Credit Extensions will be used
through repayment of intercompany advances to refinance all amounts
outstanding under the Existing Industries Credit Agreement, and to repay other
Indebtedness required to be repaid and to make other payments required to be
made, in each case in connection with the consummation of the transactions
referred to in Section 6.1.12, and the proceeds of all subsequent Credit
Extensions will be used for general corporate purposes (including, working
capital, Acquisitions (so long as such Borrower has complied with Section
8.1.7), and liquidity support for commercial paper borrowings) of each
Borrower and its Subsidiaries;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not in
bold type) when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular
and plural forms thereof):
"Absolute Interest Rate" is defined in Section 3.5.3.
"Absolute Interest Rate Auction" means a solicitation of Quotes setting
forth Absolute Interest Rates pursuant to Section 3.5.3.
"Absolute Interest Rate Loans" means Bid Rate Loans, the interest rate
on which is determined on the basis of Absolute Interest Rates pursuant to an
Absolute Interest Rate Auction.
"Acceding Borrower" is defined in Section 6.3.
"Accession Request and Acknowledgment" means a request for accession
duly completed and executed by an Authorized Person of the applicable Acceding
Borrower and acknowledged by an Authorized Person of each Guarantor,
substantially in the form of Exhibit T hereto.
"Acquisition" shall mean any transaction, or any series of related
transactions, by which Micro and/or any of its Subsidiaries directly or
indirectly (a) acquires any ongoing business or all or substantially all of
the assets of any Person or division thereof, whether through purchase of
assets, merger or otherwise, (b) acquires (in one transaction or as the most
recent transaction in a series of transactions) control of at least a majority
in ordinary voting power of the securities of a Person which have ordinary
voting power for the election of directors or (c) otherwise acquires control
of a more than 50% ownership interest in any such Person.
"Additional Guarantor" means each other Subsidiary of Micro as shall
from time to time become a Guarantor in accordance with Section 8.1.10.
"Additional Guaranty" is defined in Section 8.1.10. and means a
guaranty, in the form of Exhibit J attached hereto, duly executed and
delivered by an Authorized Person of each Additional Guarantor, as amended,
supplemented, restated or otherwise modified from time to time.
"Additional Permitted Liens" means, as of any date, Liens securing
Indebtedness and not described in clauses (a) through (l) of Section 8.2.2,
but only to the extent that the sum (without duplication) of (a) the Amount of
Additional Liens on such date plus (b) the Total Indebtedness of Subsidiaries
(other than any Subsidiary that is a Guarantor) on such date does not exceed
fifteen percent (15%) of Consolidated Tangible Net Worth on such date.
"Administrative Agent" is defined in the preamble and includes each
other Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to Section 10.4.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power:
(a) to vote, in the case of any Lender Party, ten percent (10%)
or more or, in the case of any other Person, thirty-five percent (35%)
or more, of the securities (on a fully diluted basis) having ordinary
voting power, for the election of directors or managing general
partners; or
(b) in the case of any Lender Party or any other Person, to
direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.
"Affiliate Transaction" is defined in Section 8.2.6.
"Agents" is defined in the preamble.
"Agreement" means this Credit Agreement, as amended, supplemented,
restated or otherwise modified from time to time in accordance with its terms.
"Amount of Additional Liens" means, at any date, the aggregate principal
amount of Indebtedness secured by Additional Permitted Liens on such date.
"Applicable Margin" means, for any LIBO Rate Loan or Pro-Rata Letter of
Credit (i) for any day during the period from and including the Effective
Date, through and including the date the Administrative Agent shall receive
the reports and financial statements of Micro and its Consolidated
Subsidiaries required to be delivered pursuant to Section 8.1.1(a) hereof
(together with the Compliance Certificate required to be delivered
contemporaneously therewith pursuant to Section 8.1.1(d) hereof) for the
Fiscal Year ending on the Saturday nearest December 31, 1996, .250 of 1% per
annum and (ii) for any day subsequent to the date the Administrative Agent
shall receive the reports, financial statements and Compliance Certificate
described in the preceding clause (i), the corresponding rate per annum set
forth in the table below, determined by reference to: (a) the lower of the
two highest ratings from time to time assigned to Micro's long-term senior
unsecured debt by S&P, Moody's and Fitch and either published or otherwise
evidenced in writing by the applicable rating agency and made available to the
Administrative Agent (including both "express" and "indicative" or "implied"
(or equivalent) ratings) or (b) the ratio (calculated pursuant to clause (c)
of Section 8.2.3) of Consolidated Funded Debt to Consolidated EBITDA for the
Fiscal Period most recently ended prior to such day, for which financial
statements and reports have been received by the Administrative Agent pursuant
to Section 8.1.1(a) or (b), whichever results in the lower Applicable Margin:
Micro's Long-Term Senior
Unsecured Debt Ratings Ratio of Consolidated LIBO Rate
by S&P, Moody's and Funded Debt to Loan Applicable
Fitch, respectively Consolidated EBITDA Margin
_________________________ _____________________ _______________
A-, A3 or A- (or higher) Less than 1.5 .160%
BBB+, Baa1 or BBB+ Greater than or equal to 1.5, but less than 2.0. .215%
BBB, Baa2 or BBB Greater than or equal to 2.0, but less than 2.5. .250%
BBB-, Baa3 or BBB- Greater than or equal to 2.5, but less than 3.0. .275%
BB+, Ba1 or BB+ Greater than or equal to 3.0, but less than 3.25. .400%
Lower than BB+, Ba1 or BB+ Greater than or equal to 3.25. .625%
Any change in the Applicable Margin pursuant to clause (ii)(a) above, will be
effective as of the day subsequent to the date on which S&P, Moody's or Fitch,
as the case may be, releases the applicable change in its rating of Micro's
long-term senior unsecured debt.
"Authorized Person" means those officers or employees of each Obligor
whose signatures and incumbency shall have been certified to the
Administrative Agent pursuant to Section 6.1.1.
"Available Credit Commitment" means, relative to any Lender at any time,
the excess of such Lender's Percentage multiplied by the then Total Credit
Commitment Amount over such Lender's then Outstanding Credit Extensions (it
being understood that no reduction shall be made for any Non-Rata Credit
Extension).
"Available Currency" means for the purposes of any Non-Rata Revolving
Loans and Non-Rata Letters of Credit, Dollars, Canadian Dollars, Singapore
Dollars, Hong Kong Dollars, Swiss Francs, Belgian Francs, French Francs,
Guilders, Sterling, Marks, Lira, Mexican Pesos, Pesetas, Yen, Krona, Danish
Krone, Norwegian Krone, Schillings, Ringgit, Won, European Currency Units and
other mutually agreed currencies.
"Belgian Francs" means the lawful currency of The Kingdom of Belgium.
"Bid Rate Borrowing" has the meaning set forth in Section 3.5.2.
"Bid Rate Loan" means a loan made to a Borrower under Section 3.5.
"Bid Rate Note" means a promissory note of a Borrower payable to a
Lender, in the Form of Exhibit A-2 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of such Borrower to such Lender resulting from Bid Rate
Loans, and also means all other promissory notes accepted from time to time in
substitution therefor or as a renewal thereof.
"Board Representation Agreement" means the Board Representation
Agreement delivered to the Administrative Agent pursuant to Section 6.1.1(c),
among Micro and the "Family Stockholders" (as defined therein) listed on the
signature pages thereof, as in effect on the date so delivered without giving
effect to any amendment, waiver, supplement or modification thereafter, except
for any such amendment, waiver, supplement or modification that does not
materially alter the terms thereof (excluding from such exception however, any
such amendment, waiver, supplement or modification that in any way expands the
scope of or materially affects the definition of "Family Stockholders" set
forth therein).
"Borrowers" means, collectively, Micro and the Supplemental Borrowers
party to this Agreement from time to time, together with their respective
successors and assigns.
"Borrower's Account" means such account maintained by a Borrower for
purposes of Section 3.5.5, as such Borrower may notify the Lenders from time
to time.
"Borrowing" means the Pro-Rata Revolving Loans of the same Type and, in
the case of any LIBO Rate Loan, having the same Interest Period, made by all
Lenders on the same Business Day and pursuant to the same Borrowing Request in
accordance with Section 2.1.
"Borrowing Request" means a loan request and certificate for Pro-Rata
Revolving Loans duly completed and executed by an Authorized Person of Micro,
substantially in the form of Exhibit B hereto.
"Business Day" means:
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York City or Dallas, Texas;
(b) relative to the making of any payment in respect of any
Credit Extension denominated in an Available Currency other than
Dollars, any day on which dealings in such Available Currency are
carried on in the relevant local money market;
(c) relative to the making, continuing, prepaying or repaying of
any LIBO Rate Loans, any day which is a Business Day described in clause
(a) above and which is also a day on which dealings in Dollars are
carried on in the London interbank eurodollar market; and
(d) with respect to any payment, notice or other event relating
to any Non-Rata Credit Extension, any day on which banks are open for
business in the location of the lending office of the Lender making such
Non-Rata Credit Extension available.
"Canadian Dollars" means lawful currency of Canada.
"Capitalized Lease Liabilities" of any Person means, at any time, any
obligation of such Person at such time to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) real and/or personal
property, which obligation is, or in accordance with GAAP (including FASB
Statement 13) is required to be, classified and accounted for as a capital
lease on a balance sheet of such Person at the time incurred; and for purposes
of this Agreement the amount of such obligation shall be the capitalized
amount thereof determined in accordance with such FASB Statement 13.
"Co-Agents" is defined in the preamble.
"Code" means the Internal Revenue Code of 1986, as amended and as in
effect from time to time, and any rules and regulations promulgated thereunder.
"Commitment" means, relative to each Lender, its obligation under
clause (a) of Section 2.1 to make Pro-Rata Revolving Loans and under clause
(b) of Section 2.1 to participate in Pro-Rata Letters of Credit and
drawings thereunder.
"Commitment Extension Request" means a request for the extension of the
Commitment Termination Date duly executed by an Authorized Person of Micro,
substantially in the form of Exhibit S attached hereto.
"Commitment Termination Date" means the fifth anniversary of the date
hereof, or the earlier date of termination in whole of the Commitments
pursuant to Section 2.3, 9.2 or 9.3.
"Compliance Certificate" means a report duly completed, with
substantially the same information as set forth in Exhibit E attached hereto,
as such Exhibit E may be amended, supplemented, restated or otherwise modified
from time to time.
"consolidated", "consolidating" and any derivative thereof each means,
with reference to the accounts or financial reports of any Person, the
consolidated accounts or financial reports of such Person and each Subsidiary
of such Person determined in accordance with GAAP, including principles of
consolidation, consistent with those applied in the preparation of the
consolidated financial statements of Micro referred to in Section 7.6.
"Consolidated Assets" means, at any date, the total assets of Micro and
its Consolidated Subsidiaries as at such date in accordance with GAAP.
"Consolidated Current Assets" means, at any date, all amounts which
would be included as current assets on a consolidated balance sheet of Micro
and its Consolidated Subsidiaries as at such date in accordance with GAAP.
"Consolidated Current Liabilities" means, at any date, all amounts which
would be included as current liabilities on a consolidated balance sheet of
Micro and its Consolidated Subsidiaries as at such date in accordance with
GAAP, excluding any such current liabilities constituting Current Maturities
of Funded Debt at such date.
"Consolidated Current Ratio" means, at any date, the ratio of:
(a) Consolidated Current Assets as at such date, to
(b) Consolidated Current Liabilities as at such date.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
adjusted by adding thereto the amount of Consolidated Interest Charges that
were deducted in arriving at Consolidated Net Income for such period and all
amortization of intangibles, taxes, depreciation and any other non-cash
charges that were deducted in arriving at Consolidated Net Income for such
period.
"Consolidated Funded Debt" means, as of any date of determination, the
total of all Funded Debt of Micro and its Consolidated Subsidiaries
outstanding on such date, after eliminating all offsetting debits and credits
between Micro and its Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial
statements of Micro and its Subsidiaries in accordance with GAAP.
"Consolidated Interest Charges" means, with respect to any period, the
sum (without duplication) of the following (in each case, eliminating all
offsetting debits and credits between Micro and its Subsidiaries and all other
items required to be eliminated in the course of the preparation of
consolidated financial statements of Micro and its Subsidiaries in accordance
with GAAP):
(a) aggregate net interest expense in respect of Indebtedness of
Micro and its Subsidiaries (including imputed interest on Capitalized
Lease Liabilities) deducted in determining Consolidated Net Income for
such period plus, to the extent not deducted in determining Consolidated
Net Income for such period, the amount of all interest previously
capitalized or deferred that was amortized during such period, and
(b) all debt discount and expense amortized or required to be
amortized in the determination of Consolidated Net Income for such
period, and
(c) all attributable interest and fees in lieu of interest
associated with any securitizations by Micro or any of its Subsidiaries.
"Consolidated Liabilities" means, at any date, the sum of all
obligations of Micro and its Consolidated Subsidiaries as at such date in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the consolidated net
income of Micro and its Consolidated Subsidiaries as reflected on a statement
of income of Micro and its Consolidated Subsidiaries for such period in
accordance with GAAP.
"Consolidated Retained Receivables" means, at any date, the face amount
(calculated in Dollars but net of any amount allocated to the relevant Trade
Account Receivable with respect to any reserve or similar allowance for
doubtful payment) of all Trade Accounts Receivable of Micro and its
Consolidated Subsidiaries outstanding as at such date (including, in the case
of any receivables that have been sold, assigned or otherwise transferred to a
trust, the amount of such receivables net of any amount of Consolidated
Transferred Receivables determined with respect thereto, it being agreed for
the avoidance of doubt that Consolidated Retained Receivables shall not
include any Consolidated Transferred Receivables).
"Consolidated Stockholders' Equity" means, at any date:
(a) Consolidated Assets as at such date, less
(b) Consolidated Liabilities as at such date.
"Consolidated Subsidiary" means any Subsidiary whose financial
statements are required in accordance with GAAP to be consolidated with the
consolidated financial statements delivered by Micro from time to time in
accordance with Section 8.1.1.
"Consolidated Tangible Net Worth" means, at any date:
(a) Consolidated Stockholders' Equity as at such date plus the
accumulated after-tax amount of non-cash charges and adjustments to
income and Consolidated Stockholders' Equity attributable to employee
stock options and stock purchases through such date, less
(b) goodwill and other Intangible Assets of Micro and its
Consolidated Subsidiaries.
"Consolidated Transferred Receivables" means, at any date, the face
amount (calculated in Dollars but net of any amount allocated by Micro or any
of its Consolidated Subsidiaries to the relevant Trade Account Receivable with
respect to any reserve or similar allowance for doubtful payment) of all Trade
Accounts Receivable originally payable to the account of Micro or any of its
Consolidated Subsidiaries, which have not been discharged at such date and in
respect of which Micro's or any such Consolidated Subsidiary's rights and
interests, have, on or prior to such date, been sold, assigned or otherwise
transferred, in whole or in part, to any Person other than Micro or any of its
Consolidated Subsidiaries (either directly or by way of such Person holding an
undivided interest in a specified amount of Trade Accounts Receivable sold,
assigned or otherwise transferred to a trust).
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is
contingently liable (by direct or indirect agreement, contingent or otherwise)
to provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
person, if the primary purpose or intent thereof by the Person incurring the
Contingent Liability is to provide assurance to the obligee of such obligation
of another Person that such obligation of such other Person will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected (in whole or in part)
against loss in respect thereof. The amount of any Person's obligation under
any Contingent Liability shall (subject to any limitation set forth therein)
be deemed to be the outstanding principal amount of the debt, obligation or
other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate for Pro-Rata Revolving Loans duly completed and
executed by an Authorized Person of Micro, substantially in the form of
Exhibit D attached hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with Micro,
are treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"Coordination Center" is defined in the preamble.
"Coordination Center Guaranty" means a guaranty, in the form of Exhibit
G-1 attached hereto, duly executed and delivered by an Authorized Person of
Coordination Center, as amended, supplemented, restated or otherwise modified
from time to time.
"Credit Commitment Amount" means, relative to any Lender at any time,
such Lender's Percentage multiplied by the then Total Credit Commitment Amount
as in effect at such time.
"Credit Extension" means, as the context may require,
(a) any Pro-Rata Credit Extension; or
(b) the making of a Non-Rata Credit Extension by the relevant
Lender.
"Credit Extension Request" means, as the context may require, a
Borrowing Request, a Continuation/Conversion Notice or an Issuance Request.
"Current Maturities of Funded Debt" means, at any time and with respect
to any item of Funded Debt, the portion of such Funded Debt outstanding at
such time which by the terms of such Funded Debt or the terms of any
instrument or agreement relating thereto is due on demand or within one year
from such time (whether by sinking fund, other required prepayment or final
payment at maturity) and is not directly or indirectly renewable, extendible
or refundable at the option of the obligor under an agreement or firm
commitment in effect at such time to a date one year or more from such time.
"Danish Krone" means the lawful currency of Denmark.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.
"Disbursement Date" is defined in Section 3.2.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as the same may be amended, supplemented or otherwise modified
from time to time by Micro with the consent of the Administrative Agent and
the Required Lenders.
"Documentation Agent" is defined in the preamble and includes each other
Person as shall have subsequently been appointed as the successor
Documentation Agent pursuant to Section 10.4.
"Dollar" and the sign "$" each mean the lawful currency of the United
States.
"Dollar Amount" means, at any date:
(a) with respect to an amount denominated in Dollars, such
amount as at such date; and
(b) with respect to an amount denominated in any other Available
Currency, the amount of Dollars into which such Available Currency is
convertible into Dollars, as at such date and on the terms herein
provided.
"Effective Date" is defined in Section 11.8.
"Effective Date Certificate" means a certificate duly completed and
executed by an Authorized Person of Micro, substantially in the form of
Exhibit F hereto.
"Eligible Assignee" means (i) a commercial bank organized under the laws
of the United States, or any State thereof; (ii) a commercial bank organized
under the laws of any other country that is a member of the Organization for
Economic Cooperation and Development or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any such country,
provided that such bank is acting through a branch or agency located in the
United States; (iii) the central bank of any country that is a member of the
Organization for Economic Cooperation and Development; (iv) any Lender; or (v)
solely during the occurrence and continuance of a Default, a finance company,
insurance company or other financial institution or fund (whether a
corporation, partnership or other entity) engaged generally in making,
purchasing and otherwise investing in commercial loans in the ordinary course
of its business; provided, however, that (A) any Person described in clause
(i), (ii) or (iii) above shall also (x) have outstanding unsecured
indebtedness that is rated A- or better by S&P, A3 or better by Moody's or
A- or better by Fitch (or an equivalent rating by another nationally
recognized credit rating agency of similar standing if such corporations
are no longer in the business of rating unsecured indebtedness of entities
engaged in such businesses), (y) have combined capital and surplus (as
established in its most recent report of condition to its primary
regulator) of not less than $250,000,000 (or its equivalent in foreign
currency) and (z) be reasonably acceptable to the Administrative Agent and,
so long as no Default shall have occurred and be continuing, Micro, (B) any
Person described in clause (v) above shall (x) have combined capital and
surplus (as established in its most recent report of condition to its
primary regulator) of not less than $250,000,000 (or its equivalent in
foreign currency) and (y) be reasonably acceptable to the Administrative
Agent and Micro and (C) any Person described in clause (ii), (iii) or (v)
above shall, on the date on which it is to become a Lender hereunder, be
entitled to receive payments hereunder without deduction or withholding of
any United States Federal income taxes.
"Entertainment" means Ingram Entertainment Inc., a Tennessee
corporation.
"Environmental Laws" means any and all applicable statutes, laws,
ordinances, codes, rules, regulations and binding and enforceable guidelines
(including consent decrees and administrative orders binding on any Obligor or
any of their respective Subsidiaries), in each case as now or hereafter in
effect, relating to human health and safety, or the regulation or protection
of the environment, or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes into the indoor or outdoor environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes issued (presently or in
the future) by any Federal, state, or local authority in the United States or
any foreign jurisdiction in which any Obligor or any of their respective
Subsidiaries is conducting its business.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the rules
and regulations promulgated thereunder, in each case as in effect from time to
time. References to sections of ERISA also refer to any successor sections.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the F.R.S. Board, as in effect from time to time.
"European Currency Units" means the composite currency unit designated
as such by the European Community.
"Event of Default" is defined in Section 9.1.
"Excess Amount" is defined in clause (d) of Section 5.9.
"Existing Industries Credit Agreement" means the Amended and Restated
Credit Agreement, dated as of May 5, 1995, among the Borrowers (other than
Micro Singapore), Industries, Entertainment, Ingram Ohio Barge Co., Ingram
Micro Singapore Inc., the various financial institutions parties thereto, and
the co-agents, lead managers and European agent named therein, as amended.
"FASB" means the Financial Accounting Standards Board.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to:
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not
a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.
In the case of a day which is not a Business Day, the Federal Funds Rate for
such day shall be the Federal Funds Rate for the next preceding Business Day.
For purposes of this Agreement, any change in the Reference Rate due to a
change in the Federal Funds Rate shall be effective on the effective date of
such change in the Federal Funds Rate.
"Fee Letter" means that certain confidential letter, dated as of the
date hereof, among Scotiabank and NationsBank and Micro, relating to certain
fees to be paid in connection with this Agreement.
"Fiscal Period" means a fiscal period of Micro or any of its
Subsidiaries, which shall be either a calendar quarter or an aggregate period
comprised of three (3) consecutive periods of four (4) weeks and five (5)
weeks (or, on occasion, six (6) weeks instead of five), currently commencing
on or about each January 1, April 1, July 1 or October 1.
"Fiscal Year" means, with respect to any Person, the fiscal year of such
Person. The term Fiscal Year, when used without reference to any Person,
shall mean a Fiscal Year of Micro, which currently ends on the Saturday
nearest December 31.
"Fitch" means Fitch Investors Service, L.P.
"French Francs" means the lawful currency of France.
"F.R.S. Board" is defined in Section 7.17.
"Funded Debt" means, with respect to any Person, all Indebtedness of
such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option
of the obligor in respect thereto to a date one year or more (including,
without limitation, an option of such obligor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of one year or more) from, the date of the creation thereof, provided
that Funded Debt shall include, as at any date of determination, Current
Maturities of Funded Debt.
"GAAP" is defined in Section 1.4.
"Guarantee Letter of Credit Obligations" means any contingent legal
obligations of any Person to reimburse any financial institution for draws on
letters of credit (including those issued pursuant to this Agreement) issued
for the account of such Person to support or ensure payment or performance of
Indebtedness or obligations of some other Person provided no such draws have
been made and such obligation to reimburse is not then due and payable; it
being understood that no obligation with respect to any letter of credit
(including those issued pursuant to this Agreement) may be treated as both a
Reimbursement Obligation and a Guarantee Letter of Credit Obligation.
"Guaranties" means, collectively,
(a) the Micro Guaranty;
(b) the Coordination Center Guaranty;
(c) the Micro Canada Guaranty (Micro);
(d) the Micro Canada Guaranty (Coordination Center/Micro
Singapore);
(e) the Micro Singapore Guaranty; and
(f) each Additional Guaranty.
"Guarantors" means, collectively, the Borrowers and each Additional
Guarantor.
"Guilders" means the lawful currency of the Kingdom of the Netherlands.
"Hazardous Material" means:
(a) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance that presently or hereafter
becomes defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely
hazardous wastes", "restricted hazardous wastes", "toxic substances",
"toxic pollutants", "contaminants", "pollutants", or terms of similar
import within the meaning of any Environmental Law; or
(b) any other chemical or other material or substance, exposure
to which is presently or hereafter prohibited, limited or regulated
under any Environmental Law.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Article, Section, clause, paragraph or provision of this Agreement or such
other Loan Document.
"Hong Kong Dollars" means the lawful currency of Hong Kong.
"Impermissible Qualifications" means, relative to the opinion of
certification of any independent public accountant engaged by Micro as to any
financial statement of Micro and its Consolidated Subsidiaries, any
qualification or exception to such opinion or certification:
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause Micro to be in default of any of its obligations under
Section 8.2.3 or 8.2.8.
"including" and "include" mean including without limiting the generality
of any description preceding such term.
"Indebtedness" of any Person means and includes the sum of the following
(without duplication):
(a) all obligations of such Person for borrowed money, all
obligations evidenced by bonds, debentures, notes, investment repurchase
agreements or other similar instruments, and all securities issued by
such Person providing for mandatory payments of money, whether or not
contingent;
(b) all obligations of such Person pursuant to revolving credit
agreements or similar arrangements to the extent then outstanding;
(c) all obligations of such Person to pay the deferred purchase
price of property or services, except (i) trade accounts payable arising
in the ordinary course of business, (ii) other accounts payable arising
in the ordinary course of business in respect of such obligations the
payment of which has been deferred for a period of 270 days or less,
(iii) other accounts payable arising in the ordinary course of business
none of which shall be, individually, in excess of $200,000 and (iv)
leases of personal property not required to be capitalized under FASB
Statement 13;
(d) all obligations of such Person as lessee under Capitalized
Lease Liabilities;
(e) all obligations of such Person to purchase securities (or
other property) which arise out of or in connection with the sale of the
same or substantially similar securities or property excluding any such
sales or exchanges for a period of less than 45 days;
(f) all obligations with respect to letters of credit (other
than trade letters of credit) and bankers' acceptances issued for the
account of such Person;
(g) all Indebtedness of others secured by a Lien of any kind on
any asset of such Person, whether or not such Indebtedness is assumed by
such Person; provided, that the amount of any Indebtedness attributed
to any Person pursuant to this clause (g) shall be limited, in each
case, to the lesser of (i) the fair market value of the assets of such
Person subject to such Lien and (ii) the amount of the other Person's
Indebtedness secured by such Lien; and
(h) all guarantees, endorsements and other Contingent
Liabilities of or in respect of, or obligations to purchase or otherwise
acquire, the Indebtedness of another Person;
provided, however, that it is understood and agreed that the following are not
"Indebtedness":
(i) obligations to pay the deferred purchase price for the
acquisition of any business (whether by way of merger, sale of
stock or assets or otherwise) to the extent that such obligations
are contingent upon attaining performance criteria such as
earnings and such criteria shall not have been achieved;
(ii) obligations to repurchase securities (A) issued to
employees pursuant to any Plan or other contract or arrangement
relating to employment upon the termination of their employment or
other events, or (B) that may arise out of the transactions
contemplated by the Transition Agreements;
(iii) obligations to match contributions of employees under
any Plan; and
(iv) guarantees of any Obligor or any of their respective
Subsidiaries that are guarantees of performance, reclamation or
similar bonds or, in lieu of such bonds, letters of credit used
for such purposes issued in the ordinary course of business for
the benefit of any Subsidiary of Micro, which would not be included
on the consolidated financial statements of any Obligor.
"Indemnified Liabilities" is defined in Section 11.4.
"Indemnified Parties" is defined in Section 11.4.
"Industries" means Ingram Industries Inc., a Tennessee corporation.
"Ineligible Currency" means, with respect to any Non-Rata Revolving Loan
denominated in an Available Currency (other than Dollars), a determination by
the relevant Lender that the currency in which such Loan is denominated has
ceased to be (a) freely convertible into Dollars or (b) a currency for which
there is an active foreign exchange and deposit market in New York City.
"Intangible Assets" means, with respect to any Person, that portion of
the book value of the assets of such Person which would be treated as
intangibles under GAAP, including all items such as goodwill, trademarks,
trade names, brands, trade secrets, customer lists, copyrights, patents,
licenses, franchise conversion rights and rights with respect to any of the
foregoing and all unamortized debt or equity discount and expenses.
"Interest Period" means, for any LIBO Rate Loan, the period beginning on
(and including) the date on which such LIBO Rate Loan is made, continued or
converted and ending on (but excluding) the last day of the period selected by
Micro pursuant to the provisions below. The duration of each such Interest
Period shall be one, three or six months from (and including) the date of such
LIBO Rate Loan, ending on (but excluding) the day which numerically
corresponds to such date (or, if such month has no numerically corresponding
day, on the last Business Day of such month), as Micro may select in its
relevant notice pursuant to Section 3.1 or 4.2.3; provided, however, that
(a) Micro shall not be permitted to select Interest Periods for
LIBO Rate Loans to be in effect at any one time which have expiration
dates occurring on more than 20 different dates;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless, if such Interest Period applies to a
LIBO Rate Loan, such next following Business Day is the first Business
Day of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding day); and
(d) no Interest Period for any LIBO Rate Loan may end, with
respect to each Lender making a part of such Loan, later than the
Commitment Termination Date.
"Intra-Group Agreement" means the Intra-Group Agreement, in the form of
Exhibit G-2 hereto, duly executed and delivered by Authorized Persons of each
Borrower that is a Guarantor, as amended, supplemented, restated or otherwise
modified from time to time.
"Investment" means an increase since January 1, 1996 in Consolidated
Tangible Net Worth by at least $220,000,000 from (i) an initial public
offering by Micro; (ii) other equity offerings or issuances of capital stock;
(iii) the exercise of stock options on Micro stock held by present or former
employees of Micro, Industries or Entertainment (or any of their respective
Subsidiaries); (iv) an irrevocable contribution of cash to the capital of
Micro; or (v) a combination of the events described in clauses (i) through
(iv) above.
"Investment Prospectus" is defined in Section 6.1.11.
"Issuance Request" means an issuance request for Pro-Rata Letters of
Credit duly completed and executed by an Authorized Person of Micro,
substantially in the form of Exhibit C hereto.
"Issuer" means either NationsBank or Scotiabank, in its capacity as
issuer of the Pro-Rata Letters of Credit, or any Lender in its capacity as
issuer of a Non-Rata Letter of Credit. At the request of the Agents, another
Lender or an Affiliate of NationsBank or Scotiabank may issue one or more
Pro-Rata Letters of Credit hereunder.
"Krona" means the lawful currency of Sweden.
"Lenders" is defined in the preamble.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit K attached hereto.
"Lender Party" means any of the Lenders, Agents, Co-Agents or Issuers.
"Lending Office" means, relative to any LIBO Rate Loan of a Lender, the
LIBOR Office of such Lender designated as such below its signature hereto or
in a Lender Assignment Agreement or by notice to the Administrative Agent and
Micro from time to time and relative to any Non-Rata Credit Extension, the
office that such Lender shall designate.
"Letter of Credit Commitment Amount" means, on any date, a maximum
amount of $250,000,000, as such amount may be reduced from time to time
pursuant to Section 2.3.
"Letter of Credit Outstandings" means, on any date, the sum (without
duplication) of the Dollar Amounts of
(a) the then aggregate amount which is undrawn and available
under all Pro-Rata Letters of Credit issued and outstanding (assuming
that all conditions for drawing have been satisfied);
plus
(b) the then aggregate amount of all unpaid and outstanding
Pro-Rata Reimbursement Obligations.
"Letters of Credit" shall mean, collectively, all Pro-Rata Letters of
Credit issued and outstanding and Non-Rata Letters of Credit issued and
outstanding.
"LIBO Auction" means a solicitation of Quotes setting forth LIBO Margins
based on the LIBO Rate pursuant to Section 3.5.3.
"LIBO Margin" is defined in Section 3.5.3.
"LIBO Market Loan" means a Bid Rate Loan the interest rate on which is
determined on the basis of a LIBO Rate pursuant to a LIBO Auction.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the rate of interest equal to the average (rounded upwards, if necessary, to
the nearest 1/16 of 1% per annum) of the rates per annum at which Dollar
deposits in immediately available funds are offered to each Reference Lender's
LIBOR Office in the London interbank market at or about 11:00 a.m., London
time, two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of each such Reference Lender's LIBO Rate
Loan and for a period approximately equal to such Interest Period.
"LIBO Rate Loan" means a Pro-Rata Revolving Loan bearing interest, at
all times during the Interest Period applicable thereto, at a fixed rate of
interest determined by reference to the LIBO Rate.
"LIBOR Reserve Percentage" means, for any Lender, relative to any
Interest Period for LIBO Rate Loans, the reserve percentage (expressed as a
decimal) equal to the maximum aggregate reserve requirements (including all
basic, emergency, supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled changes in reserve
requirements) specified under regulations issued from time to time by the
F.R.S. Board and then applicable to assets or liabilities consisting of and
including Eurocurrency Liabilities having a term approximately equal or
comparable to such Interest Period.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against, valid claim on or interest in property to secure payment of a
debt or performance of an obligation or other priority or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
(a) the lien or retained security title of a conditional vendor, and (b) under
any agreement for the sale of Trade Accounts Receivable, the interest of the
purchaser (or any assignee of such purchaser which has financed the relevant
purchase) in a percentage of receivables of the seller not so sold, held by
the purchaser (or such assignee) as a reserve for (i) interest rate protection
in the event of a liquidation of the receivables sold, (ii) expenses that
would be incurred upon a liquidation of the receivables sold, (iii) losses
that might be incurred in the event the amount actually collected from the
receivables sold is less than the amount represented in the relevant
receivables purchase agreement as collectible, or (iv) any similar purpose
(but excluding the interest of a trust in such receivables to the extent that
the beneficiary of such trust is Micro or a Subsidiary of Micro).
"Lira" means the lawful currency of the Republic of Italy.
"Loan" means a Pro-Rata Revolving Loan or a Non-Rata Revolving Loan or
a Bid Rate Loan.
"Loan Document" means this Agreement, each Note, each Credit Extension
Request, each Letter of Credit, the Intra-Group Agreement, each Guaranty, the
most recently delivered Compliance Certificate (specifically excluding any
other Compliance Certificate previously delivered), any Accession Request and
Acknowledgment and any other agreement, document or instrument (excluding any
documents delivered solely for the purpose of satisfying disclosure
requirements or requests for information) required in connection with this
Agreement or the making or maintaining of any Credit Extension and delivered
by an Authorized Person.
"Margin Stock" means "margin stock", as such term is defined and used in
Regulation U.
"Marks" means the lawful currency of the Federal Republic of Germany.
"Material Adverse Effect" means an event, act, occurrence or other
circumstance which results in a material adverse effect on the business,
results of operations or financial condition of Micro and its Consolidated
Subsidiaries, taken as a whole.
"Material Asset Acquisition" is defined in Section 8.2.5(b).
"Material Subsidiary" means: (a) with respect to any Subsidiary of Micro
as of the date hereof, a Subsidiary of Micro that (as of any date of
determination), (i) on an average over the three (3) most recently preceding
Fiscal Years contributed at least five percent (5%) to Consolidated Net
Income, or (ii) on an average at the end of the three (3) most recently
preceding Fiscal Years owned assets constituting at least five percent (5%) of
Consolidated Assets; and (b) with respect to any Subsidiary of Micro organized
or acquired subsequent to the date hereof, a Subsidiary of Micro that as of
(i) the date it becomes a Subsidiary of Micro, would have owned (on a pro
forma basis if such Subsidiary had been a Subsidiary of Micro at the end of
the preceding Fiscal Year) assets constituting at least five percent (5%) of
Consolidated Assets at the end of the Fiscal Year immediately prior to the
Fiscal Year in which it is organized or acquired, or (ii) any date of
determination thereafter, (A) on an average over the three (3) most recently
preceding Fiscal Years (or, if less, since the date such Person became a
Subsidiary of Micro) contributed at least five percent (5%) to Consolidated
Net Income, or (B) on an average at the end of the three (3) (or, if less,
such number of Fiscal Year-ends as have occurred since such Person became a
Subsidiary of Micro) most recently preceding Fiscal Years owned assets
constituting at least five percent (5%) of Consolidated Assets; provided that
Ingram Funding Inc., Distribution Funding Corporation and any other special
purpose financing vehicle shall not be Material Subsidiaries.
"Maturity" of any Obligation means the earliest to occur of
(a) the date on which such Obligation expressly becomes due and
payable pursuant hereto or any other Loan Document or, in the case of
any Obligation incurred in respect of any Non-Rata Revolving Loan or Bid
Rate Loan, pursuant to the arrangements entered into by the relevant
Borrower and the relevant Lender in connection therewith but in no event
beyond the then Commitment Termination Date with respect to such Lender,
(b) the Stated Maturity Date (in the case of Pro-Rata Revolving
Loans) where no such due date is specified, and
(c) the date on which such Obligation becomes due and payable
pursuant to Section 9.2 or 9.3 or 9.4.
"Mexican Pesos" means the lawful currency of the United States of
Mexico.
"Micro" is defined in the preamble.
"Micro Canada" is defined in the preamble.
"Micro Canada Guaranty (Coordination Center/Micro Singapore)" means a
guaranty, in the form of Exhibit I-1 attached hereto, duly executed and
delivered by an Authorized Person of Micro Canada, as amended, supplemented,
restated or otherwise modified from time to time.
"Micro Canada Guaranty (Micro)" means a guaranty, in the form of Exhibit
I-2 attached hereto, duly executed and delivered by an Authorized Person of
Micro Canada, as amended, supplemented, restated or otherwise modified from
time to time.
"Micro Guaranty" means the Guaranty, in the form of Exhibit H attached
hereto, duly executed and delivered by an Authorized Person of Micro, as
amended, supplemented, restated or otherwise modified from time to time.
"Micro Singapore" is defined in the preamble.
"Micro Singapore Guaranty" means the Guaranty, in the form of Exhibit
I-3 attached hereto, duly executed and delivered by an Authorized Person of
Micro Singapore, as amended, supplemented, restated or otherwise modified from
time to time.
"Moody's" means Moody's Investors Service, Inc.
"NationsBank" is defined in the preamble.
"Non-Rata Credit Extension" means, collectively,
(a) the making of a Non-Rata Revolving Loan by any Lender;
(b) the issuance by any Lender of a Non-Rata Letter of Credit;
and
(c) the making of a Bid Rate Loan by any Lender.
"Non-Rata Disbursement Date" is defined in Section 3.4.5.
"Non-Rata Letter of Credit" is defined in Section 3.4.1.
"Non-Rata Reimbursement Obligations" is defined in Section 3.4.6.
"Non-Rata Revolving Loans" is defined in Section 3.3.1.
"Non-Rata Revolving Note" means a promissory note of a Borrower payable
to a Lender, in the form of Exhibit A-3 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of such Borrower to such Lender resulting from
outstanding Non-Rata Revolving Loans, and also means all other promissory
notes accepted from time to time in substitution therefor or renewal thereof.
"Norwegian Krone" means the lawful currency of Norway.
"Note" means, as the context may require, a Revolving Note, a Non-Rata
Revolving Note, a Bid Rate Note, or any promissory note of Coordination
Center that may be issued from time to time to evidence Non-Rata Revolving
Loans made by any Lender to Coordination Center.
"Obligations" means, individually and collectively: (a) the Loans; (b)
all Letter of Credit Outstandings and (c) all other indebtedness, liabilities,
obligations, covenants and duties of any Borrower owing to the Agents and/or
the Lenders of every kind, nature and description, under or in respect of this
Agreement or any of the other Loan Documents including, without limitation,
any fees, whether direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note.
"Obligors" means, collectively, the Borrowers and Guarantors.
"Organic Documents" means, relative to any Obligor, any governmental
filing or proclamation pursuant to which such Person shall have been created
and shall continue in existence (including a charter or certificate or
articles of incorporation or organization, and, with respect to Coordination
Center, the Royal Decree) and its by-laws (or, if applicable, partnership or
operating agreement) and all material shareholder agreements, voting trusts
and similar arrangements to which such Obligor is a party that are applicable
to the voting of any of its authorized shares of capital stock (or, if
applicable, other ownership interests therein).
"Outstanding Credit Extensions" means, relative to any Lender at any
date and without duplication, the sum of the Dollar Amounts of
(a) the aggregate principal amount of all outstanding Loans of
such Lender at such date,
plus
(b) such Lender's Percentage of the aggregate Stated Amount of
all Pro-Rata Letters of Credit which are outstanding and undrawn (or
drawn and unreimbursed) at such date,
plus
(c) the aggregate Stated Amount of all Non-Rata Letters of
Credit issued by such Lender which are outstanding and undrawn (or drawn
and unreimbursed) at such date.
"Participant" is defined in Section 11.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(3) of ERISA), and to which any
Obligor or any corporation, trade or business that is, along with Obligor, a
member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of section
4063 of ERISA at any time during the preceding five years, or by reason of
being deemed to be a contributing sponsor within the meaning of section 4069
of ERISA.
"Percentage" of any Lender means in the case of (a) each Lender which
is a signatory to this Agreement, the percentage set forth opposite such
Lender's signature hereto under the caption "Percentage", subject to any
modification necessary to give effect to any sale, assignment or transfer made
pursuant to Section 11.11.1, or (b) any Transferee Lender, effective upon the
occurrence of the relevant purchase by, or assignment to, such Transferee
Lender, the portion of the Percentage of the selling, assigning or
transferring Lender allocated to such Transferee Lender. With respect to any
Lender at any time, "Percentage" shall express the ratio of such Lender's then
Available Credit Commitments to the then aggregate Available Credit
Commitments of all the Lenders.
"Person" means any natural person, company, partnership, firm, limited
liability company or partnership, association, trust, government, governmental
agency or any other entity, whether acting in an individual, fiduciary or
other capacity.
"Pesetas" means the lawful currency of Spain.
"Plan" means any Pension Plan or Welfare Plan.
"Pro-Rata Credit Extension" means, collectively,
(a) the making of Pro-Rata Revolving Loans by the Lenders; and
(b) the issuance by any Issuer of a Pro-Rata Letter of Credit.
"Pro-Rata Distribution Event" is defined in clause (c) of Section 5.9.
"Pro-Rata Letter of Credit" means an irrevocable letter of credit issued
pursuant to Section 3.2.
"Pro-Rata Letter of Credit Commitment" means, with respect to any Issuer
of Pro-Rata Letters of Credit, such Issuer's obligations to issue Pro-Rata
Letters of Credit pursuant to Section 3.2 and, with respect to each of the
other Lenders, the obligations of each such Lender to participate in Pro-Rata
Letters of Credit pursuant to such Section.
"Pro-Rata Revolving Loans" is defined in clause (a) of Section 2.1.
"Pro-Rata Reimbursement Obligation" is defined in Section 3.2.3.
"Quarterly Payment Date" means the last day of March, June, September
and December of each calendar year or, if any such day is not a Business Day,
the next succeeding Business Day.
"Quarterly Report" means a report duly completed, substantially in the
form of Exhibit L attached hereto (including, in addition to the information
expressly described in Exhibit L hereto, information (including calculations
in accordance with the provisions of the last sentence of Section 2.1)
regarding the values of the Available Currencies (other than the Dollar) of
all Outstanding Credit Extensions consisting of Non-Rata Credit Extensions as
of the end of the applicable Fiscal Period), as such Exhibit L may be amended,
supplemented, restated or otherwise modified from time to time.
"Quote" means an offer in accordance with Section 3.5.3 by a Lender to
make a Bid Rate Loan with one single specified interest rate.
"Quote Request" has the meaning set forth in Section 3.5.2.
"Receiving Lender Party" is defined in clause (d) of Section 5.9.
"Reference Lenders" means Scotiabank, NationsBank, The First National
Bank of Chicago and The Chase Manhattan Bank.
"Reference Rate" means, on any date and with respect to all Reference
Rate Loans, a fluctuating rate of interest per annum equal to
(a) at all times other than the last five Business Days of each
calendar quarter, the rate of interest most recently announced or
established by NationsBank as its reference rate for Dollar loans; and
(b) during the last five Business Days of each calendar quarter,
the higher of (i) the rate set forth in the preceding clause (a) and
(ii) the Federal Funds Rate plus 1/2 of 1%.
The Reference Rate is not necessarily intended to be the lowest rate of
interest determined by NationsBank in connection with extensions of credit.
Changes in the rate of interest on that portion of any Pro-Rata Revolving
Loans maintained as Reference Rate Loans will take effect simultaneously with
each change in the Reference Rate. The Administrative Agent will give notice
promptly to Micro and the Lenders of changes in the Reference Rate.
"Reference Rate Loan" means a Pro-Rata Revolving Loan bearing interest
at a fluctuating rate of interest determined by reference to the Reference
Rate.
"Regulation U" is defined in Section 7.17.
"Regulatory Change" means any change after the date hereof in any (or
the promulgation after the date hereof of any new):
(a) law applicable to any class of banks (of which any Lender
Party is a member) issued by (i) any competent authority in any country
or jurisdiction, or (ii) any competent international or supra-national
authority; or
(b) regulation, interpretation, directive or request (whether or
not having the force of law) applicable to any class of banks (of which
any Lender Party is a member) of any court, central bank or governmental
authority or agency charged with the interpretation or administration of
any law referred to in clause (a) of this definition or of any fiscal,
monetary or other authority having jurisdiction over any Lender Party.
"Reimbursement Obligations" shall mean, collectively, all Pro-Rata
Reimbursement Obligations and Non-Rata Reimbursement Obligations.
"Release" means a "release", as such term is defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended and as in effect from time to time (42 United States Code Section
9601 et seq.), and any rules and regulations promulgated thereunder.
"Relevant Issuer" is defined in Section 8.2.7.
"Remaining Lender" is defined in clause (a) of Section 2.2.
"Replacement Notice" is defined in Section 5.12.
"Required Currency" is defined in Section 5.8.2.
"Required Lenders" means, at any time, Lenders having an aggregate
Percentage of at least 65%.
"Revolving Note" means a promissory note of Micro payable to a Lender,
in the form of Exhibit A-1 hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of Micro to such Lender resulting from outstanding Pro-Rata
Revolving Loans, and also means all other promissory notes accepted from time
to time in substitution therefor or renewal thereof.
"Ringgit" means the lawful currency of Malaysia.
"Royal Decree" means the Royal Decree of The Kingdom of Belgium
recognizing Coordination Center as a coordination center under Belgian law, as
the same may from time to time be amended, supplemented or otherwise modified
by any new Royal Decree relating to the recognition of the Coordination Center
as a coordination center under Belgium law.
"S&P" means Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies, Inc.
"Schillings" means the lawful currency of the Republic of Austria.
"Scotiabank" is defined in the preamble.
"Singapore Dollars" means the lawful currency of Singapore.
"Stated Amount" for any Letter of Credit on any day means the amount
which is undrawn and available under such Letter of Credit on such day (after
giving effect to any drawings thereon on such day).
"Stated Expiry Date" is defined in Section 3.2.
"Stated Maturity Date" means, for each Lender, in the case of any
Pro-Rata Revolving Loan, the then-effective Commitment Termination Date.
"Sterling" means the lawful currency of the United Kingdom of England
and Wales.
"Subject Lender" is defined in Section 5.12.
"Subsidiary" means, with respect to any Person, any corporation, company,
partnership or other entity of which more than fifty percent (50%) of the
outstanding shares or other ownership interests having by the terms thereof
ordinary voting power to elect a majority of the board of directors of, or
other persons performing similar functions for, such corporation, company,
partnership or other entity (irrespective of whether at the time shares or
other ownership interests of any other class or classes of such corporation,
company, partnership or other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person.
"Supplemental Borrowers" is defined in the preamble, and such term shall
include any Acceding Borrowers party to this Agreement from time to time,
together with their respective successors and assigns.
"Swiss Francs" means the lawful currency of Switzerland.
"Tax Credit" is defined in Section 5.7.
"Tax Payment" is defined in Section 5.7.
"Taxes" is defined in Section 5.7.
"Total Credit Commitment Amount" means, at any time, $1,000,000,000, as
such amount may be reduced from time to time pursuant to Section 2.3.
"Total Indebtedness" means, at any date, the aggregate of all
Indebtedness on such date of Micro and its Subsidiaries, without duplication
and after eliminating all offsetting debits and credits between Micro and its
Subsidiaries and all other items required to be eliminated in accordance with
GAAP.
"Total Indebtedness of Subsidiaries" means, at any date, the aggregate
of all Indebtedness on such date of all the Subsidiaries of Micro, without
duplication and after eliminating all offsetting debits and credits between
each of such Subsidiaries or between such a Subsidiary and Micro and all other
items required to be eliminated in accordance with GAAP, excluding (a) all
Indebtedness of any Subsidiary of Micro outstanding on the date hereof or
incurred pursuant to any commitment or line of credit in its favor in effect
on the date hereof, and any renewals or replacements thereof, so long as such
renewals or replacements do not increase the amount of such Indebtedness or
such commitments or lines of credit and (b) any Indebtedness of Ingram Funding
Inc., Distribution Funding Corporation or any other special purpose financing
vehicle incurred in connection with their purchase, directly or indirectly,
from Micro or any of Micro's other Subsidiaries, of Trade Accounts Receivable
or interests therein.
"Trade Accounts Receivable" means, with respect to any Person, all
rights of such Person to the payment of money arising out of any sale, lease
or other disposition of goods or rendition of services by such Person.
"Transferee Lender" is defined in Section 11.11.1.
"Transition Agreements" means those agreements and other instruments
entered into by Micro, Industries, Entertainment and certain other Persons on
or before the date hereof in connection with a series of related transactions
through which Micro and Entertainment cease to be Subsidiaries of Industries,
in each case as summarized in the annexes attached to the certificate referred
to in Section 6.1.12, each as in effect on the date hereof (or, if later, the
date the Investment is consummated), without giving effect to any amendment,
modification or supplement thereafter except for such amendments,
modifications or supplements after the date hereof, which, individually or
taken as whole, do not materially alter the terms of such Transition Agreement
or adversely affect Micro or any of its Subsidiaries.
"Type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Reference Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"Voting Stock" means, (a) with respect to a corporation, the stock of
such corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect members of the board of directors (or other
governing body) of such corporation, (b) with respect to any partnership, the
partnership interests in such partnership the owners of which are entitled to
manage the affairs of the partnership or vote in connection with the
management of the affairs of the partnership or the designation of another
Person as the Person entitled to manage the affairs of the partnership, and
(c) with respect to any limited liability company, the membership interests
in such limited liability company the owners of which are entitled to manage
the affairs of such limited liability company or entitled to elect managers of
such limited liability company (it being understood that, in the case of any
partnership or limited liability company, "shares" of Voting Stock shall refer
to the partnership interests or membership interests therein, as the case may
be).
"Welfare Plan" means a "welfare plan", as such term is defined in
section 3(1) of ERISA.
"Withdrawing Lender" is defined in clause (a) of Section 2.2.
"Won" means the lawful currency of the Republic of Korea.
"Yen" means the lawful currency of Japan.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and
in each Credit Extension Request, each other Loan Document, and each notice
and other communication delivered from time to time in connection with this
Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article, Section,
clause or definition are references to such clause or definition of this
Agreement or such other Loan Document, as the case may be, and, unless
otherwise specified, references in any Article, Section, clause or
definition to any section are references to such section of such Article,
Section, clause or definition.
SECTION 1.4. Accounting and Financial Determinations.
(a) Unless otherwise specified, all accounting terms used herein
or in any other Loan Document shall be interpreted, and all accounting
determinations and computations hereunder or thereunder (including under
Section 8.2.3) shall be made, in accordance with those U.S. generally
accepted accounting principles ("GAAP") as applied in the preparation of
the financial statements of Micro and its Consolidated Subsidiaries
delivered pursuant to clause (a) of Section 6.1.5; provided, however,
that the financial statements required to be delivered pursuant to
clauses (a) and (b) of Section 8.1.1 shall be prepared in accordance
with GAAP as in effect from time to time and the quarterly financial
statements required to be delivered pursuant to clause (b) of Section
8.1.1 are not required to contain footnote disclosures required by GAAP
and shall be subject to ordinary year-end adjustments.
(b) If, after the date hereof, there shall be any change to the
Borrower's Fiscal Year, or any modification in GAAP used in the
preparation of the financial statements delivered pursuant to clause (a)
of Section 6.1.5 (whether such modification is adopted or imposed by
FASB, the American Institute of Certified Public Accountants or any other
professional body) which changes result in a change in the method of
calculation of financial covenants, standards or terms found in this
Agreement, the parties hereto agree promptly to enter into negotiations
in order to amend such financial covenants, standards or terms so as to
reflect equitably such changes, with the desired result that the
evaluations of the Borrower's financial condition shall be the same
after such changes as if such changes had not been made; provided,
however, that until the parties hereto have reached a definitive
agreement on such amendments, the Borrower's financial condition shall
continue to be evaluated on the same principles as those used in the
preparation of the financial statements delivered pursuant to clause (a)
of Section 6.1.5.
SECTION 1.5. Calculations. Unless otherwise expressly stated to the
contrary in this Agreement or in any other Loan Document, all calculations
made for purposes of this Agreement, each other Loan Document and the
transactions contemplated hereby and thereby shall be made to two decimal
places.
ARTICLE II
COMMITMENTS, ETC.
SECTION 2.1. Commitments. On the terms and subject to the conditions
of this Agreement (including ARTICLE VI), each Lender severally agrees that it
will, from time to time on any Business Day occurring prior to the Commitment
Termination Date,
(a) make loans in Dollars ("Pro-Rata Revolving Loans") to Micro
equal to such Lender's Percentage of the aggregate amount of the
Borrowing to be made on such Business Day, all in accordance with
Section 3.1; provided, however, that no Lender shall be permitted or
required to make any Pro-Rata Revolving Loan if, after giving effect
thereto,
(i) such Lender's Outstanding Credit Extensions (excluding
for this calculation Non-Rata Credit Extensions) would exceed an
amount equal to such Lender's Percentage multiplied by the then
Total Credit Commitment Amount, or
(ii) the aggregate Outstanding Credit Extensions of all the
Lenders would exceed the then Total Credit Commitment Amount; and
(b) purchase participation interests in Dollars equal to its
Percentage in each Pro-Rata Letter of Credit issued upon the application
of Micro pursuant to Section 3.2; provided, however, that no Issuer
(with respect to Pro-Rata Letters of Credit) shall issue a Pro-Rata
Letter of Credit if, after giving effect thereto,
(i) the aggregate Letter of Credit Outstandings would
exceed the then Letter of Credit Commitment Amount, or
(ii) the aggregate Outstanding Credit Extensions of all the
Lenders would exceed the then Total Credit Commitment Amount.
All Pro-Rata Revolving Loans and Pro-Rata Letters of Credit (and drawings
thereunder) shall be denominated solely in, and repaid in, Dollars. On and
subject to the conditions hereof, Micro may from time to time borrow, prepay
and reborrow Pro-Rata Revolving Loans and may apply for, extinguish or
reimburse drawings made under and re-apply for Pro-Rata Letters of Credit.
For purposes of this Section 2.1 and Section 3.3.3, the Dollar Amount on any
date of Non-Rata Revolving Loans denominated in an Available Currency (other
than Dollars) shall be calculated based upon the spot rate at which Dollars
are offered on such day for such Available Currency which appears on Telerate
Page 3740 at approximately 11:00 a.m. (London time) (and if such spot rate is
not available on Telerate Page 3740 as of such time, such spot rate as quoted
by NationsBank, in London at approximately 11:00 a.m. (London time)).
SECTION 2.2. Extensions of the Commitment Termination Date.
(a) If the Commitment Termination Date has not occurred, Micro
may, on any Business Day occurring not earlier than May 1st, nor later
than June 30th of the year immediately preceding the year in which the
then-effective Commitment Termination Date occurs, deliver by registered
or certified mail, return receipt requested, or by overnight courier
service in the case of domestic deliveries (or the equivalent courier
service in the case of deliveries outside of the United States) in which
an acknowledgment of receipt of delivery is required from the recipient
thereof, to each Lender (with a copy thereof to the Administrative
Agent) three counterparts of a Commitment Extension Request
appropriately completed. Not later than July 31st of the year
immediately preceding the year in which the then-effective Commitment
Termination Date occurs, each Lender shall, by appropriately completing,
executing and delivering to Micro and the Administrative Agent the
Commitment Extension Request delivered to it, indicate whether or not it
intends to extend its Commitment pursuant to this Section 2.2. Any
Lender failing to return its Commitment Extension Request to Micro as
provided in the preceding sentence shall be deemed to have declined the
extension of its Commitments as contemplated by this Section 2.2. Not
later than August 15th of the year immediately preceding the year in
which the then-effective Commitment Termination Date occurs, the
Administrative Agent shall notify all of the Lenders as to the identity
of those Lenders that have indicated their intention not to extend their
respective Commitments (each a "Withdrawing Lender") and those Lenders
that have extended their Commitments (each a "Remaining Lender").
(b) In the event that, as of the date the Administrative Agent
delivers the notice provided for in the last sentence of paragraph (a)
above, (i) neither NationsBank nor Scotiabank shall be a Remaining
Lender and (ii) the Remaining Lenders shall hold, in the aggregate, less
than 75% of the Commitments, then from such date until a date not later
than August 31st of the year immediately preceding the year in which the
then-effective Commitment Termination Date occurs, each Remaining Lender
shall have the right to revoke (by delivering written notice thereof to
Micro and the Administrative Agent) its consent to such extension of its
Commitment provided pursuant to paragraph (a) of this Section (thereby
becoming a Withdrawing Lender hereunder as of the day of such
revocation). From and after the date the Administrative Agent delivers
the notice provided for in the last sentence of paragraph (a) of this
Section until a date not later than September 15th of the year
immediately preceding the year in which the then-effective Commitment
Termination Date occurs, the Remaining Lenders shall have the right to
assume the Commitments of any Withdrawing Lenders in proportion to their
respective share of the Commitments of such Remaining Lenders. If, as
of September 30th of the year immediately preceding the year in which
the then-effective Commitment Termination Date occurs, the Remaining
Lenders hold, in the aggregate, less than 75% of the Commitments (after
giving effect to any assumptions of the Commitments of Withdrawing
Lenders completed in accordance with the preceding sentence on or prior
to such date), the Commitments of all Lenders shall terminate and any
Outstanding Credit Extensions will mature and be payable in full on the
then-effective Commitment Termination Date.
(c) If, as of September 30th of the year immediately preceding
the year in which the then-effective Commitment Termination Date occurs,
the Remaining Lenders hold, in the aggregate, 75% or more of the
Commitments (after giving effect to any assumptions of the Commitments
of Withdrawing Lenders completed in accordance with the penultimate
sentence of paragraph (b) above on or prior to such date), the
Commitments of each Remaining Lender (including any Commitments assumed
by any Remaining Lender in accordance with the penultimate sentence of
paragraph (b) above) shall be extended for a period of one year (365
days or, if appropriate, 366 days) from the then-effective Commitment
Termination Date, subject to the satisfaction of the conditions
precedent to extension of the Commitments set forth in paragraph (f) of
this Section. In the event the requirements for extension of the
Commitments set forth in the preceding sentence shall be satisfied, from
and after October 1st of the year immediately preceding the year in
which the then-effective Commitment Termination Date occurs until a date
not later than 30 days prior to the then-effective Commitment
Termination Date, Micro may enter into an agreement with one or more new
financial institutions reasonably acceptable to the Agents or with any
Remaining Lender to assume the Commitments of the Withdrawing Lenders
which have not been assumed in accordance with the penultimate sentence
of paragraph (b) above. Any Commitments assumed by Remaining Lenders or
new financial institutions in accordance with the preceding sentence
shall be extended for a period of one year (365 days or, if appropriate,
366 days) from the then-effective Commitment Termination Date, subject
to the satisfaction of the conditions precedent to extension of the
Commitments set forth in paragraph (f) of this Section.
(d) In the event the Commitments are extended in accordance with
this Section, the Outstanding Credit Extensions made by any Withdrawing
Lender that are not assumed or purchased pursuant to paragraph (b) or
(c) of this Section will mature and be payable in full on the
then-effective Commitment Termination Date, and the Commitments of each
such Withdrawing Lender shall thereupon terminate. On the
then-effective Commitment Termination Date, the Total Credit Commitment
Amount will be automatically reduced by an amount equal to the product of
(i) the sum of the Percentages of all the Withdrawing
Lenders that were not assumed or purchased pursuant to paragraph
(b) or (c) of this Section, and
(ii) the Total Credit Commitment Amount on such Commitment
Termination Date immediately prior to such calculation.
The Percentages of the Remaining Lenders shall be adjusted by the
Administrative Agent based upon each such Remaining Lender's pro rata
share of the remaining Total Credit Commitment Amount.
(e) The decision of each Lender to extend its Commitments or
assume or purchase the Commitments of any Withdrawing Lender pursuant to
this Section 2.2 shall be exercised by it in its sole and absolute
discretion, including without reference to any or all of the stated
desires of any other Lender Party or Micro. All assignments made
pursuant to this Section 2.2 shall be made in accordance with Section
11.11.1, except that any such assignment may be in any minimum amount or
multiple thereof which results from the operation of this Section 2.2
and shall not require the consent of Micro or the Administrative Agent.
(f) Any extension of the Commitments in accordance with this
Section shall become effective only upon (i) the satisfaction of the
requirements for extension set forth herein and (ii) the delivery by
Micro to the Administrative Agent and each Lender, on or prior to the
then-effective Commitment Termination Date, of (A) executed replacement
Notes reflecting, without limitation, any changes in the identity or
Percentages of the Lender Parties and the Total Credit Commitment
Amount, and (B) copies of such other legal opinions, approvals,
instruments or documents as the Administrative Agent or any Remaining
Lender may reasonably request. Upon their receipt of the replacement
Notes required to be delivered pursuant to clause (A) above, the
Remaining Lenders shall mark the relevant predecessor Notes "exchanged"
and deliver the same to Micro.
SECTION 2.3. Reductions of the Commitment Amounts. Micro may, from
time to time on any Business Day, voluntarily reduce the Total Credit
Commitment Amount or the Letter of Credit Commitment Amount; provided,
however, that
(a) all such reductions shall require at least three and not
more than five Business Days' prior notice to the Administrative Agent
and shall be permanent, and any partial reduction thereof shall be in a
minimum amount of $10,000,000 and in an integral multiple of $1,000,000
(or, if less, in an amount equal to the Total Credit Commitment Amount
at such time); and
(b) Micro shall not voluntarily reduce the Total Credit
Commitment Amount or the Letter of Credit Commitment Amount pursuant to
this Section to an amount which, on the date of proposed reduction,
is less than the aggregate Outstanding Credit Extensions of all the
Lenders.
ARTICLE III
BORROWING PROCEDURES,
LETTERS OF CREDIT AND REGISTERS
SECTION 3.1. Borrowing Procedure for Pro-Rata Revolving Loans.
(a) On any Business Day occurring on or prior to the Commitment
Termination Date, Micro may from time to time irrevocably request, by
delivering on or prior to 1:00 p.m., Eastern time, on such Business Day
a Borrowing Request to the Administrative Agent, (i) in the case of LIBO
Rate Loans, not less than three nor more than five Business Days before
the date of the proposed Borrowing, or (ii) in the case of Reference
Rate Loans, on or before the Business Day of but not more than three
Business Days before the date of the proposed Borrowing, that a
Borrowing be made in a minimum amount of $25,000,000 and an integral
multiple of $1,000,000, or if less, in the unused amount of the Total
Credit Commitment Amount. Upon the receipt of each Borrowing
Request, the Administrative Agent shall give prompt notice thereof to
each Lender on the same day such Borrowing Request is received. On
the terms and subject to the conditions of this Agreement, each
Borrowing shall be comprised of the Type of Loans, and shall be made
on the Business Day, specified in such Borrowing Request. On or
before 2:30 p.m., Eastern time, on such Business Day, each Lender
shall deposit with the Administrative Agent (to an account specified
by the Administrative Agent to each Lender from time to time) same
day funds in an amount equal to such Lender's Percentage of the
requested Borrowing.
To the extent funds are received from the Lenders, the
Administrative Agent shall make such funds available to Micro by wire
transfer to the accounts Micro shall have specified in its Borrowing
Request. No Lender's obligation to make any Pro-Rata Revolving Loan
shall be affected by any other Lender's failure to make any Pro-Rata
Revolving Loan.
(b) Each Lender's Pro-Rata Revolving Loans shall be evidenced by
a single Revolving Note payable to such Lender. Micro hereby
irrevocably authorizes each Lender to make (or cause to be made)
appropriate entries and endorsements on Schedule I to the Revolving Note
payable to such Lender, which entries, if made, shall evidence, inter
alia, the date of, the Type of, the advance period (if applicable) of,
the Maturity of, the outstanding principal of, interest payable on and
any repayments of Pro-Rata Revolving Loans made by such Lender to Micro
pursuant hereto. Any such entries indicating the outstanding principal
amount of such Lender's Pro-Rata Revolving Loans and interest payable
thereon shall be prima facie evidence of the principal amount thereof
owing and unpaid and interest payable thereon, but the failure to make
any such entry shall not limit or otherwise affect the obligations of
Micro hereunder to make payments of principal of or interest on such
Pro-Rata Revolving Loans when due.
SECTION 3.2. Pro-Rata Letter of Credit Issuance Procedures. By
delivering to the Administrative Agent an Issuance Request on or before
1:00 p.m., Eastern time, on any Business Day occurring prior to the
Commitment Termination Date, Micro may from time to time request that an
Issuer (with respect to Pro-Rata Letters of Credit) issue a Pro-Rata Letter
of Credit. Each such request shall be made on not less than two Business
Days' notice (or such shorter period as may be agreed to by the
Administrative Agent), and not less than 30 days prior to the Commitment
Termination Date. Upon receipt of an Issuance Request, the Administrative
Agent shall promptly on the same day notify the applicable Issuer (if other
than NationsBank or Scotiabank) and each Lender thereof. Each Pro-Rata
Letter of Credit shall by its terms be denominated in Dollars and be stated
to expire (whether originally or after giving effect to any extension) on a
date (its "Stated Expiry Date") no later than three days prior to the
Commitment Termination Date. Micro and the relevant Issuer may amend or
modify any issued Pro-Rata Letter of Credit upon written notice to the
Administrative Agent only; provided, however, that (A) any amendment
constituting an extension of such Pro-Rata Letter of Credit's Stated Expiry
Date shall comply with the provisions of the immediately preceding sentence
and may be made only if the Commitment Termination Date has not occurred
and (B) any amendment constituting an increase in the Stated Amount of such
Pro-Rata Letter of Credit shall be deemed a request for the issuance of a
new Pro-Rata Letter of Credit and shall comply with the foregoing
provisions of this paragraph.
Upon satisfaction of the terms and conditions hereunder, the relevant
Issuer will issue each Pro-Rata Letter of Credit to be issued by it and will
make available to the beneficiary thereof the original of such Pro-Rata Letter
of Credit.
SECTION 3.2.1. Other Lenders' Participation. Automatically, and
without further action, upon the issuance of each Pro-Rata Letter of
Credit, each Lender (other than the Issuer of such Pro-Rata Letter of
Credit) shall be deemed to have irrevocably purchased from the relevant
Issuer, to the extent of such Lender's Percentage (and without giving
effect to the outstanding Non-Rata Credit Extensions, if any, of any
Lender), a participation interest in such Pro-Rata Letter of Credit
(including any Pro-Rata Reimbursement Obligation and any other Contingent
Liability with respect thereto), and such Lender shall, to the extent of
its Percentage, be responsible for reimbursing promptly (and in any event
within one Business Day after receipt of demand for payment from the
Issuer, together with accrued interest from the day of such demand) the
relevant Issuer for any Pro-Rata Reimbursement Obligation which has not
been reimbursed in accordance with Section 3.2.3. In addition, such Lender
shall, to the extent of its Percentage, be entitled to receive a ratable
portion of the Pro-Rata Letter of Credit participation fee payable pursuant
to clause (a) of Section 4.3.3 with respect to each Pro-Rata Letter of
Credit and a ratable portion of any interest payable pursuant to Sections
3.2.2. and 4.2.
SECTION 3.2.2. Disbursements. Subject to the terms and provisions of
each Pro-Rata Letter of Credit and this Agreement, upon presentment under any
Pro-Rata Letter of Credit to the Issuer thereof for payment, such Issuer shall
make such payment to the beneficiary (or its designee) of such Pro-Rata Letter
of Credit on the date designated for such payment (the "Disbursement Date").
Such Issuer will promptly notify Micro and each of the Lenders of the
presentment for payment of any such Pro-Rata Letter of Credit, together with
notice of the Disbursement Date thereof. Prior to 12:00 noon, Eastern time,
on the next Business Day following the Disbursement Date, Micro will reimburse
the Administrative Agent, for the account of such Issuer, for all amounts
disbursed under such Pro-Rata Letter of Credit, together with all interest
accrued thereon since the Disbursement Date. To the extent the Administrative
Agent does not receive payment in full, on behalf of the relevant Issuer on
the Disbursement Date, Micro's Pro-Rata Reimbursement Obligation shall accrue
interest at a fluctuating rate equal to the Reference Rate plus 1/2 of 1% per
annum, payable on demand. In the event Micro fails to notify the
Administrative Agent and the relevant Issuer prior to 1:00 p.m., Eastern time,
on the Disbursement Date that Micro intends to pay the Administrative Agent,
for the account of such Issuer, for the amount of such drawing with funds
other than proceeds of Pro-Rata Revolving Loans, or the Administrative Agent
does not receive such reimbursement payment from Micro prior to 1:00 p.m.,
Eastern time on the Disbursement Date (or if the relevant Issuer must for any
reason return or disgorge such reimbursement), the Administrative Agent shall
promptly notify the Lenders, and Micro shall be deemed to have given a timely
Borrowing Request as of the Disbursement Date for Pro-Rata Revolving Loans in
an aggregate principal amount equal to such Pro-Rata Reimbursement Obligation
and the Lenders (including the relevant Issuer) shall, on the terms and
subject to the conditions of this Agreement (including, without limitation,
Sections 6.1 and 6.2 hereof), make Pro-Rata Revolving Loans in the amount of
such Pro-Rata Reimbursement Obligation which shall be Reference Rate Loans as
provided in Section 3.1; provided, however, that for the purpose of
determining the availability of any unused Total Credit Commitment Amount
immediately prior to giving effect to the application of the proceeds of such
Pro-Rata Revolving Loans, such Pro-Rata Reimbursement Obligation shall be
deemed not to be outstanding at such time. In the event that the conditions
precedent to any Pro-Rata Revolving Loans deemed requested by Micro as
provided in the preceding sentence shall not be satisfied at the time of such
deemed request, the Lenders (including the relevant Issuer) shall make demand
loans on such date for the benefit of Micro, ratably, in accordance with their
respective Percentages, which loans shall: (a) aggregate in principal amount
an amount equal to the applicable Pro-Rata Reimbursement Obligations; (b) be
applied solely to the prompt satisfaction of such Pro-Rata Reimbursement
Obligations; (c) be payable by Micro upon demand; and (d) accrue interest on
the unpaid principal amount thereof from (and including) the date on which
such demand loan is made until the date such loan is paid by Micro in full, at
a rate per annum equal to the Reference Rate plus 2% per annum.
SECTION 3.2.3. Reimbursement. The obligation (the "Pro-Rata
Reimbursement Obligation") of Micro under Section 3.2.2. to reimburse the
relevant Issuer with respect to each disbursement under a Pro-Rata Letter
of Credit (including interest thereon), and, upon the failure of Micro to
reimburse such Issuer, the obligation of each Lender to reimburse such
Issuer, shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which
Micro or such Lender, as the case may be, may have or have had against the
relevant Issuer or any Lender, including any defense based upon the failure
of any disbursement under a Pro-Rata Letter of Credit to conform to the
terms of the applicable Pro-Rata Letter of Credit (if, in the relevant
Issuer's good faith opinion, such disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of
the proceeds of such Pro-Rata Letter of Credit; provided, however, that
nothing herein shall require Micro or such Lender, as the case may be, to
reimburse an Issuer for any wrongful disbursement made by such Issuer under
a Pro-Rata Letter of Credit as a result of acts or omissions finally
determined by a court of competent jurisdiction to constitute gross
negligence or willful misconduct on the part of such Issuer.
SECTION 3.2.4. Deemed Disbursements. Upon the occurrence and during
the continuation of any Event of Default of the type described in Section
9.1.9 or, with notice from the Administrative Agent given at the direction
of the Required Lenders, upon the occurrence and during the continuation of
any other Event of Default, an amount equal to the then aggregate amount of
all Letters of Credit (including Non-Rata Letters of Credit) which are
undrawn and available under all issued and outstanding Letters of Credit
shall, without demand upon or notice to Micro, be deemed to have been paid
or disbursed by the Issuer under such Letters of Credit (notwithstanding
that such amount may not in fact have been so paid or disbursed) and Micro
shall be immediately obligated to pay to the Issuer of each Letter of
Credit an amount equal to such amount. Any amounts so payable by Micro
pursuant to this Section shall be deposited in cash with the Administrative
Agent and held in trust (for the sole benefit of the relevant Issuer and
the Lenders) for payment of the Obligations arising in connection with such
Letters of Credit. If such Event of Default shall have been cured or
waived (and provided no other Default has occurred and is continuing and
the Obligations have not been accelerated pursuant to Section 9.2 or 9.3),
the Administrative Agent shall promptly return to Micro all amounts
deposited by it with the Administrative Agent pursuant to this clause
(together with accrued interest thereon at the Federal Funds Rate or such
other interest rate based upon a cash equivalent investment (in the form of
obligations issued by or guaranteed by the U.S. government, commercial
paper of a domestic corporation rated A-1 by S&P or a comparable rating
from another nationally recognized rating agency or certificates of deposit
of a U.S. or Canadian bank with (x) a credit rating of Aa or better by S&P
or a comparable rating from another nationally recognized rating agency and
(y) a combined capital and surplus greater than $250,000,000) which is
agreed to between the relevant Issuer and Micro), net of any amount (which
may include accrued interest) applied to the payment of any Obligations
with respect to the Pro-Rata Letters of Credit.
SECTION 3.2.5. Nature of Reimbursement Obligations. Micro and, to the
extent set forth in Section 3.2.1, each Lender shall assume all risks of
the acts, omission or misuse of any Letter of Credit by the beneficiary
thereof. No Issuer (with respect to Pro-Rata Letters of Credit and Non-Rata
Letters of Credit) or any Lender (except to the extent of its own
gross negligence or willful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with
the application for an issuance of a Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may prove
to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit; provided,
however, if a payment is made pursuant to such Letter of Credit when a
beneficiary has failed to comply with the conditions therefor and such
failure to comply is manifest on the face of such Letter of Credit or
the documents submitted by the beneficiary in connection therewith,
Micro shall be required to indemnify the Issuer in connection therewith
only if, and to the extent, Micro or any of its Subsidiaries has
received the benefit of such payment on such Letter of Credit by one or
more of their obligations being satisfied, either in whole or in part;
(d) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, telecopy or otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a disbursement under a
Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of
the rights or powers granted to any Issuer or any Lender hereunder. In
furtherance and extension and not in limitation or derogation of any of the
foregoing (but subject to the limitations set forth in clause (c) above), any
action taken or omitted to be taken by an Issuer in good faith (and not
constituting gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction) shall be binding upon Micro and, with respect
to Pro-Rata Letters of Credit, each Lender, and shall not put such Issuer
under any resulting liability to Micro or, with respect to Pro-Rata Letters of
Credit, any Lender.
SECTION 3.3. Non-Rata Revolving Loan Facility.
SECTION 3.3.1. Non-Rata Revolving Loans. Any Borrower may from time
to time, on any Business Day prior to the Commitment Termination Date,
request that any Lender make a Loan (relative to such Lender, a "Non-Rata
Revolving Loan") denominated in any Available Currency. The Borrower shall
make such request to the applicable office of such Lender set forth on
Schedule II or to such other office as a Lender may notify the Borrowers
pursuant to Section 11.2. Such Lender may in its sole and absolute
discretion agree to make or not make such Non-Rata Revolving Loan, it being
understood and agreed that the Lenders' Commitments only require the making
by them of Pro-Rata Revolving Loans and participation in or issuance of
Pro-Rata Letters of Credit (subject to the terms and conditions contained
herein). Except as otherwise provided herein and subject in each case to
the satisfaction of the applicable conditions precedent set forth in
Sections 6.1 and 6.2 hereof, each Non-Rata Revolving Loan shall be made on
the terms and conditions agreed to between the relevant Borrower and the
relevant Lender; provided, however, that the Obligations of Micro with
respect to each Pro-Rata Credit Extension shall rank pari passu with the
Obligations of each Borrower with respect to each Non-Rata Revolving Loan.
SECTION 3.3.2. Ineligible Currencies. Notwithstanding any other
provision contained in this Agreement, if, at any time prior to the Commitment
Termination Date, the relevant Lender of a Non-Rata Revolving Loan determines
that the Available Currency in which such Non-Rata Revolving Loan has been
made is an Ineligible Currency, then such Lender may (in its sole discretion)
at any time notify the relevant Borrower of the same. Promptly after
receiving such notice and, in any event, within five Business Days of
receiving the same, such Borrower will notify such Lender as to what Available
Currency it desires such Non-Rata Revolving Loan to be converted into and
promptly thereafter such Lender shall so convert such Loans. If the relevant
Borrower fails to select another Available Currency as provided in the
preceding sentence, such other Available Currency shall be selected by the
relevant Lender. Such conversion shall be effected at the relevant spot rate
at which such Ineligible Currency is offered on such day for the selected
Available Currency which appears on Telerate Page 3740 at approximately 11:00
a.m. (London time) (and if such spot rate is not available on Telerate Page
3740 as of such time, such spot rate as quoted by NationsBank, in London at
approximately 11:00 a.m. (London time)), or, if no such spot rate shall exist,
such other rate of exchange as the relevant Lender shall reasonably determine.
SECTION 3.3.3. Limitations on Making Non-Rata Revolving Loans.
Subject to the last sentence of Section 2.1, no Lender shall be permitted
to make any Non-Rata Revolving Loan if, after giving effect thereto, either
the aggregate Outstanding Credit Extensions of all the Lenders would exceed
the then Total Credit Commitment Amount or the aggregate Outstanding Credit
Extensions consisting of Non-Rata Credit Extensions would exceed
$750,000,000.
SECTION 3.3.4. Procedure for Making Non-Rata Revolving Loans. Subject
to the terms and conditions of this Agreement, including Section 3.3.1, the
terms of each Non-Rata Revolving Loan shall be mutually agreed upon between
the relevant Borrower and the relevant Lender. If the relevant Borrower
and the relevant Lender agree to an interest rate for a Non-Rata Revolving
Loan by reference to a fixed rate of interest (such as, for example, the
LIBO Rate) to be subsequently determined and such Lender subsequently
determines (which determination shall be conclusive and binding on the
relevant Borrower and such Lender) on or prior to the scheduled date of
making such Non-Rata Revolving Loan and promptly notifies the relevant
Borrower that such interest rate is unascertainable or that deposits in the
relevant interbank market are not available to such Lender in the relevant
Available Currency, then such Lender (except to the extent otherwise agreed
between such Lender and the relevant Borrower) shall not be obligated to
make such Non-Rata Revolving Loan. In connection with each Lender agreeing
to make a Non-Rata Revolving Loan calculated based upon a fixed rate of
interest, such Lender shall, in accordance with its customary practices,
attempt to determine the relevant interest rate or obtain the relevant
deposits in the relevant Available Currency necessary to make such Non-Rata
Revolving Loan.
SECTION 3.3.5. Maturity of Non-Rata Revolving Loans. Subject to
Section 3.3.2, each Non-Rata Revolving Loan shall be repaid in the
Available Currency in which such Loan was made on the Maturity thereof or
on any earlier date agreed upon by the relevant Borrower and the relevant
Lender or required by the other terms and conditions of this Agreement.
Each Borrower may prepay any Non-Rata Revolving Loan on such terms and
conditions as such Borrower and the relevant Lender may agree.
SECTION 3.3.6. Non-Rata Revolving Loan Records. Subject to Section
3.3.7, each Lender's Non-Rata Revolving Loans shall be evidenced by a loan
account maintained by such Lender. Each Borrower hereby irrevocably
authorizes the relevant Lender to make (or cause to be made) appropriate
account entries, which account entries, if made, shall evidence, inter
alia, the date of, the Type of, the currency of, the advance period (if
applicable) of, the Maturity of, the outstanding principal of, interest
payable on and any repayments of Non-Rata Revolving Loans made by such
Lender to such Borrower pursuant hereto. Any such account entries
indicating the outstanding principal amount of such Lender's Non-Rata
Revolving Loans and interest payable thereon shall be prima facie evidence
of the principal amount thereof owing and unpaid and interest payable
thereon, but the failure to make any such entry shall not limit or
otherwise affect the obligations of any Borrower hereunder to make payments
of principal of or interest on such Non-Rata Revolving Loans when due.
SECTION 3.3.7. Quarterly Report. During the period commencing on the
date hereof and ending on the Commitment Termination Date, Micro shall submit
(together with each set of reports and financial statements of Micro and its
Consolidated Subsidiaries delivered pursuant to Section 8.1.1 (a) and (b)) a
Quarterly Report to the Administrative Agent in respect of the most recently
ended Fiscal Period. In addition, Micro agrees to provide to the
Administrative Agent updates with respect to the information provided in the
Quarterly Reports at such other times as the Administrative Agent may
reasonably request from time to time.
SECTION 3.4. Non-Rata Letter of Credit Facility.
SECTION 3.4.1. Non-Rata Letters of Credit. Any Borrower may from
time to time, on any Business Day prior to the Commitment Termination Date,
request that any Lender issue a letter of credit (relative to such Lender,
a "Non-Rata Letter of Credit") denominated in any Available Currency. Such
Lender may in its sole and absolute discretion agree to issue or not issue
such Non-Rata Letter of Credit, it being understood and agreed that the
Lenders' Commitments only require the making by them of Pro-Rata Revolving
Loans and participation in or issuance of Pro-Rata Letters of Credit
(subject to the terms and conditions contained herein). Except as
otherwise provided herein and subject in each case to the satisfaction of
the applicable conditions precedent set forth in Sections 6.1 and 6.2
hereof, each Non-Rata Letter of Credit shall be issued on the terms and
conditions agreed to between the relevant Borrower and the relevant Lender;
provided, however, that the Obligations of Micro with respect to each
Pro-Rata Credit Extension shall rank pari passu with the Obligations of each
Borrower with respect to each Non-Rata Letter of Credit.
SECTION 3.4.2. Ineligible Currencies. Notwithstanding any other
provision contained in this Agreement, if, at any time prior to the Commitment
Termination Date, the relevant Issuer of a Non-Rata Letter of Credit
determines that the Available Currency in which such Non-Rata Letter of Credit
has been issued is an Ineligible Currency, then such Issuer may (in its sole
discretion) at any time notify the relevant Borrower of the same. Such
Borrower shall use reasonable efforts to cause the beneficiary of such
Non-Rata Letter of Credit to accept a substitution for such Non-Rata Letter of
Credit with another Non-Rata Letter of Credit in an Available Currency
acceptable to such Borrower and such Issuer.
SECTION 3.4.3. Limitations on Issuing Non-Rata Letters of Credit.
Subject to the last sentence of Section 2.1, no Lender shall be permitted
to issue any Non-Rata Letters of Credit if, after giving effect thereto,
either the aggregate Outstanding Credit Extensions of all the Lenders would
exceed the then Total Credit Commitment Amount or the aggregate Outstanding
Credit Extensions consisting of Non-Rata Credit Extensions would exceed
$750,000,000.
SECTION 3.4.4. Procedures for Issuing Non-Rata Letters of Credit.
Subject to the terms and conditions of this Agreement, including Section
3.4.1, the terms of each Non-Rata Letter of Credit shall be mutually agreed
upon between the relevant Borrower and the relevant Issuer.
SECTION 3.4.5. Disbursements. Subject to the terms and provisions of
each Non-Rata Letter of Credit and this Agreement, upon presentment of any
Non-Rata Letter of Credit to the relevant Issuer thereof for payment, such
Issuer shall make such payment to the beneficiary (or its designee) of such
Non-Rata Letter of Credit on the date designated for such payment (the
"Non-Rata Disbursement Date"). Such Issuer will promptly notify the
relevant Borrower of the presentment for payment of any such Non-Rata
Letter of Credit, together with notice of the Non-Rata Disbursement Date
thereof. Prior to 12:00 noon, Eastern time, on the next Business Day
following the Non-Rata Disbursement Date, the relevant Borrower will
reimburse such Issuer for all amounts disbursed under such Non-Rata Letter
of Credit, together with all interest, if any, that such Borrower shall
have agreed to pay that shall have accrued thereon since the Non-Rata
Disbursement Date.
SECTION 3.4.6. Reimbursement. The obligation (the "Non-Rata
Reimbursement Obligation") of the relevant Borrower under Section 3.4.5. to
reimburse an Issuer with respect to each disbursement under a Non-Rata
Letter of Credit (including interest thereon) issued by such Issuer, shall
be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which such
Borrower or any other Borrower may have or have had against such Issuer,
including any defense based upon the failure of any disbursement under a
Non-Rata Letter of Credit to conform to the terms of the applicable
Non-Rata Letter of Credit (if, in the applicable Issuer's good faith
opinion, such disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of
such Non-Rata Letter of Credit; provided, however, that nothing herein
shall require such Borrower to reimburse the applicable Issuer for any
wrongful disbursement made by such Issuer under a Non-Rata Letter of Credit
as a result of acts or omissions finally determined by a court of competent
jurisdiction to constitute gross negligence or willful misconduct on the
part of such Issuer. Subject to Section 3.4.2, each Non-Rata Letter of
Credit shall be reimbursed in the Available Currency in which such Non-Rata
Letter of Credit was issued.
SECTION 3.5. Bid Rate Facility.
SECTION 3.5.1. Bid Rate Loans. Any Borrower may, on the terms and
conditions of this Agreement, request the Lenders to make offers to make
Bid Rate Loans to such Borrower. The Lenders may, but shall have no
obligation to, make such offers and the relevant Borrower may, but shall
have no obligation to, accept any such offers in the manner set forth in
this Section 3.5. Except as otherwise provided herein and subject in each
case to the satisfaction of the applicable conditions precedent set forth
in Sections 6.1 and 6.2 hereof, each Bid Rate Loan shall be made on the
terms and conditions agreed to between the relevant Borrower and the
relevant Lender; provided, however, that the Obligations of Micro with
respect to each Pro-Rata Credit Extension shall rank pari passu with the
Obligations of each Borrower with respect to each Bid Rate Loan.
SECTION 3.5.2. Quote Request. When a Borrower wishes to request
offers to make Bid Rate Loans, it shall give each of the Lenders (excluding
any Lender that has previously notified the Borrowers that it will not
participate in any LIBO Auctions or Absolute Interest Rate Auctions) notice
by telephone or telecopy (a "Quote Request") so as to be received at the
applicable office of each such Lender set forth on Schedule II or to such
other office as a Lender may notify the Borrowers pursuant to Section 11.2
no later than (a) 3:00 p.m., Eastern time, on the fourth Business Day prior
to the date of borrowing proposed therein, in the case of a LIBO Auction or
(b) 11:00 a.m., Eastern time, on the date of borrowing proposed therein, in
the case of an Absolute Interest Rate Auction. The relevant Borrower may
request offers to make Bid Rate Loans for up to five different Interest
Periods in a single notice; provided, however, that the request for each
separate Interest Period shall be deemed to be a separate Quote Request for
a separate borrowing (a "Bid Rate Borrowing"). Each Bid Rate Borrowing
shall be at least $10,000,000 (or an integral multiple of $1,000,000 in
excess thereof).
SECTION 3.5.3. Submission of Quotes. Each Lender may submit one or
more Quotes, each containing an offer to make a Bid Rate Loan in response
to any Quote Request; provided, however, that, if the relevant Borrower's
request under Section 3.5.2 specified more than one Interest Period, such
Lender may make a single submission containing one or more Quotes for each
such Interest Period. Each Quote must be submitted to the relevant
Borrower not later than (a) 11:00 a.m., Eastern time, on the third Business
Day immediately prior to the proposed date of borrowing, in the case of a
LIBO Auction or (b) 12:00 noon, Eastern time, on the proposed date of
borrowing, in the case of an Absolute Interest Rate Auction. Subject to
Sections 5.1 through 5.5 and 6.2 and Article IX, any Quote so made shall be
irrevocable. Each Quote shall specify: (i) the proposed date of borrowing
and the Interest Period therefor; (ii) the principal amount of the Bid
Rate Loan for which each such offer is being made, which principal amount
shall be at least $10,000,000 (or an integral multiple of $1,000,000 in
excess thereof); provided, however, that the aggregate principal amount of
all Bid Rate Loans for which a Lender submits Quotes may not exceed the
principal amount of the Bid Rate Borrowing for a particular Interest Period
for which offers were requested; (iii) in the case of a LIBO Auction, the
margin above or below the applicable LIBO Rate (the "LIBO Margin") offered
for each such Bid Rate Loan, ex pressed as a percentage (rounded upwards,
if necessary, to the nearest 1/100th of 1%) to be added to or subtracted
from the applicable LIBO Rate; (iv) in the case of an Absolute Interest
Rate Auction, the rate of interest per annum offered for each such Bid Rate
Loan (the "Absolute Interest Rate"); and (v) the identity of the quoting
Lender. No Quote shall contain qualifying, conditional or similar language
or propose terms other than or in addition to those of the Quote Request
and, in particular, no Quote may be conditioned upon acceptance by the
relevant Borrower of all (or some specified minimum) of the principal
amount of the Bid Rate Loan for which such Quote is being made.
SECTION 3.5.4. Acceptance of Quotes. Not later than (a) 11:00 a.m.,
Eastern time, on the second Business Day immediately prior to the proposed
date of borrowing, in the case of a LIBO Auction or (b) 2:00 p.m., Eastern
time, on the proposed date of borrowing, in the case of an Absolute
Interest Rate Auction, the relevant Borrower shall notify each Lender by
telephone or telecopy of such Borrower's acceptance or nonacceptance of the
Quotes submitted to such Borrower by such Lender. The failure of the
relevant Borrower to give such notice by such time shall constitute
nonacceptance of any such Quote. Such Borrower may accept any Quote in
whole or in part (provided that any Quote accepted in part shall be at
least $10,000,000 or an integral multiple of $1,000,000 in excess thereof);
provided, however, that: (i) subject to the limitations set forth in
clause (ii), (iii) or (iv) of this proviso, if two or more Lenders submit
Quotes for any Interest Period at identical pricing and the relevant
Borrower accepts any of such offers but does not wish to (or by reason of
the limitations set forth in clause (ii), (iii) or (iv) of this proviso,
cannot) accept the aggregate principal amount of the Bid Rate Loans offered
by such Lenders, such Borrower shall accept Bid Rate Loans from all of such
Lenders in amounts allocated among them pro rata according to the
respective principal amounts of the respective Bid Rate Loans originally
offered by such Lenders (or as nearly pro rata as shall be practicable in
light of the limitations set forth in clauses (ii), (iii) and (iv) of this
proviso), (ii) the aggregate principal amount of each Bid Rate Borrowing
may not exceed the applicable amount set forth in the related Quote
Request; (iii) the aggregate principal amount of each Bid Rate Borrowing
shall be at least $10,000,000 (or an integral multiple of $1,000,000 in
excess thereof) but shall not cause the limits specified in Section 3.5.8
to be violated; and (iv) the relevant Borrower may not accept any offer
that fails to comply with Section 3.5.3 or otherwise fails to comply with
the requirements of this Agreement.
SECTION 3.5.5. Bid Rate Loan. Any Lender whose offer to make any Bid
Rate Loan has been accepted shall, not later than 3:00 p.m., Eastern time,
on the date specified for the making of such Loan and subject to the other
terms and conditions of this Agreement, make the amount of such Bid Rate
Loan available to the relevant Borrower at such Borrower's Account in
immediately available funds.
SECTION 3.5.6. Maturity of Bid Rate Loans. Each Bid Rate Loan shall be
repaid on the Maturity thereof or on any earlier date agreed upon by the
relevant Borrower and the relevant Lender or required by the other terms and
conditions of this Agreement. The relevant Borrower may prepay any Bid Rate
Loan on such terms and conditions as such Borrower and the relevant Lender may
agree.
SECTION 3.5.7. Bid Rate Loan Records. Each Lender's Bid Rate Loans,
if any, shall be evidenced by a loan account maintained by such Lender.
Each Borrower hereby irrevocably authorizes the relevant Lender to make (or
cause to be made) appropriate account entries, which account entries, if
made, shall evidence, inter alia, the date of, the Type of, the currency
of, the advance period (if applicable) of, the Maturity of, the outstanding
principal of, interest payable on and any repayments of Bid Rate Loans made
by such Lender to such Borrower pursuant hereto. Any such account entries
indicating the outstanding principal amount of such Lender's Bid Rate Loans
and interest payable thereon shall be prima facie evidence of the principal
amount thereof owing and unpaid and interest payable thereon, but the
failure to make any such entry shall not limit or otherwise affect the
obligations of any Borrower hereunder to make payments of principal of or
interest on such Bid Rate Loans when due.
SECTION 3.5.8 Limitations on Making Bid Rate Loans. Subject to the
last sentence of Section 2.1, no Lender shall be permitted to make any Bid
Rate Loan if, after giving effect thereto, either the aggregate Outstanding
Credit Extensions of all the Lenders would exceed the then Total Credit
Commitment Amount or the aggregate Outstanding Credit Extensions consisting
of Non-Rata Credit Extensions would exceed $750,000,000.
ARTICLE IV
PRINCIPAL, INTEREST AND FEE PAYMENTS
SECTION 4.1. Repayments and Prepayments of Pro-Rata Revolving Loans.
Micro shall repay in full the unpaid principal amount of each Pro-Rata
Revolving Loan outstanding to it at the Maturity thereof. Prior thereto,
Micro:
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of
any Pro-Rata Revolving Loan; provided, however, that:
(i) any such prepayment of any Pro-Rata Revolving Loan
shall be allocated to each Lender pro rata according to such
Lender's Percentage (calculated on the date such Pro-Rata
Revolving Loans were made) of the Pro-Rata Revolving Loans so
prepaid (and, for the avoidance of doubt, no such prepayment shall
be allocated to any Lender which did not participate in the making
of the Pro-Rata Revolving Loans to be prepaid);
(ii) no such prepayment of any Pro-Rata Revolving Loan that
is a LIBO Rate Loan may be made on any day other than the last day
of the Interest Period then applicable to such LIBO Rate Loan
unless all the losses or expenses incurred by the Lenders in
connection therewith pursuant to Section 5.4 are paid in full
contemporaneously with such prepayments;
(iii) all such voluntary prepayments shall require prior
notice to the Administrative Agent of (x) at least three but no
more than five Business Days in the case of LIBO Rate Loans and
(y) not more than three Business Days but no later than the date
of such voluntary prepayment in the case of Reference Rate Loans;
and
(iv) all such voluntary prepayments shall, if other than a
prepayment in whole, be in an aggregate minimum amount of
$10,000,000 and an integral multiple of $1,000,000;
(b) shall determine if the aggregate Outstanding Credit
Extensions of all the Lenders exceed the Total Credit Commitment Amount
(i) at the end of each Fiscal Period and (ii) on the date of each
request for a Credit Extension (excluding any request submitted in
respect of any continuation or conversion of any Borrowing previously
made hereunder), and promptly thereafter (and in any event (A) in
respect of any determination made pursuant to clause (i) above, no later
than the next date on which Micro shall be required to submit a
Quarterly Report in accordance with Section 3.3.7 or (B) in respect of
any determination made pursuant to clause (ii) above, prior to the
proposed date of such requested Credit Extension), Micro shall make a
mandatory prepayment of the outstanding principal amount of such Loans
as Micro may select in an amount equal to such excess, such prepayment
to be allocated to the Lenders in such manner as Micro may elect
(provided; that a prepayment of a Pro-Rata Revolving Loan shall be
allocated to the Lenders in the manner set forth in clause (a)(i)
above); and
(c) shall, on each date when any reduction or termination in the
Total Credit Commitment Amount shall become effective, including
pursuant to Section 2.3, make a mandatory prepayment of all Pro-Rata
Revolving Loans equal to the excess, if any, of the then aggregate
Outstanding Credit Extensions of all the Lenders over the Total Credit
Commitment Amount as so reduced, such prepayment to be allocated to the
Lenders in the manner set forth in clause (a)(i).
SECTION 4.2. Interest Provisions. Each Pro-Rata Revolving Loan shall
bear interest from and including the day when made until (but not
including) the day such Pro-Rata Revolving Loan shall be paid in full, and
such interest shall accrue and be payable in accordance with this Section
4.2.
SECTION 4.2.1. Rates.
(a) Pro-Rata Revolving Loans. Subject to Section 4.2.2 and
pursuant to an appropriately completed and delivered Borrowing Request
or Continuation/Conversion Notice, Micro may elect that Pro-Rata
Revolving Loans comprising a Borrowing accrue interest at the following
rates per annum:
(i) Reference Rate Loans. On that portion of such
Borrowing maintained from time to time as a Reference Rate Loan,
equal to the Reference Rate from time to time in effect.
(ii) LIBO Rate Loans. On that portion of such Borrowing
maintained from time to time as a LIBO Rate Loan, during each
Interest Period applicable thereto, the sum of the LIBO Rate for
such Interest Period plus the Applicable Margin.
(b) Non-Rata Revolving Loans. Pursuant to the terms agreed to
between the relevant Borrower and the relevant Lender, each Borrower
shall pay interest on the aggregate principal amount of any Non-Rata
Revolving Loan outstanding to any Lender from time to time prior to and
at Maturity at a rate agreed between each such Borrower and such Lender
pursuant to Section 3.3 in connection with the making of such Non-Rata
Revolving Loan. Such interest rate shall include any compensation for
reserves or similar costs incurred in connection with such Non-Rata
Revolving Loan.
SECTION 4.2.2 Post-Maturity Rates. After the date any principal amount
of any Loan is due and payable (whether at Maturity, upon acceleration or
otherwise), or after any other monetary Obligation of Micro or any other
Borrower shall have become due and payable, Micro or each such other Borrower
shall pay, but only to the extent permitted by law, interest (after as well as
before judgment) on such amounts at a rate per annum equal to the Reference
Rate plus 2%.
SECTION 4.2.3. Continuation and Conversion Elections. Micro may from
time to time by delivering a Continuation/Conversion Notice to the
Administrative Agent on or before 1:00 p.m., Eastern time, on a Business
Day, irrevocably elect, in the case of LIBO Rate Loans, on not less than
three nor more than five Business Days' notice, and in the case of
Reference Rate Loans, on such Business Day, that all, or any portion in an
aggregate minimum amount of $25,000,000 and an integral multiple of
$1,000,000 of the Loans, be, in the case of Reference Rate Loans, converted
into LIBO Rate Loans or be, in the case of LIBO Rate Loans, converted into
Reference Rate Loans or continued as LIBO Rate Loans (in the absence of
delivery of a Continuation/Conversion Notice with respect to any LIBO Rate
Loan, at least three Business Days (but not more than five Business Days)
before the last day of the then current Interest Period with respect
thereto, each such LIBO Rate Loan shall, on such last day, automatically
convert to a Reference Rate Loan); provided, however, that (1) each such
conversion or continuation shall be pro rated among the applicable
outstanding Pro-Rata Revolving Loans of all Lenders, and (2) no portion of
the outstanding principal amount of any Pro-Rata Revolving Loans may be
continued as, or be converted into, a LIBO Rate Loan with an Interest
Period longer than one month while any Default has occurred and is
continuing.
SECTION 4.2.4. Payment Dates.
(a) Pro-Rata Revolving Loans. Interest accrued on each Pro-Rata
Revolving Loan shall be payable, without duplication:
(i) on the Stated Maturity Date therefor;
(ii) on the date of any payment or prepayment, in whole or
in part, of principal outstanding on such Pro-Rata Revolving Loan
(but only on the principal amount so paid or prepaid);
(iii) with respect to each Reference Rate Loan, on each
Quarterly Payment Date;
(iv) with respect to each Reference Rate Loan that is
converted into a LIBO Rate Loan on a day when interest would not
otherwise have been payable pursuant to clause (iii), on the date
of such conversion;
(v) with respect to each LIBO Rate Loan, on the last day
of each applicable Interest Period (and, if such Interest Period
shall exceed three months, on each three month anniversary of the
date of the commencement of such Interest Period); and
(vi) on that portion of any Loans the Stated Maturity Date
of which is accelerated pursuant to Section 9.2 or 9.3,
immediately upon such acceleration.
Interest accrued on Pro-Rata Revolving Loans or other monetary
Obligations arising under this Agreement or any other Loan Document
after the date such Pro-Rata Revolving Loans or other Obligations are
due and payable (whether on the Stated Maturity Date, upon acceleration
or otherwise) shall be payable upon demand.
(b) Non-Rata Revolving Loans. Subject to Section 3.3.2, each
Borrower shall pay interest on the aggregate principal amount of any
Non-Rata Revolving Loan outstanding in the Available Currency in which
such Loan was made to the relevant Lender from time to time prior to and
at Maturity on such dates agreed between such Borrower and such Lender
pursuant to Section 3.3 in connection with the making of such Non-Rata
Revolving Loan.
(c) Bid Rate Loans. Each Borrower shall pay interest on the
aggregate principal amount of any Bid Rate Loan outstanding to the
relevant Lender from time to time prior to and at Maturity on such dates
agreed between such Borrower and such Lender pursuant to Section 3.5 in
connection with the making of such Bid Rate Loan.
SECTION 4.2.5. Interest Rate Determination. The Administrative Agent
and the Reference Lenders shall, in accordance with each of their customary
practices, attempt to determine the relevant interest rates applicable to
each LIBO Rate Loan requested to be made pursuant to each Borrowing Request
duly completed and delivered by Micro and each LIBO Market Loan from time
to time in accordance with the terms hereof, and each Reference Lender
agrees to furnish the Administrative Agent timely information for the
purpose of determining the LIBO Rate. If any Reference Lender fails to
timely furnish such information to the Administrative Agent for any such
interest rate, the Administrative Agent shall determine such interest rate
on the basis of the information furnished by the other Reference Lenders.
SECTION 4.2.6. Additional Interest on LIBO Rate Loans. For so long as
the cost to a Lender of making or maintaining its LIBO Rate Loans is
increased as a result of any imposition or modification of any reserve
required to be maintained by such Lender against Eurocurrency Liabilities
(or any other category of liabilities which includes deposits by reference
to which the interest rate on LIBO Rate Loans is determined or any category
of extensions of credit or other assets which includes loans by a non-United
States office of such Lender to United States residents), then such
Lender may require Micro to pay, contemporaneously with each payment of
interest on the LIBO Rate Loans, additional interest on the related LIBO
Rate Loan of such Lender at a rate per annum up to but not exceeding the
excess of (i) (A) the applicable LIBO Rate divided by (B) one minus the
LIBOR Reserve Percentage over (ii) the applicable LIBO Rate. Any Lender
wishing to require payment of such additional interest shall so notify
Micro and the Administrative Agent (which notice shall set forth the amount
(as determined by such Lender) to which such Lender is then entitled under
this Section 4.2.6 (which amount shall be consistent with such Lender's
good faith estimate of the level at which the related reserves are
maintained by it and which determination shall be conclusive and binding
for all purposes, absent demonstrable error) and shall be accompanied by
such information as to the computation set forth therein as Micro may
reasonably request), in which case such additional interest on the LIBO
Rate Loans of such Lender shall be payable on the last day of each Interest
Period thereafter (commencing with the Interest Period beginning at least
three Business Days after the giving of such notice) to such Lender at the
place indicated in such notice. Each Lender that receives any payment in
respect of increased costs pursuant to this Section shall promptly notify
Micro of any change with respect to such costs which affects the amount of
additional interest payable pursuant to this Section in respect thereof.
SECTION 4.3. Fees. Micro (and, in the case of Section 4.3.3(d), each
relevant Borrower) agrees to pay the fees set forth in this Section 4.3.
All such fees shall be non-refundable and shall be paid to each such Lender
or the relevant Issuer at its office specified for such purpose on the
signature pages hereof.
SECTION 4.3.1. Administration and Documentation Fees. Micro agrees to
pay directly to the Administrative Agent and the Documentation Agent, for
their own accounts, an annual administration and documentation fee,
respectively, in the amounts and on the dates set forth in the Fee Letter.
SECTION 4.3.2. Facility Fees. Micro agrees to pay directly to each
Lender (including any portion thereof when the Lenders may not extend any
Credit Extensions by reason of the inability of Micro to satisfy any
condition of Section 6.1 or 6.2): (a) for each day during the period
commencing on the date hereof and continuing through and including the date
the Administrative Agent shall receive the reports and financial statements
of Micro and its Consolidated Subsidiaries required to be delivered
pursuant to Section 8.1.1(a) hereof (together with the Compliance
Certificate required to be delivered contemporaneously therewith pursuant
to Section 8.1.1(d) hereof) for the Fiscal Year ending on the Saturday
nearest December 31, 1996, a fee to each Lender on its Credit Commitment
Amount on such day (without taking into account usage) at a rate of .125 of
1% per annum and (b) for each day during the period commencing on the date
immediately following the date the Administrative Agent shall receive the
reports, financial statements and Compliance Certificate referred to in
clause (a) above, until but excluding the Commitment Termination Date, a
fee to each Lender on its Credit Commitment Amount on such day (without
taking into account usage) at the corresponding rate per annum set forth
below, determined by reference to: (i) the lower of the two highest
ratings from time to time assigned to Micro's long-term senior unsecured
debt by S&P, Moody's and Fitch and either published or otherwise evidenced
in writing by the applicable rating agency and made available to the
Administrative Agent (including both "express" and "indicative" or
"implied" (or equivalent) ratings) or (ii) the ratio (calculated pursuant
to clause (c) of Section 8.2.3) of Consolidated Funded Debt to Consolidated
EBITDA for the Fiscal Period most recently ended prior to, such day, for
which financial statements and reports have been received by the
Administrative Agent pursuant to Section 8.1(a) or (b), whichever results
in the lower rate:
Micro's Long-Term Senior Unsecured
Debt Ratings by S&P, Moody's or Fitch, Ratio of Consolidated Funded Debt to
respectively Consolidated EBITDA Facility Fee
______________________________________ _______________________________________________ ____________
A-, A3 or A- (or higher) Less than 1.5 .090%
BBB+, Baa1 or BBB+ Greater than or equal to 1.5, but less than 2.0. .110%
BBB, Baa2 or BBB Greater than or equal to 2.0, but less than 2.5. .125%
BBB-, Baa3 or BBB- Greater than or equal to 2.5, but less than 3.0. .150%
BB+, Ba1 or BB+ Greater than or equal to 3.0, but less than 3.25. .200%
Lower than BB+, Ba1 or BB+ Greater than or equal to 3.25. .250%
Such fee shall be calculated by Micro as at each Quarterly Payment Date,
commencing on the first Quarterly Payment Date to occur after the date hereof,
and on the Commitment Termination Date and shall be payable by Micro in
arrears on each Quarterly Payment Date and on the Commitment Termination Date.
Each Lender agrees to promptly notify the Administrative Agent of the failure
of Micro to pay any fee as provided in this Section.
SECTION 4.3.3. Letter of Credit Fees.
(a) Micro agrees to pay directly to each Lender (including the
relevant Issuer) a Pro-Rata Letter of Credit participation fee equal to
each Lender's Percentage of the average daily Stated Amount of each
Pro-Rata Letter of Credit during the applicable period multiplied by the
Applicable Margin then in effect for any LIBO Rate Loan. Such
participation fee shall accrue from the date of issuance of any Pro-Rata
Letter of Credit until the date such Pro-Rata Letter of Credit is drawn
in full or terminated, and shall be payable in arrears on each Quarterly
Payment Date and on the date that the Commitments terminate in their
entirety.
(b) Micro agrees to pay directly to the Issuer of each Pro-Rata
Letter of Credit a Pro-Rata Letter of Credit issuance fee of .125 of 1%
per annum of the average daily Stated Amount of such Pro-Rata Letter of
Credit during the applicable period, such fee to be payable to the
relevant Issuer in quarterly installments in arrears on each Quarterly
Payment Date and on the date that the Commitments terminate in their
entirety. Micro agrees to reimburse each Issuer, on demand, for all
usual out-of-pocket costs and expenses incurred in connection with the
issuance or maintenance of any Pro-Rata Letter of Credit issued by such
Issuer.
(c) Each Lender and Issuer agrees to promptly notify the
Administrative Agent of the failure of Micro to pay any letter of credit
fees pursuant to this Section.
(d) Each Borrower agrees to pay directly to the relevant Issuer
of each Non-Rata Letter of Credit requested by such Borrower an
issuance fee equal to such amount and at such times as such Borrower
and the applicable Issuer shall agree in connection with the issuance
of such Non-Rata Letter of Credit.
SECTION 4.4. Rate and Fee Determinations. Interest on each LIBO Rate
Loan shall be computed on the basis of a year consisting of 360 days and
interest on each Reference Rate Loan and fees shall be computed on the
basis of a year consisting of 365 or 366 days, as the case may be, in each
case paid for the actual number of days elapsed, calculated as to each
period from and including the first day thereof to but excluding the last
day thereof. All determinations by the Administrative Agent of the rate of
interest payable with respect to any Pro-Rata Revolving Loan shall be
conclusive and binding in the absence of demonstrable error.
SECTION 4.5. Obligations in Respect of Non-Rata Credit Extensions.
Micro hereby acknowledges and agrees that notwithstanding any provision
hereof or of any other Loan Document to the contrary, all Obligations of
the Obligors in respect of any Non-Rata Credit Extensions shall be the
joint and several liabilities of Micro.
ARTICLE V
CERTAIN PAYMENT PROVISIONS
SECTION 5.1. Illegality; Currency Restrictions.
(a) If, as the result of any Regulatory Change, any Lender shall
determine (which determination shall, in the absence of demonstrable
error, be conclusive and binding on each Borrower), that it is unlawful
for such Lender to make any LIBO Rate Loan, issue any Non-Rata Letter of
Credit or continue any LIBO Rate Loan previously made by it hereunder,
as the case may be, the obligations of such Lender to make any such LIBO
Rate Loan, issue any such Non-Rata Letter of Credit or continue any such
LIBO Rate Loan, as the case may be, shall, upon the giving of notice
thereof to the Administrative Agent, Micro and any other applicable
Borrower, forthwith be suspended and each applicable Borrower shall, if
requested by such Lender and if required by such Regulatory Change, on
such date as shall be specified in such notice, prepay to such Lender in
full all of such LIBO Rate Loans or convert all of such LIBO Rate Loans
into a Loan of another Type that is not unlawful, in each case on the
last day of the Interest Period applicable thereto (unless otherwise
required by applicable law) and without any penalty whatsoever (but
subject to Section 5.4); provided, however, such Lender shall make as
Reference Rate Loans all Loans that such Lender would otherwise be
obligated to make as LIBO Rate Loans and convert into or continue as
Reference Rate Loans all Loans that such Lender would otherwise be
required to convert into or continue as LIBO Rate Loans, in each case
during the period any such suspension is effective. Such suspension
shall continue to be effective until such Lender shall notify the
Administrative Agent and Micro that the circumstances causing such
suspension no longer exist, at which time the obligations of such Lender
to make any such LIBO Rate Loan, issue any Non-Rata Letter of Credit
or continue any LIBO Rate Loan, as the case may be, shall be
reinstated.
(b) If any central bank or other governmental authorization in
the country of the proposed Available Currency of any proposed Non-Rata
Revolving Loan is required to permit the use of such Available Currency
by a Lender (through its Lending Office) for such Non-Rata Revolving
Loan and such authorization has not been obtained (provided that such
Lender has used reasonable endeavors to obtain such authorization) or is
not in full force and effect, the obligation of such Lender to provide
such Non-Rata Revolving Loans shall be suspended so long as such
authorization is required and has not been obtained by such Lender.
SECTION 5.2. Deposits Unavailable.
(a) If prior to the date on which all or any portion of any LIBO
Rate Loan is to be made, maintained or continued the Administrative
Agent shall have determined (which determination shall be conclusive and
binding), with respect to such LIBO Rate Loan that:
(i) Dollar deposits in the relevant amount and for the
relevant Interest Period are available to none of the Reference
Lenders in the relevant market; or
(ii) by reason of circumstances affecting the London
interbank market, adequate means do not exist for ascertaining the
interest rate applicable hereunder to such LIBO Rate Loan,
then, upon notice from the Administrative Agent to Micro and the
Lenders, the obligations of the Lenders to make or continue any Pro-Rata
Revolving Loan as a LIBO Rate Loan under Sections 3.1 and 4.2.3 shall
forthwith be suspended until the Administrative Agent shall notify Micro
and the Lenders that the circumstances causing such suspension no longer
exist; provided, however, that, for so long as any such suspension shall
be effective, unless the Borrower shall notify the Administrative Agent
prior to 1:00 p.m., Eastern Time, on the date of any proposed Borrowing
that was to be comprised of LIBO Rate Loans that it does not wish to
obtain such Loans as Reference Rate Loans, any proposed Borrowing that
would have been comprised of LIBO Rate Loans but for the terms of this
Section shall be made on the date of such proposed Borrowing as
Reference Rate Loans.
(b) The obligation of any Lender to make a Non-Rata Revolving
Loan shall be suspended under the circumstances provided for pursuant to
Section 3.3.4.
SECTION 5.3. Increased Credit Extension Costs, etc. Each Borrower
agrees to reimburse each Lender upon demand for any increase in the cost to
such Lender of, or any reduction in the amount of any sum receivable by
such Lender in respect of, making, maintaining, participating, issuing or
extending (or of its obligation to make, maintain, participate, issue or
extend) any Credit Extension to the extent such increased cost or reduced
amount is due to a Regulatory Change. Such Lender shall provide to the
Administrative Agent and the relevant Borrower a certificate stating, in
reasonable detail, the reasons for such increased cost or reduced amount
and the additional amount required fully to compensate such Lender for such
increased cost or reduced amount. Such additional amounts shall be payable
by the relevant Borrower directly to such Lender upon its receipt of such
notice, and such notice shall be rebuttable presumptive evidence of the
additional amounts so owing. In determining such amount, such Lender shall
act reasonably and in good faith and may use any method of averaging and
attribution that it customarily uses for its other borrowers with a similar
credit rating as Micro. Such Lender may demand reimbursement for such
increased cost or reduced amount only for the 360-day period immediately
preceding the date of such written notice, and Micro shall have liability
only for such period.
SECTION 5.4. Funding Losses. In the event any Lender shall incur
any loss or expense (including any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to make, continue or extend any portion of the principal amount of
any Loan) as a result of:
(a) any repayment or prepayment of the principal amount of any
Loan on a date other than the scheduled last day of the Interest Period
or, in the case of any Non-Rata Revolving Loan, other relevant funding
period applicable thereto, whether pursuant to Section 4.1 or otherwise;
(b) any conversion of a LIBO Rate Loan into a Reference Rate
Loan on a date other than the scheduled last day of the Interest Period
applicable thereto; or
(c) any Loan not being made, continued or converted in
accordance with the Credit Extension Request therefor in the case of any
Pro-Rata Credit Extension Request or the instructions of the relevant
Borrower to the relevant Lender in the case of any Non-Rata Credit
Extension as a consequence of any action taken, or failed to be
taken, by any Obligor,
then, upon the written notice of such Lender to the relevant Borrower (with a
copy to the Administrative Agent), such Borrower shall, within five days of
its receipt thereof, pay directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss
or expense. Such written notice (which shall include calculations in
reasonable detail) shall be rebuttable presumptive evidence of the amount of
any such loss or expense that has been so incurred.
SECTION 5.5. Increased Capital Costs. If any Regulatory Change
affects or would affect the amount of capital required or expected to be
maintained by any Lender or any Person controlling such Lender, and such
Lender determines (in its sole and absolute discretion) that the rate of
return on its or such controlling Person's capital as a consequence of its
participation in this Agreement or the making, continuing, participating in
or extending of any Credit Extension is reduced to a level below that which
such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case, upon the
relevant Borrower's receipt of written notice thereof from such Lender
(with a copy to the Administrative Agent), such Borrower shall pay directly
to such Lender additional amounts sufficient to compensate such Lender or
such controlling Person for such reduction in rate of return. A statement
of such Lender as to any such additional amounts (including calculations
thereof in reasonable detail) shall be rebuttable presumptive evidence of
the additional amounts so owing. In determining such amount, such Lender
may use any method of averaging and attribution that it shall deem
applicable. Such Lender may demand payment for such additional amounts
that have accrued only during the 360-day period immediately preceding the
date of such written notice and Micro shall have liability only for such
period.
SECTION 5.6. Discretion of Lenders as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, the Lenders
shall be entitled to fund and maintain their funding of all or any part of
their Loans and other Credit Extensions in any manner they elect, it being
understood, however, that for the purposes of this Agreement all
determinations hereunder with respect to a Pro-Rata Revolving Loan shall be
made as if each Lender had actually funded and maintained each Loan through
its Lending Office and through the purchase of deposits having a maturity
corresponding to the maturity of such Pro-Rata Revolving Loan. Any Lender
may, if it so elects, fulfill any commitment or obligation to make or
maintain Loans or other Credit Extensions by causing a branch or affiliate
to make or maintain such Loans or other Credit Extensions; provided,
however, that in such event such Loans or other Credit Extensions shall be
deemed for the purposes of this Agreement to have been made by such Lender
through its applicable Lending Office, and the obligation of Micro to repay
such Loans shall nevertheless be to such Lender at its Lending Office and
shall be deemed held by such Lender through its applicable Lending Office,
to the extent of such Loan, for the account of such branch or affiliate.
SECTION 5.7. Taxes. All payments by any Obligor of principal of, and
interest and fees on, any Credit Extension and all other amounts payable
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any
nature whatsoever imposed by any taxing authority with respect to such
payments, but excluding first, franchise taxes and taxes imposed on or
measured by any Lender Party's gross or net income, profits or receipts and,
second, taxes or other charges of any nature imposed by any taxing authority
on any Lender Party which do not result from any Regulatory Change and which
are not imposed on any class of bank having the same general characteristics
as such Lender Party (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by any
Obligor hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then such Obligor will:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the relevant Lender Party an official
receipt or other documentation satisfactory to such Lender Party
evidencing such payment to such authority; and
(c) pay directly to the relevant Lender Party for its own
account such additional amount or amounts as is or are necessary to
ensure that the net amount actually received by such Lender Party will
equal the full amount such Lender Party would have received had no such
withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any Lender Party with
respect to any payment received by such Lender Party hereunder, such Lender
Party may pay such Taxes and the relevant Obligor will promptly pay such
additional amounts (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such Lender Party after the
payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount such Lender Party would have received had not such Taxes been
asserted.
If the relevant Obligor fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the relevant Lender Parties
entitled thereto the required receipts or other required documentary evidence,
such Obligor shall indemnify such Lender Parties for any incremental Taxes,
interest or penalties that may become payable by any Lender Party as a result
of any such failure.
Each Lender Party organized under the laws of a jurisdiction outside the
United States: (a) either on or prior to (i) the date of its execution and
delivery of this Agreement in the case of each such Lender Party listed on the
signature pages hereof, or (ii) the date on which it becomes a Lender Party in
the case of each such other Lender Party; (b) on or prior to the date of any
change in any such Lender Party's Lending Office; and (c) from time to time
thereafter if requested in writing by Micro (but only so long as such Lender
Party remains lawfully able to do so), shall provide Micro and the
Administrative Agent with Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender Party is entitled to benefits under an income tax
treaty to which the United States is a party which exempts the Lender Party
from United States withholding tax or, except in the case of the initial such
form so delivered hereunder by such Lender Party, reduces the rate of
withholding tax on payments of interest for the account of such Lender Party or
certifying that the income receivable by such Lender Party pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States. For any period with respect to which a Lender Party
organized under the laws of a jurisdiction outside the United States has
failed to provide Micro and the Administrative Agent with the applicable
Internal Revenue Service form required to be so provided in accordance with
this Section 5.7 (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally was
required to be provided), such Lender Party shall not be entitled to
indemnification under this Section 5.7 with respect to United States
withholding tax; provided that if a Lender Party which is otherwise exempt
from or subject to a reduced rate of withholding tax becomes subject to United
States withholding tax because of its failure to deliver an Internal Revenue
Service form required hereunder, Micro shall take such steps as such Lender
Party shall reasonably request to assist such Lender Party to recover such
United States withholding tax.
If any Obligor pays any additional amount under this Section 5.7 (a "Tax
Payment") and any Lender Party or Affiliate thereof effectively obtains a
refund of tax or credit against tax by reason of the Tax Payment (a "Tax
Credit") and such Tax Credit is, in the reasonable judgment of such Lender
Party or Affiliate, attributable to the Tax Payment, then such Lender Party,
after actual receipt of such Tax Credit or actual receipt of the benefits
thereof, shall promptly reimburse such Obligor for such amount as such Lender
Party shall reasonably determine to be the proportion of the Tax Credit as
will leave such Lender Party (after that reimbursement) in no better or worse
position than it would have been in if the Tax Payment had not been required;
provided, however, that no Lender Party shall be required to make any such
reimbursement if it reasonably believes the making of such reimbursement would
cause it to lose the benefit of the Tax Credit or would adversely affect in
any other respect its tax position. Subject to the other terms hereof, any
claim by a Lender Party for a Tax Credit shall be made in a manner, order and
amount as such Lender Party determines in its sole and absolute discretion.
Except to the extent necessary for Micro to evaluate any Tax Credit, no Lender
Party shall be obligated to disclose information regarding its tax affairs or
computations to any Obligor, it being understood and agreed that in no event
shall any Lender Party be required to disclose information regarding its tax
position that it deems to be confidential (other than with respect to the Tax
Credit).
SECTION 5.8. Payments. All payments by an Obligor pursuant to this
Agreement or any other Loan Document, whether in respect of principal,
interest, fees or otherwise, shall be made as set forth in this Section 5.8.
SECTION 5.8.1. Pro-Rata Credit Extensions.
(a) All payments (whether in respect of principal, interest or
otherwise) pursuant to this Agreement or any other Loan Document with
respect to Pro-Rata Credit Extensions or any other amount payable
hereunder (other than amounts payable with respect to Non-Rata Revolving
Loans, Bid Rate Loans, Non-Rata Reimbursement Obligations, fees payable
pursuant to Section 4.3 (which fees shall be paid directly by Micro or
the relevant Borrower to the relevant payee), 11.3 or 11.4 and payments
made to a Terminating Lender pursuant to Section 9.4), shall be made by
Micro to the Administrative Agent for the account of each Lender based
upon its Percentage in the case of Pro-Rata Letters of Credit and its
Percentage in the case of any Pro-Rata Revolving Loan (such Percentage
to be calculated on the date each such Pro-Rata Revolving Loan was
made). All such payments required to be made to the Administrative
Agent shall be made, without set-off, deduction or counterclaim, not
later than 1:00 p.m., Eastern time, on the date when due, in same day or
immediately available funds, to such account as the Administrative Agent
shall specify from time to time by notice to Micro. Funds received
after that time shall be deemed to have been received by the
Administrative Agent on the next succeeding Business Day. The
Administrative Agent shall promptly remit in same day funds to each
Lender its share, if any, of such payments received by the
Administrative Agent for the account of such Lender. Whenever any
payment hereunder shall be stated to be due on a day other than a
Business Day, such payment shall, except as otherwise required pursuant
to clause (d) of the definition of Interest Period, be made on the next
succeeding Business Day, and such extension of time shall in such case
be included in the computation of payment of interest or fees, as the
case may be.
(b) In the case of any payment made pursuant to the preceding
clause (a) by Micro to the Administrative Agent, unless the
Administrative Agent shall have received notice from Micro prior to the
date on which any such payment is due hereunder that Micro will not make
such payment in full, the Administrative Agent may assume that Micro has
made such payment in full to the Administrative Agent on such date and
the Administrative Agent may, in reliance upon such assumption, cause to
be distributed to each Lender on such due date an amount equal to the
amount then due to such Lender. If Micro shall not have so made such
payment in full to the Administrative Agent, each Lender shall repay to
the Administrative Agent forthwith on demand any such amount distributed
to the Lender to the extent that such amount was not paid by Micro to the
Administrative Agent together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 5.8.2. Non-Rata Obligations. All payments (whether in respect
of principal, interest, fees or otherwise) by any Borrower pursuant to this
Agreement or any other Loan Document with respect to the Non-Rata Credit
Extensions shall be made by such Borrower, in the currency in which the
Obligation was denominated (the "Required Currency") and in same day or
immediately available funds, to the relevant Lender or Issuer, as the case may
be (for its own account), at an account specified by such Lender or Issuer, as
the case may be, from time to time by notice to the relevant Borrower. All
such payments on account of Non-Rata Revolving Loans or Non-Rata Reimbursement
Obligations shall be made on the date due, without set-off, deduction or
counterclaim and at the times agreed to between the relevant Borrower and the
relevant Lender or Issuer, as the case may be. Each Lender that has made a
Non-Rata Revolving Loan or Bid Rate Loan agrees to give the Administrative
Agent prompt notice of any payment or failure to pay when due of any amounts
owing with respect to each such Non-Rata Revolving Loan or Bid Rate Loan.
Each Issuer that has issued a Non-Rata Letter of Credit agrees to give the
Administrative Agent prompt notice of any payment or failure to pay when due
any Non-Rata Reimbursement Obligations or any other amounts owing with respect
to such Non-Rata Letter of Credit.
SECTION 5.9. Sharing of Payments.
(a) Prior to the occurrence of a Pro-Rata Distribution Event,
the Administrative Agent shall remit payments made by Micro to it
pursuant to Section 5.8.1, and each Lender shall retain for its own
account all payments received by it pursuant to Section 5.8.2.
(b) Upon the occurrence and continuation of a Pro-Rata
Distribution Event,
(i) the Lenders shall share all collections and recoveries
in respect of the Credit Extensions and Obligations hereunder on a
pro rata basis, based on the respective Outstanding Credit
Extensions of each Lender, including unpaid principal, interest,
indemnities and fees payable with respect thereto; and
(ii) Micro, each other Borrower and each other Obligor
shall make payment of all amounts owing hereunder (whether in
respect of principal, interest, fees or otherwise or on account of
any Pro-Rata Credit Extension or Non-Rata Credit Extension) to the
Administrative Agent for the account of the Lenders as provided in
the preceding clause (i). The Administrative Agent shall promptly
remit in same day funds to each Lender its share, if any, of all
payments received by the Administrative Agent for the account of
such Lender.
(c) For purposes of the foregoing, a "Pro-Rata Distribution
Event" shall mean the first to occur of (i) an Event of Default
pursuant to Section 9.1.1 or 9.1.9 or (ii) any Default if, in
connection therewith, the Required Lenders shall have notified the
Administrative Agent (and, upon receipt of any such notice, the
Administrative Agent shall promptly notify Micro and the Lenders of
the same) of the occurrence of such Default and shall have instructed
the Administrative Agent that payments hereunder shall be allocated
as provided in the preceding clause (b).
(d) If at any time the proportion which any Lender Party (the
"Receiving Lender Party") has received or recovered (whether by set-off
or otherwise) in respect of its portion of any sum due from any Borrower
hereunder or under any other Loan Document is in excess of (the amount
of such excess being herein referred to as the "Excess Amount") the
proportion of such sum thereof which the Receiving Lender Party is
entitled to receive pursuant to clause (b)(i), then the Receiving Lender
Party shall promptly notify the Administrative Agent thereof and:
(i) the Receiving Lender Party shall promptly and in any
event within ten days of receipt or recovery of the Excess Amount
pay to the Administrative Agent an amount equal to the Excess
Amount;
(ii) the Administrative Agent shall treat such payment as
if it were a payment by the relevant Borrower on account of a sum
owed to the Receiving Lender Party and shall pay the same to the
relevant Lender Parties entitled to share in such payment
(including the Receiving Lender Party) as provided in clause
(b)(i); and
(iii) as between the relevant Borrower and the Receiving
Lender Party the Excess Amount shall be treated as not having been
paid, while as between such Borrower and each Lender Party
referred to in the preceding clause (d)(ii), it shall be treated
as having been paid by such Borrower to the extent received by
such Lender Party;
provided, however, that where a Receiving Lender Party is subsequently
required to repay to any Obligor any amount received or recovered by it
and paid to the other Lender Parties pursuant to this clause (d), each
relevant Lender Party shall promptly repay to the Administrative Agent
for the account of the Receiving Lender Party the portion of such amount
distributed to it pursuant to this clause (d), together with interest
thereon at a rate sufficient to reimburse the Receiving Lender Party for
any interest which it has been required to pay to such Obligor in
respect of such portion of such amount.
SECTION 5.10. Right of Set-off. Upon the occurrence and during the
continuance of any Default, after providing notice to Micro with respect
thereto (which notice shall not be required during any period when an Event of
Default shall have occurred and be continuing), each Lender Party is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final but excluding, for the avoidance of doubt, any
payment received pursuant to this Agreement by the Administrative Agent in its
capacity qua Administrative Agent on behalf of the Lenders) at any time held
and other indebtedness at any time due and owing by such Lender Party (in any
currency and at any branch or office) to or for the credit or the account of
any Obligor against any and all of the Obligations of such Obligor now or
hereafter existing under this Agreement or any other Loan Document that are at
such time due and owing, irrespective of whether or not such Lender Party
shall have made any demand under this Agreement or such other Loan Document
(other than any notice expressly required hereby). The rights of each Lender
Party under this Section 5.10 are in addition to other rights and remedies
(including other rights of set-off) which such Lender Party may have.
SECTION 5.11. Judgments, Currencies, etc. The obligation of each
Obligor to make payment of all Obligations in the Required Currency shall
not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment, which is expressed in or converted into any currency other
than the Required Currency, except to the extent such tender or recovery
shall result in the actual receipt by the recipient at the office required
hereunder of the full amount of the Required Currency expressed to be
payable under this Agreement or any other Loan Document. Without limiting
the generality of the foregoing, each Obligor authorizes the Administrative
Agent (or in the case of a Non-Rata Revolving Loan or any other amount
required to be paid to any Lender directly, the relevant Lender) on any
tender or recovery in a currency other than the Required Currency to
purchase in accordance with normal banking procedures the Required Currency
with the amount of such other currency so tendered or recovered. The
obligation of each Obligor to make payments in the Required Currency shall
be enforceable as an alternative or additional cause of action for the
purpose of recovery in the Required Currency of the amount (if any) by
which such actual receipt shall fall short of the full amount of the
Required Currency expressed to be payable under this Agreement or any other
Loan Document, and shall not be affected by judgment being obtained for any
other sums due under this Agreement or such other Loan Document.
SECTION 5.12. Replacement of Lenders. Each Lender hereby severally
agrees that if such Lender (a "Subject Lender") makes demand upon any
Borrower for (or if any Borrower is otherwise required to pay) amounts
pursuant to Section 4.2.6, 5.3, 5.5 or 5.7, or if the obligation of such
Lender to make LIBO Rate Loans is suspended pursuant to Section 5.1(a),
such Borrower may, so long as no Event of Default shall have occurred and
be continuing, replace such Subject Lender with another financial
institution pursuant to an assignment in accordance with Section 11.11.1;
provided that (i) unless such financial institution is a Lender or an
Affiliate of a Lender, such financial institution shall become a Lender
only with the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld, and (ii) the purchase price
paid by such designated financial institution shall be in the amount of
such Subject Lender's Loans and its Percentage of outstanding Reimbursement
Obligations, together with all accrued and unpaid interest and fees in
respect thereof, plus all other amounts (including the amounts demanded and
unreimbursed under Sections 4.2.6, 5.3, 5.5 and 5.7), owing to such Subject
Lender hereunder. Upon the effective date of such assignment, (a) the
relevant Borrower shall issue a replacement Note to such designated financial
institution and such institution shall become a Lender for all purposes
under this Agreement and the other Loan Documents and (b) the relevant Subject
Lender shall deliver to Micro all of its Notes, such Notes to be canceled
by Micro.
SECTION 5.13. Change of Lending Office. If Micro or any other Obligor
is required to pay additional amounts to or for the account of any Lender
Party pursuant to Section 4.2.6, 5.3, 5.5 or 5.7, or if the obligation of
any Lender to make or continue LIBO Rate Loans is suspended pursuant to
Section 5.1(a), then such Lender Party will change the jurisdiction of its
Lending Office if, in the judgment of such Lender Party, such change (i)
will eliminate or reduce any such additional payment which may thereafter
accrue or will avoid such suspension and (ii) is not otherwise
disadvantageous to such Lender Party.
ARTICLE VI
CONDITIONS TO MAKING CREDIT EXTENSIONS
AND ACCESSION OF ACCEDING BORROWERS
SECTION 6.1. Initial Credit Extension. The obligation of each Lender
and, if applicable, any Issuer to make the initial Credit Extension shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 6.1.
SECTION 6.1.1. Resolutions, etc. The Administrative Agent shall have
received from each Obligor a certificate, dated the Effective Date and with
counterparts for each Lender, duly executed and delivered by the Secretary,
Assistant Secretary or other authorized representative of such Obligor as to:
(a) resolutions of its Board of Directors or its Executive
Committee, as the case may be, then in full force and effect authorizing
the execution, delivery and performance of this Agreement and the
Guaranty and each other Loan Document to be executed by it;
(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement and the Guaranty and
each other Loan Document to be executed by it; and
(c) the Organic Documents of such Obligor (including, without
limitation, with respect to Micro, a copy of the executed Board
Representation Agreement),
upon which certificate each Lender may conclusively rely until the
Administrative Agent shall have received a further certificate of the
Secretary of the relevant Obligor canceling or amending such prior
certificate. In addition, each Obligor shall have delivered to the
Administrative Agent a good standing certificate from the relevant
governmental regulatory institution of its jurisdiction of incorporation, each
such certificate to be dated a date reasonably near (but prior to) the date
of the initial Credit Extension.
SECTION 6.1.2. Effective Date Certificate. The Administrative Agent
shall have received, with counterparts for each Lender, the Effective Date
Certificate, dated the Effective Date and duly executed and delivered by the
chief executive officer, an Authorized Person or the Treasurer of Micro. All
documents and agreements required to be appended to the Effective Date
Certificate shall be in form and substance satisfactory to the Lenders.
SECTION 6.1.3. Delivery of Notes. The Administrative Agent shall have
received, for the account of each Lender, such Lender's Revolving Note, Bid
Rate Note and Non-Rata Revolving Note, duly executed and delivered by the
Obligor party thereto, as the case may be.
SECTION 6.1.4. Guaranties, etc. The Administrative Agent shall have
received, with counterparts for each Lender, (a) each of the Guaranties in
effect as of the Effective Date, dated the date hereof, duly executed and
delivered by an Authorized Person of the relevant Guarantor and (b) the
Intra-Group Agreement, dated the date hereof and duly executed by each
Borrower that is a Guarantor.
SECTION 6.1.5. Financial Information, etc. The Administrative Agent
shall have received true and correct copies for each Lender, of
(a) audited consolidated financial statements of Micro and its
Consolidated Subsidiaries for its last Fiscal Year, prepared in
accordance with GAAP free of any Impermissible Qualifications; and
(b) unaudited consolidated financial statements for Micro and
its Consolidated Subsidiaries for the first two Fiscal Periods of the
1996 Fiscal Year, prepared in accordance with GAAP.
SECTION 6.1.6. Compliance Certificate. The Administrative Agent shall
have received, with counterparts for each Lender, an initial Compliance
Certificate, dated as of the Effective Date.
SECTION 6.1.7. Payment of Outstanding Indebtedness. The Administrative
Agent shall have received evidence satisfactory to it that
contemporaneously with the making of the initial Credit Extension (a) all
"Obligations" (including those in respect of Indebtedness thereunder and
accrued interest with respect thereto) under the Existing Industries Credit
Agreement shall be satisfied in full, whether through the application,
directly or indirectly, of any portion of the proceeds of such initial
Credit Extension or through the application of other moneys, and (b) all
"Commitments" under the Existing Industries Credit Agreement shall be
terminated.
SECTION 6.1.8. Consents, etc. The Administrative Agent shall have
received evidence satisfactory to it as to the receipt by each Obligor of
any necessary consents or waivers under any agreement applicable to such
Obligor in order to enable such Obligor to enter into this Agreement and
any other Loan Document, to perform its obligations hereunder and
thereunder and, in the case of each Borrower, to obtain Credit Extensions
hereunder.
SECTION 6.1.9. Closing Fees, Expenses, etc. The Administrative Agent
and each Lender shall have received payment in full of all fees, costs and
expenses due and payable pursuant to Sections 4.3 and 11.3 (to the extent
then invoiced).
SECTION 6.1.10. Opinions of Counsel. The Administrative Agent shall
have received opinions of counsel, dated the Effective Date and addressed
to the Documentation Agent, the Administrative Agent and all the Lenders,
from:
(a) James E. Anderson, General Counsel of Micro, covering the
matters set forth in Exhibit M hereto;
(b) Davis Polk & Wardwell, special counsel to Micro, covering
the matters set forth in Exhibit N hereto;
(c) Baker & McKenzie, special Belgian counsel to Coordination
Center, substantially in the form of Exhibit O hereto;
(d) Fogler, Rubinoff, special Canadian counsel to Micro Canada,
substantially in the form of Exhibit P hereto;
(e) Yeo Wee Kiong and Partners, special Singapore counsel to
Micro Singapore, substantially in the form of Exhibit Q hereto; and
(f) King & Spalding, counsel to the Agents, substantially in the
form of Exhibit R hereto.
SECTION 6.1.11. Investment Prospectus. The Administrative Agent shall
have received a true and correct copy of the final Prospectus (filed or to
be filed with the Securities and Exchange Commission pursuant to Rule
424(b) under the Securities Act of 1933, as amended) (the "Investment
Prospectus") and comprising a part of the registration statement on Form
S-1 (Registration No. 333-08453) filed with the Securities and Exchange
Commission in connection with the Investment.
SECTION 6.1.12. Senior Executive Officer's Certificate. The
Administrative Agent shall have received, with counterparts for each
Lender, a certificate, dated the Effective Date and duly executed and
delivered by a senior executive officer of Micro stating that (i) the First
Closing (as defined in the Amended and Restated Exchange Agreement referred
to below) has occurred of the share exchanges contemplated by that certain
Amended and Restated Exchange Agreement to be entered into among
Industries, Entertainment, Micro and certain shareholders of Industries,
(ii) each of Ingram Micro Holdings Inc., a California corporation, and
Ingram Micro Inc., a California corporation, has merged into Micro, (iii)
the Investment has been successfully completed or will be successfully
completed concurrently with the initial Credit Extension hereunder; (iv)
since December 31, 1995, there has occurred no event or events which,
singly or in the aggregate, has resulted in a Material Adverse Effect; and
(v) the descriptions of the Transition Agreements and the transactions
contemplated thereby set forth in the annexes attached thereto, when taken
as a whole, do not include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
SECTION 6.1.13. Satisfactory Legal Form. All documents executed or
submitted pursuant to this ARTICLE VI by or on behalf of each Obligor shall
be satisfactory in form and substance to the Administrative Agent (who may
rely upon the advice of its legal counsel with respect to legal matters in
making such determination) and the Administrative Agent shall have received
such additional information, approvals, opinions, documents or instruments
as the Administrative Agent or the Required Lenders may reasonably request.
SECTION 6.2. All Credit Extensions. The obligation of each Lender to
make any Credit Extension (including the initial Credit Extension) shall be
subject to the satisfaction of each of the additional conditions precedent
set forth in this Section 6.2.
SECTION 6.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to such Credit Extension other than any
continuation or conversion (except as otherwise set forth in the final
proviso to this Section) of a Borrowing (but, if any Default of the nature
referred to in Section 9.1.5 shall have occurred with respect to any other
Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds of such Credit Extension to such other
Indebtedness), the following statements shall be true and correct:
(a) the representations and warranties of each Obligor set forth
in ARTICLE VII (excluding, however, those contained in Section 7.8) and
in any other Loan Document shall be true and correct with the same
effect as if then made (unless stated to relate solely to an earlier
date, in which case such representations and warranties shall be true
and correct as of such earlier date); provided, however, that if any of
the financial statements delivered pursuant to clause (b) of Section
8.1.1 do not present fairly the consolidated financial condition of the
Persons covered thereby as of the dates thereof and the results of their
operations for the periods then ended and Micro subsequently delivers
one or more financial statements pursuant to clause (a) or (b) of
Section 8.1.1 which, in the opinion of the Required Lenders, effectively
cures any omission or misstatement contained in such prior delivered
financial statement, the representation and warranty contained in
Section 7.6 as it relates to such prior delivered financial statement
shall be deemed satisfied for purposes hereof (it being understood and
agreed that such subsequent delivered financial statements shall be
deemed to have cured such earlier delivered inaccurate financial
statements unless the Required Lenders raise an objection with respect
thereto);
(b) except as disclosed in Item 7.8 (Litigation) of the
Disclosure Schedule:
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to
the knowledge of any Obligor, threatened against any Obligor, or
any of their respective Consolidated Subsidiaries in respect of
which there exists a reasonable possibility of an outcome that
would result in a Material Adverse Effect or that would affect the
legality, validity or enforceability of this Agreement or any
other Loan Document; and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental investigation
or proceeding so disclosed in respect of which there exists a
reasonable possibility of an outcome that would result in a
Material Adverse Effect;
(c) no Default shall have occurred and be continuing, and no
Obligor, nor any of their respective Subsidiaries, shall be in violation
of any law or governmental regulation or court order or decree which,
singly or in the aggregate, results in, or would reasonably be expected
to result in, a Material Adverse Effect; and
(d) the Outstanding Credit Extensions of all the Lenders do not
exceed the Total Credit Commitment Amount (as such amount may be reduced
from time to time pursuant to Section 2.3);
provided however, that, in the case of any continuation or conversion of a
Borrowing, no Event of Default shall have occurred and be continuing.
SECTION 6.2.2. Credit Extension Request. In the case of any Pro-Rata
Credit Extension the Administrative Agent shall have received the relevant
Credit Extension Request in a timely manner as herein provided for such
Pro-Rata Credit Extension. Delivery of a Credit Extension Request and the
acceptance by Micro or any other Borrower of the proceeds of any Pro-Rata
Credit Extension shall constitute a representation and warranty by each
Obligor that, on the date of making such Pro-Rata Credit Extension (both
immediately before and after giving effect to the making of such Pro-Rata
Credit Extension and the application of the proceeds thereof), the
statements made in Section 6.2.1 are true and correct.
SECTION 6.2.3. Non-Rata Revolving Loans. In the case of any requested
Non-Rata Revolving Loan, each of the applicable conditions set forth in
Sections 3.3 and 6.2 or otherwise specified by the relevant Lender in
connection with such Non-Rata Revolving Loan shall have been satisfied.
SECTION 6.2.4. Non-Rata Letters of Credit. In the case of any
requested Non-Rata Letter of Credit, each of the applicable conditions set
forth in Sections 3.4 and 6.2 or otherwise specified by the relevant Issuer
(with respect to Non-Rata Letters of Credit) in connection with such
Non-Rata Letter of Credit shall have been satisfied.
SECTION 6.2.5. Bid Rate Loans. In the case of any requested Bid Rate
Loan, each of the applicable conditions set forth in Sections 3.5 and 6.2 or
otherwise specified by the relevant Lender in connection with such Bid Rate
Loan shall have been satisfied.
SECTION 6.3. Acceding Borrowers. Subject to the prior or concurrent
satisfaction of the conditions precedent set forth in this Section 6.3, any
Subsidiary of Micro may become a party hereto and a Supplemental Borrower and
an Obligor hereunder subsequent to the Effective Date (each such Subsidiary of
Micro, an "Acceding Borrower"), entitled to all the rights and subject to all
the obligations incident thereto and each Acceding Borrower may request the
Lenders to make Non-Rata Credit Extensions on the terms and subject to the
conditions of this Agreement.
SECTION 6.3.1. Resolutions, etc. The Administrative Agent shall have
received from such Acceding Borrower a certificate, dated the date such
Acceding Borrower is accepted by the Administrative Agent as a Supplemental
Borrower hereunder and with counterparts for each Lender, duly executed and
delivered by the Secretary, Assistant Secretary or other authorized
representative of such Acceding Borrower as to:
(a) resolutions of its Board of Directors or its Executive
Committee, as the case may be, then in full force and effect authorizing
the execution, delivery and performance of this Agreement and the
Guaranty and each other Loan Document to be executed by it;
(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement and the Guaranty and
each other Loan Document to be executed by it; and
(c) the Organic Documents of such Acceding Borrower,
upon which certificate each Lender may conclusively rely until the
Administrative Agent shall have received a further certificate of the
Secretary of such Acceding Borrower canceling or amending such prior
certificate. In addition, each Acceding Borrower shall have delivered to the
Administrative Agent a good standing certificate from the relevant
governmental regulatory institution of its jurisdiction of organization, each
such certificate to be dated a date reasonably near (but prior to) the date
such Acceding Borrower becomes a Supplemental Borrower hereunder.
SECTION 6.3.2. Delivery of Accession Request and Acknowledgment and
Notes. The Administrative Agent shall have received (a) an original
Accession Request and Acknowledgment duly completed and executed and
delivered by such Acceding Borrower and originals of any other instruments
evidencing accession of such Acceding Borrower hereunder as the
Administrative Agent may reasonably request, in each case effective as of
the date such Acceding Borrower becomes a Supplemental Borrower hereunder
and (b) for the account of each Lender (unless illegal (or otherwise likely
to result in consequences materially adverse to such Acceding Borrower)
under any local law, rule or regulation applicable to such Acceding
Borrower, in which case such Acceding Borrower shall provide prior notice
thereof to the Lenders and shall provide (prior to the date such Acceding
Borrower becomes a Supplemental Borrower hereunder) other evidence of such
Indebtedness or other documentation acceptable to the Required Lenders)
such Lender's Bid Rate Note and Non-Rata Revolving Note, duly executed and
delivered by such Acceding Borrower and in effect on the date such Acceding
Borrower becomes a Supplemental Borrower hereunder.
SECTION 6.3.3. Guaranties, etc. The Administrative Agent shall have
received, with counterparts for each Lender, (a) an Additional Guaranty
executed by such Acceding Borrower, in effect as of the date such Acceding
Borrower becomes a Supplemental Borrower hereunder, duly executed and
delivered by an Authorized Person of such Acceding Borrower and (b) such
instruments and documents evidencing accession of such Acceding Borrower under
the Intra-Group Agreement as the Administrative Agent may reasonably
request, in each case effective with respect to such Acceding Borrower as
of the date such Acceding Borrower becomes a Supplemental Borrower
hereunder.
SECTION 6.3.4. Compliance Certificate. The Administrative Agent shall
have received, with counterparts for each Lender, a Compliance Certificate
from Micro, dated the date such Acceding Borrower becomes a Supplemental
Borrower hereunder.
SECTION 6.3.5. Consents, etc. The Administrative Agent shall have
received evidence satisfactory to it as to the receipt by such Acceding
Borrower of any necessary consents or waivers under any agreement
applicable to such Acceding Borrower in order to enable such Acceding
Borrower to enter into this Agreement and any other Loan Document, to
perform its obligations hereunder and thereunder and to obtain Credit
Extensions hereunder.
SECTION 6.3.6. Opinions of Counsel. The Administrative Agent shall
have received an opinion of counsel, dated the date such Acceding Borrower
becomes a Supplemental Borrower hereunder and addressed to the
Documentation Agent, the Administrative Agent and all the Lenders, from the
General Counsel of Micro, or such other counsel as shall be reasonably
satisfactory to the Administrative Agent, covering the matters set forth in
Exhibit M hereto as to such Acceding Borrower.
SECTION 6.4. Waiver of Notice under Existing Industries Credit
Agreement. By its execution of this Agreement, each Lender that is a party
to the Existing Industries Credit Agreement (if in effect on the date of
the initial Credit Extension) agrees to waive the requirements set forth in
Sections 2.3 and 4.1 of the Existing Industries Credit Agreement for the
provision of advance notice by Industries and any other borrower thereunder
to the administrative agent thereunder in respect of the consummation of
the transactions contemplated by Section 6.1.7 hereof.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender Parties to enter into this Agreement and
to make Credit Extensions hereunder, each Borrower represents and warrants
unto the Administrative Agent and each Lender with respect to itself and the
other Obligors as set forth in this ARTICLE VII.
SECTION 7.1. Organization, etc. Each of the Obligors and each of their
respective Subsidiaries is a company or corporation, as the case may be,
validly organized and existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the nature of its business requires such qualification and where the
failure to so qualify and to maintain such good standing, singularly or in the
aggregate, has resulted in, or would reasonably be expected to result in, a
Material Adverse Effect, and has full power and authority and holds all
requisite governmental licenses, permits, authorizations and other approvals
to enter into and perform its Obligations under this Agreement and each other
Loan Document to which it is a party and to own and hold under lease its
property and to conduct its business substantially as currently conducted by
it, excluding any such governmental licenses, permits or other approvals in
respect of which the failure to so obtain, hold or maintain has not caused,
and would not reasonably be expected to result in, a Material Adverse Effect.
SECTION 7.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by each Obligor of this Agreement and each other Loan
Document executed or to be executed by it are within such Obligor's corporate
powers, have been duly authorized by all necessary corporate action,
and do not
(a) contravene such Obligor's Organic Documents;
(b) contravene any law or governmental regulation or court
decree or order binding or affecting such Obligor; or
(c) result in, or require the creation or imposition of, any
Lien on any of such Obligor's properties.
SECTION 7.3. No Default. None of the Obligors, nor any of their
respective Subsidiaries, is in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note,
or in any indenture, loan agreement, or other agreement, in connection with
or as a result of which default there exists a reasonable possibility that
a Material Adverse Effect could arise. The execution, delivery and
performance by each Obligor of this Agreement and each other Loan Document
executed or to be executed by such Obligor will not conflict with, or
constitute a breach of, or a default under, any such bond, debenture, note,
indenture, loan agreement or other agreement to which any Obligor or any of
their respective Subsidiaries is a party or by which it is bound, in
connection with, or as a result of which, conflict, breach or default,
there exists a reasonable possibility that a Material Adverse Effect could
arise.
SECTION 7.4. Government Approval, Regulation, etc. No action by, and
no notice to or filing with, any governmental authority or regulatory body or
other Person and no payment of any stamp or similar tax, is required for the
due execution, delivery or performance by any Obligor of this Agreement or any
other Loan Document to which it is a party. No Obligor, nor any of their
respective Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), or
a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of
1935, as amended.
SECTION 7.5. Validity, etc. This Agreement constitutes, and each other
Loan Document executed by any Obligor will, on the due execution and delivery
thereof, constitute, the legal, valid and binding obligations of each Obligor
party thereto, enforceable against such Obligor in accordance with their
respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors' rights generally or by general principles of equity.
SECTION 7.6. Financial Information. The financial statements of Micro
and its Consolidated Subsidiaries to be delivered pursuant to Section 6.1.5
will have been prepared in accordance with GAAP and present fairly
(subject, in the case of such financial statements delivered pursuant to
clause (b) thereof (which financial statements, in accordance with Section
1.4(a) hereof, are not required to contain certain footnote disclosures
required by GAAP), to ordinary year-end adjustments) the consolidated
financial condition of the Persons covered thereby as at the dates thereof
and the results of their operations for the periods then ended. All the
financial statements delivered pursuant to clauses (a) and (b) of Section
8.1.1 have been and will be prepared in accordance with GAAP consistently
applied, and do or will present fairly (subject, in the case of such
financial statements delivered pursuant to clause (b) thereof (which
financial statements, in accordance with Section 1.4(a) hereof, are not
required to contain certain footnote disclosures required by GAAP), to
ordinary year-end adjustments) the consolidated financial condition of the
Persons covered thereby as of the dates thereof and the results of their
operations for the periods then ended.
SECTION 7.7. No Material Adverse Effect. Since December 31, 1995, there
has been no event or events which, singly or in the aggregate, have resulted
in a Material Adverse Effect.
SECTION 7.8. Litigation, Labor Controversies, etc. Except as
disclosed in Item 7.8 (Litigation) of the Disclosure Schedule, there is no
pending or, to the knowledge of any Obligor, threatened litigation, action,
proceeding or labor controversy affecting any Obligor, or any of their
respective Subsidiaries, or any of their respective properties, businesses,
assets or revenues, in respect of which there exists a reasonable
possibility of an outcome that would result in a Material Adverse Effect or
that would affect the legality, validity or enforceability of this
Agreement or any other Loan Document.
SECTION 7.9. Subsidiaries. As of the date hereof, Micro has no
Subsidiaries, except those Subsidiaries which are identified in Item 7.9
(Existing Subsidiaries) of the Disclosure Schedule and certain other
Subsidiaries that are shell corporations that do not conduct any business and
do not in the aggregate have a net worth exceeding $1,000,000.
SECTION 7.10. Ownership of Properties. Each Obligor and each of their
respective Subsidiaries owns good and marketable title (or their respective
equivalents in any applicable jurisdiction) to all of its properties and
assets, real and personal, tangible and intangible, of any nature whatsoever,
free and clear of all Liens, charges or claims except as permitted pursuant to
Section 8.2.2, except where such failure or failures to own, singly or in the
aggregate, has not resulted in, or would not reasonably be expected to result
in, a Material Adverse Effect.
SECTION 7.11. Taxes. Each Obligor and each of their respective
Subsidiaries has filed all material tax returns and reports it reasonably
believes are required by law to have been filed by it and has paid all taxes
and governmental charges thereby shown to be owing, except as disclosed in
Item 7.11 (Taxes) of the Disclosure Schedule and except for any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books; provided, however, that with respect to any
Subsidiary that is not a Material Subsidiary this representation and warranty
shall be satisfied if the tax returns or reports not so filed or the taxes or
governmental charges owing by each such Subsidiary are not with respect to any
income, sales or use tax and the amount so owing (or which would be so owing
if such tax returns or reports were duly filed) with respect to all such
Subsidiaries, does not exceed in the aggregate $1,000,000 at any time.
SECTION 7.12. Pension and Welfare Plans. Except to the extent that
any such termination, liability, penalty or fine would not (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect, (a) during the twelve-consecutive-month period prior to the
date hereof and prior to the date of any Credit Extension hereunder, except
as disclosed in Item 7.12 (Employee Benefit Plans) of the Disclosure
Schedule, no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA, (b) no
condition exists or event or transaction has occurred with respect to any
Pension Plan which might result in the incurrence by any Obligor or any
member of the related Controlled Group of any material liability with
respect to any contribution thereto, fine or penalty, and (c) except as
disclosed in Item 7.12 (Employee Benefit Plans) of the Disclosure Schedule,
neither any Obligor nor any member of the related Controlled Group has any
material contingent liability with respect to any post-retirement benefit
under a Welfare Plan, other than liability for continuation coverage
described in Part 6 of Title I of ERISA.
SECTION 7.13. Environmental Warranties.
(a) Each Obligor and each of their respective Subsidiaries has
obtained all environmental, health and safety permits, licenses and
other authorizations required under all Environmental Laws to carry on
its business as now being or as proposed to be conducted, except to the
extent failure to have any such permit, license or authorization would
not (either individually or in the aggregate) reasonably be expected to
have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each Obligor and each of
their respective Subsidiaries is in compliance with the terms and
conditions thereof, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any
applicable Environmental Law or in any plan, judgment, injunction,
notice or demand letter issued, entered or approved thereunder,
except to the extent failure to comply therewith would not (either
individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect.
(b) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed,
no penalty has been assessed and no investigation or review is pending
or, to the knowledge of any Obligor, threatened by any governmental or
other entity with respect to any alleged failure by any Obligor or any
of their respective Subsidiaries to have any environmental, health or
safety permit, license or other authorization required under any
Environmental Law in connection with the conduct of the business of any
Obligor or any of their respective Subsidiaries or with respect to any
generation, treatment, storage, recycling, transportation, discharge or
disposal, or any Release of any Hazardous Materials generated by any
Obligor or any of their respective Subsidiaries, except to the extent
failure to have any such permit, license or authorization would not
(either individually or in the aggregate) reasonably be expected to have
a Material Adverse Effect.
SECTION 7.14. Outstanding Indebtedness. As of the date hereof neither
Micro nor any of its Subsidiaries has any outstanding Indebtedness other than
Indebtedness disclosed in Item 7.14 (Outstanding Indebtedness) of the
Disclosure Schedule and Indebtedness that could be incurred pursuant to clause
(ii) of Section 8.2.1 (a).
SECTION 7.15. Accuracy of Information.
(a) Except as otherwise set forth in paragraph (b) of this
Section, all factual information furnished by or on behalf of any
Obligor to any Lender Party for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, when taken as a
whole, to the best of the knowledge of each Borrower, and all other
factual information hereafter furnished by or on behalf of any Obligor
to any Lender Party will be, when taken as a whole, to the best of the
knowledge of each Borrower, true and accurate in all material respects
on the date as of which such information is dated or certified and (in
the case of any such information furnished prior to the date hereof) as
of the date hereof (unless such information relates to an earlier date,
in which case such information, when taken as a whole, shall be true and
accurate in all material respects as of such earlier date), and is not,
or shall not be, as the case may be, when taken as a whole, incomplete
by omitting to state any material fact necessary to make such
information not misleading.
(b) The information (i) describing the Transition Agreements and
the transactions contemplated thereby set forth in the annexes to the
certificate delivered to the Administrative Agent pursuant to Section
6.1.12, when considered as a whole, does not and will not include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, (ii) contained in any
financial projections furnished hereunder is and will be based upon
assumptions and information believed by Micro to be reasonable, and
(iii) furnished with express written disclaimers with regard to the
accuracy thereof, is and shall be subject to such disclaimers.
SECTION 7.16. Patents, Trademarks, etc. Each Obligor and each of their
respective Subsidiaries owns and possesses, or has a valid and existing
license of, or other sufficient interest in, all such patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service mark rights and copyrights as is necessary for the conduct of the
business of each such Obligor or its Subsidiaries as now conducted, without,
to the best of the knowledge of each such Obligor, any infringement upon
rights of other Persons, which infringement results in or would reasonably be
expected to result in a Material Adverse Effect, and there is no license or
other interest or right, the loss of which results in, or would reasonably be
expected to result in, a Material Adverse Effect.
SECTION 7.17. Margin Stock. No part of the proceeds of any Credit
Extension shall be used at any time by any Obligor or any of their
respective Subsidiaries for the purpose, whether immediate, incidental or
ultimate, of buying or carrying Margin Stock (within the meaning of
Regulation U (as amended, modified, supplemented or replaced and in effect
from time to time, "Regulation U") promulgated by the F.R.S. Board of
Governors of the Federal Reserve System (together with any successor
thereto, the "F.R.S. Board")) or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock if any such use or
extension of credit described in this Section 7.17 would cause any of the
Lender Parties to violate the provisions of Regulation U. Neither any
Obligor nor any of their respective Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for
the purposes of purchasing or carrying any such Margin Stock within the
meaning of Regulation U. Not more than 25% of the value of the assets of
any Obligor or any Subsidiary of any Obligor is, as of the date hereof,
represented by Margin Stock. No part of the proceeds of any Credit
Extension will be used by any Obligor or any of their respective
Subsidiaries for any purpose which violates, or which is inconsistent with,
any regulations promulgated by the F.R.S. Board, including Regulation U.
ARTICLE VIII
COVENANTS
SECTION 8.1. Affirmative Covenants. Each Borrower agrees with the
Agents and each Lender that, until all the Commitments have terminated and all
Obligations have been paid and performed in full, each Borrower will perform
its respective obligations set forth in this Section 8.1.
SECTION 8.1.1. Financial Information, Reports, Notices, etc. Micro will
furnish, or will cause to be furnished, to each Lender Party copies of the
following financial statements, reports, notices and information:
(a) as soon as available and in any event within 120 days after
the end of each Fiscal Year of Micro, a copy of the annual audit report
for such Fiscal Year for Micro and its Consolidated Subsidiaries,
including therein consolidated balance sheets of Micro and its
Consolidated Subsidiaries as of the end of such Fiscal Year and
consolidated statements of earnings, stockholders' equity and cash flow
of Micro and its Consolidated Subsidiaries for such Fiscal Year, setting
forth in each case, in comparative form, the figures for the preceding
Fiscal Year, in each case certified (without any Impermissible
Qualification, except that (i) qualifications relating to
pre-acquisition balance sheet accounts of Person(s) acquired by Micro or
any of its Subsidiaries and (ii) statements of reliance in the auditor's
opinion on another accounting firm shall not be deemed an Impermissible
Qualification) in a manner satisfactory to the Securities and Exchange
Commission (under applicable United States securities law) by Price
Waterhouse or its successors or other independent public accountants of
national reputation;
(b) as soon as available and in any event within 60 days after
the end of each of the first three Fiscal Periods occurring during any
Fiscal Year of Micro, a copy of the unaudited consolidated and
consolidating financial statements of Micro and its Consolidated
Subsidiaries, consisting of (i) a balance sheet as of the close of such
Fiscal Period and (ii) related statements of earnings and cash flows for
such Fiscal Period and from the beginning of such Fiscal Year to the end
of such Fiscal Period, in each case certified by an officer who is an
Authorized Person of Micro as to (A) being a complete and correct copy
of such financial statements which have been prepared in accordance with
GAAP consistently applied as provided in Section 1.4, and (B)
presenting fairly the financial position of Micro and its
Consolidated Subsidiaries;
(c) at the time of delivery of each financial statement required
by clause (a) or (b), a certificate signed by an Authorized Person of
Micro stating that no Default has occurred and is continuing (or if a
Default has occurred and is continuing, and without prejudice to any
rights or remedies of any Lender Party hereunder in connection therewith,
a statement of the nature thereof and the action which Micro has taken
or proposes to take with respect thereto);
(d) at the time of delivery of each financial statement required
by clause (a) or (b), a Compliance Certificate showing compliance with
the financial covenants set forth in Section 8.2;
(e) to the extent not otherwise disclosed in a report on Form
10-K, Form 10-Q or Form 8-K filed with the Securities and Exchange
Commission and previously furnished pursuant to clause (f) below, as
soon as possible after (i) the occurrence of any material adverse
development with respect to any litigation, action, proceeding, or labor
controversy disclosed in Item 7.8 (Litigation) of the Disclosure
Schedule, or (ii) the commencement of any labor controversy, litigation,
action, proceeding of the type described in Section 7.8, notice thereof;
(f) promptly after the filing thereof, copies of (i) any
registration statements (other than the exhibits thereto and excluding
any registration statement on Form S-8 and any other registration
statement relating exclusively to stock, bonus, option, 401(k) and other
similar plans for officers, directors and employees of Micro,
Industries, Entertainment or any of their respective Subsidiaries),
(ii) any amendments or supplements to the Investment Prospectus and
(iii) all reports on Form 10-K, Form 10-Q or Form 8-K (or any
respective successor forms thereto) which Micro or any Subsidiary of
Micro is required to file with the Securities and Exchange Commission
(or any successor authority) or any national securities exchange
(including, in each case, any exhibits thereto requested by any
Lender Party);
(g) to the extent not otherwise disclosed in a report on Form
10-K, Form 10-Q or Form 8-K filed with the Securities and Exchange
Commission and previously furnished pursuant to clause (f) above,
immediately upon becoming aware of the institution of any steps by any
Obligor or any other Person to terminate any Pension Plan other than
pursuant to Section 4041(b) of ERISA, or the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give
rise to a Lien under Section 302(f) of ERISA, or the taking of any
action with respect to a Pension Plan which could result in the
requirement that any Obligor furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any other event with
respect to any Pension Plan which, in any such case, results in, or
would reasonably be expected to result in, a Material Adverse Effect,
notice thereof and copies of all documentation relating thereto;
(h) as soon as possible and in any event within three Business
Days after becoming aware of the occurrence of a Default or any
inaccuracy in the financial statements delivered pursuant to clause (a)
or (b) of Section 8.1.1 if the result thereof is not to present fairly
the consolidated financial condition of the Persons covered thereby as
of the dates thereof and the results of their operations for the periods
then ended, a statement of an Authorized Person of Micro setting forth
the details of such Default or inaccuracy and the action which Micro has
taken or proposes to take with respect thereto;
(i) in the case of each Borrower, promptly following the
consummation of any transaction described in Section 8.2.5, a
description in reasonable detail regarding the same; and
(j) such other information respecting the condition or
operations, financial or otherwise, of each Borrower, or any of their
respective Subsidiaries as any Lender through the Administrative Agent
may from time to time reasonably request.
SECTION 8.1.2. Compliance with Laws, etc. Each Borrower will (and each
Borrower will cause each of its Subsidiaries to) comply in all respects with
all applicable laws, rules, regulations and orders the noncompliance with
which results in, or would reasonably be expected to result in, a Material
Adverse Effect, such compliance to include (without limitation):
(a) except as may be otherwise permitted pursuant to Section
8.2.5, the maintenance and preservation of its corporate existence (and
in the case of Coordination Center, its status as a coordination center)
in accordance with the laws of the jurisdiction of its incorporation and
qualification as a foreign corporation (subject to the materiality
standard referred to above); and
(b) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books; provided, however,
that with respect to any Subsidiary that is not a Material Subsidiary
this covenant shall be satisfied if the taxes, assessments or other
governmental charges owing by each such Subsidiary (i) is not with
respect to any income, sales or use tax and (ii) the amount so owing
with respect to all such Subsidiaries does not exceed in the
aggregate $1,000,000 at any time.
SECTION 8.1.3. Maintenance of Properties. Each Borrower will (and each
Borrower will cause each of its Subsidiaries to) maintain, preserve, protect
and keep its material properties in good repair, working order and condition,
and make necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times, unless such Borrower or such Subsidiary determines in good faith that
the continued maintenance of any of its properties is no longer economically
desirable.
SECTION 8.1.4. Insurance. Each Borrower will (and each Borrower will
cause each of its Subsidiaries to) maintain, or cause to be maintained with
responsible insurance companies or through such Borrower's own program of
self-insurance, insurance with respect to its properties and business against
such casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses and will, upon request of the
Administrative Agent, furnish to each Lender at reasonable intervals a
certificate of an Authorized Person of such Borrower setting forth the nature
and extent of all insurance maintained by such Borrower and each of its
Subsidiaries in accordance with this Section 8.1.4.
SECTION 8.1.5. Books and Records. Each Borrower will (and each
Borrower will cause each of its Subsidiaries to) keep books and records
which accurately reflect all of its business affairs and transactions and
permit the Administrative Agent and each Lender, or any of their respective
representatives, at reasonable times and intervals, to visit all of its
offices, to discuss its financial matters with its officers and independent
public accountants (and each Borrower hereby authorizes such independent
public accountants to discuss the financial matters of such Borrower and its
Subsidiaries with the Administrative Agent and each Lender or its
representatives whether or not any representative of such Borrower is present
but provided that an officer of such Borrower is afforded a reasonable
opportunity to be present at any such discussion) and to examine any of its
relevant books or other corporate records. Micro will pay all expenses
associated with the exercise of any Lender Party's rights pursuant to this
Section 8.1.5 at any time during the occurrence and continuance of any Event
of Default.
SECTION 8.1.6. Environmental Covenant. Each Borrower will (and each
Borrower will cause each of its Subsidiaries to):
(a) use and operate all of its facilities and properties in
compliance with all Environmental Laws which, by their terms, apply to
such use and operation, keep all necessary permits, approvals,
certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and
handle all Hazardous Materials in compliance with all Environmental Laws
which, by their terms, apply to such Hazardous Materials, in each case
so that the non-compliance with any of the foregoing does not result in,
or would not reasonably be expected to result in, either singly or in
the aggregate, a Material Adverse Effect;
(b) immediately notify the Administrative Agent and provide
copies upon receipt of all written claims, complaints, notices or
inquiries relating to the condition of its facilities and properties or
compliance with Environmental Laws which, singly or in the aggregate,
result in, or would reasonably be expected to result in, a Material
Adverse Effect, and shall promptly cure and have dismissed with
prejudice any actions and proceedings relating to compliance with
Environmental Laws where the failure to so cure or have dismissed,
singularly or in the aggregate, results in, or would reasonably be
expected to result in, a Material Adverse Effect (it being understood
that this clause (b) shall not be construed to restrict any Borrower or
any of its Subsidiaries from challenging or defending any such action or
proceeding which it, in its sole discretion, deems advisable or
necessary); and
(c) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to
evidence compliance with this Section 8.1.6.
SECTION 8.1.7. Use of Proceeds. Each Borrower shall apply the
proceeds of each Credit Extension in accordance with the last recital of
this Agreement and shall not use directly and immediately, any proceeds to
acquire, or finance the acquisition of, any equity interest in Coordination
Center.
SECTION 8.1.8. Pari Passu. Each Borrower shall ensure that such
Borrower's Obligations rank at least pari passu with all other unsecured
Indebtedness of such Borrower.
SECTION 8.1.9. Guarantee or Suretyship. If any Borrower or any of its
Subsidiaries becomes a party to any contract of guarantee or suretyship which
would constitute Indebtedness, or if any of its assets becomes subject to such
a contract, that contract will be disclosed in the next financial information
to be provided by Micro pursuant to clause (c) of Section 8.1.1; provided,
however, that any failure to comply with the disclosure obligations of this
Section 8.1.9 shall not constitute a Default unless the existence of the
contract or contracts of guarantee or suretyship which Micro fails to disclose
would result in a Default under clause (c) of Section 8.2.3.
SECTION 8.1.10. Additional Guaranty. Micro (a) may cause any of its
Subsidiaries to execute and deliver from time to time in favor of the
Lender Parties additional guaranties (each an "Additional Guaranty") for
the repayment of the Obligations and (b) shall, concurrently or promptly after
any of its Subsidiaries (i) guarantees any Indebtedness of Micro or any
other Obligor or (ii) satisfies (at any time) the requirements hereunder
which describe a Material Subsidiary, cause such Subsidiary to execute and
deliver in favor of the Lender Parties an Additional Guaranty for the
repayment of the Obligations. Each Additional Guaranty (including, without
limitation, any Additional Guaranty executed and delivered by an Acceding
Borrower pursuant to Section 6.3.3) shall be in substantially the form of
Exhibit J attached hereto, shall be governed by the laws of a State of the
United States and shall contain such other terms and provisions as the
Administrative Agent determines to be necessary or appropriate (after
consulting with legal counsel) in order that such Additional Guaranty
complies with local laws, rules and regulations and is fully enforceable
(at least to the extent of such Additional Guaranty) against such
Additional Guarantor; provided, that, in the event it shall be illegal
under any local law, rule or regulation for any Additional Guaranty to be
governed by the law of any State of the United States, and the
Administrative Agent shall have received evidence of such illegality
(including, if the Administrative Agent shall so request, an opinion of
local counsel as to such matters, which counsel and the form and substance
of such opinion shall be reasonably satisfactory to the Administrative
Agent) reasonably satisfactory to it, the Administrative Agent shall
consent to such Additional Guaranty being governed by the laws of a
jurisdiction outside of the United States, which jurisdiction shall be
subject to the prior approval of the Administrative Agent.
In connection with the delivery of any such Additional Guaranty by an
Additional Guarantor there shall be delivered an opinion of counsel (which
counsel and the form and substance of such opinion shall be reasonably
satisfactory to the Administrative Agent and the Required Lenders, it being
agreed that if the Additional Guaranty is governed by the laws of any State of
the United States, the General Counsel of Micro shall be satisfactory counsel
for purposes hereof) addressed to the Documentation Agent, the Administrative
Agent and the Lenders addressing the matters set forth in Exhibit M, as it
relates to such Additional Guarantor and Additional Guaranty.
SECTION 8.1.11. Intra-Group Agreement, etc. Except to add additional
Subsidiaries of Micro as parties thereto, the terms of the Intra-Group
Agreement shall not be amended or otherwise modified without the prior consent
of the Administrative Agent on behalf of and as directed by the requisite
Lenders, such consent not to be unreasonably withheld. In addition, no Person
a party to the Intra-Group Agreement shall assign any of its rights or
obligations thereunder without the prior consent of the Administrative Agent,
such consent not to be unreasonably withheld.
SECTION 8.2. Negative Covenants. Each Borrower agrees with the
Administrative Agent and each Lender that, until all the Commitments have
terminated and all Obligations have been paid and performed in full, each
Borrower will perform its respective obligations set forth in this
Section 8.2.
SECTION 8.2.1. Restriction on Incurrence of Indebtedness.
(a) No Borrower will (and no Borrower will permit any of its
Subsidiaries to) create, incur, assume or suffer to exist or otherwise
become or be liable in respect of any Indebtedness, other than the
following:
(i) Indebtedness in respect of the Credit Extensions;
(ii) Indebtedness existing as of the date hereof or
incurred pursuant to commitments or lines of credit in effect on
the date hereof (or any renewal or replacement thereof, so long as
such renewals or replacements do not increase the amount of such
Indebtedness or such commitments or lines of credit), in any case
identified in Item 8.2.1(a)(ii) (Ongoing Indebtedness) of the
Disclosure Schedule; and
(iii) additional Indebtedness if after giving effect to the
incurrence thereof the Borrowers are in compliance with Section
8.2.3, calculated as of the date of the incurrence of such
additional Indebtedness, on a pro forma basis.
(b) Micro will not at the end of any Fiscal Period permit the
sum of (i) Total Indebtedness of Subsidiaries (other than any Guarantor)
and (ii) the Amount of Additional Liens to exceed fifteen percent (15%)
of Consolidated Tangible Net Worth.
SECTION 8.2.2 Restriction on Incurrence of Liens. No Borrower will
(and no Borrower will permit any of its Subsidiaries to) create, incur,
assume or suffer to exist any Lien upon any of its property, revenues or
assets, whether now owned or hereafter acquired, except:
(a) Liens existing as of the date hereof and identified in Item
8.2.2(a) (Existing Liens) of the Disclosure Schedule and Liens resulting
from the extension, renewal or replacement of any such Liens in respect
of the same property theretofore subject to such Lien; provided,
however, that (i) no property shall become subject to such extended,
renewed or replacement Lien that was not subject to the Lien extended,
renewed or replaced, (ii) the aggregate principal amount of Indebtedness
secured by any such extended, renewed or replacement Lien shall not be
increased by such extension, renewal or replacement, (iii) the
Indebtedness secured by such Lien shall be incurred in compliance
with the applicable terms hereof, including Section 8.2.3, and (iv)
both immediately before and after giving effect thereto, no Default
shall exist;
(b) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(c) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance of
statutory obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds;
(e) judgment Liens of less than $60,000,000 in the aggregate, or
with respect to which execution has been stayed or the payment of which
is covered in full (subject to a customary deductible) by insurance
maintained with responsible insurance companies and for which, within 30
days of such judgment, the insurance carrier has acknowledged coverage
in writing;
(f) Liens on property purchased or constructed after the date
hereof securing Indebtedness used to purchase or construct such
property; provided, however, that (i) no such Lien shall be created in
or attach to any other asset at the time owned by Micro or any of its
Subsidiaries if the aggregate principal amount of the Indebtedness
secured by such property would exceed the fair market value of such
property and assets, taken as a whole, (ii) the aggregate outstanding
principal amount of Indebtedness secured by all such Liens shall not at
any time exceed one hundred percent (100%) of the fair market value of
such property at the time of the purchase or construction thereof, and
(iii) each such Lien shall have been incurred within two hundred
seventy (270) days of the purchase or completion of construction of
such property;
(g) Liens resulting from utility easements, building
restrictions and such other encumbrances or charges against real
property as are of a nature generally existing with respect to
properties of a similar character and which do not in any material way
affect the marketability of the same or interfere with the use thereof
in the business of any Borrower or any of its Subsidiaries;
(h) Liens incurred in the normal course of business in
connection with bankers' acceptance financing or used in the ordinary
course of trade practices, statutory lessor and vendor privilege liens
and liens in connection with ad valorem taxes not yet due, good faith
bids, tenders and deposits;
(i) Liens on all goods held for sale on consignment;
(j) Liens granted by any Subsidiary of Micro in favor of Micro
or in favor of another Subsidiary of Micro that is the parent of such
Subsidiary granting the Lien, other than Liens granted by a Guarantor to
a Subsidiary of Micro that is not a Guarantor; provided, however, that
no Person that is not a Subsidiary of Micro shall be secured by or
benefit from any such Lien;
(k) Liens of the nature referred to in clause (b) of the
definition of the term "Lien" and granted to a purchaser or any assignee
of such purchaser which has financed the relevant purchase of Trade
Accounts Receivable of any Borrower or any of their respective
subsidiaries;
(l) Liens on accounts receivable of Micro Canada with respect to
any accounts receivable securitization program; and
(m) Additional Permitted Liens.
SECTION 8.2.3. Financial Condition. Micro will not permit any of the
following:
(a) the Consolidated Current Ratio as at the end of any Fiscal
Period to be less than 1.0 to 1.0; or
(b) the ratio of (i) Consolidated EBITDA for any period of four
consecutive Fiscal Periods to (ii) Consolidated Interest Charges for
such period to be less than 3.5 to 1.0; or
(c) the ratio of (i) the average daily balances of Consolidated
Funded Debt during any Fiscal Period to (ii) Consolidated EBITDA for the
period of four Fiscal Periods ending on the last day of such Fiscal
Period to exceed 3.5 to 1.0; provided that, for purposes of calculating
this ratio, Consolidated Funded Debt on any day shall be the amount
otherwise determined pursuant to the definition thereof plus the amount
of Consolidated Transferred Receivables on such day.
(d) the Consolidated Tangible Net Worth as at the end of any
Fiscal Period to be less than the sum of (i) the greater of (A)
$500,000,000 and (B) an amount equal to 90% of Consolidated Tangible Net
Worth as at the end of the Fiscal Year ending nearest to December 31,
1996, plus (ii) as at the end of each Fiscal Year commencing with the
Fiscal Year ending closest to December 31, 1997, 67% of Consolidated Net
Income (without taking into account any losses incurred in any Fiscal
Year) since the beginning of the Fiscal Year which began closest to
December 31, 1996.
SECTION 8.2.4. Dividends. Except for dividends paid, or redemptions
made, in any Fiscal Year that do not exceed fifty percent (50%) of
Consolidated Net Income for the immediately preceding Fiscal Year, Micro
will not declare or pay any dividends (in cash, property or obligations) or
any other payments or distributions on account of, or set apart money for a
sinking or analogous fund for, or purchase, redeem, retire or otherwise
acquire for value, any shares of its capital stock now or hereafter
outstanding or any warrants, options or other rights to acquire the same;
return any capital to its stockholders as such; or make any distribution of
assets to its stockholders as such; provided, however, that Micro may
redeem, purchase or acquire any of its capital stock (i) issued to
employees pursuant to any Plan or other contract or arrangement relating to
employment upon the termination of employment or other events or (ii) in a
transaction contemplated by the Transition Agreements.
SECTION 8.2.5. Consolidation, Merger, Asset Acquisitions, etc.
(a) No Borrower will liquidate or dissolve, consolidate with, or
merge into or with, or exchange shares with, any other Person, or sell,
transfer, lease or otherwise dispose of all or substantially all of its
assets to any Person, except, if no Default has occurred and is
continuing or would occur after giving effect thereto:
(i) any Obligor (except Micro) may liquidate or dissolve
voluntarily into any other Obligor and may merge into or with or
exchange shares with any other Person or sell, transfer, lease or
otherwise dispose of all or substantially all of its assets to any
other Person, so long as the surviving entity or such transferee of
such assets shall continue to be an Obligor;
(ii) Micro may merge into or with any other Person;
provided, that: (A) either (1) Micro is the surviving entity or
(2) the surviving entity formed by such consolidation or into
which Micro shall be merged (which entity shall be a Person
organized, existing and in good standing under the laws of a State
of the United States) shall expressly assume Micro's Obligations
in a written agreement or undertaking satisfactory in form and
substance to Lenders holding, in the aggregate, 85% of the
Commitments and (B) Micro can demonstrate (in a manner and in such
scope and detail as are acceptable to either (1) if such merger
satisfies the requirements of subclause (1) of clause (A) above,
the Required Lenders, or (2) if such merger satisfies the
requirements of subclause (2) of clause (A) above, Lenders
holding, in the aggregate, 85% of the Commitments) that the
surviving entity (x) will be, immediately upon and following the
consummation of such proposed transaction, in compliance with each
of the covenants set forth in Sections 8.2.1 and 8.2.2 and (y) on
a pro forma basis, assuming such proposed transaction had been
consummated on the first day of the most recently ended period of
four Fiscal Periods for which financial statements have been or
are required to have been delivered pursuant to Section 8.1.1,
would have been in compliance with each of the covenants set forth
in Section 8.2.3 as of the last day of such period; and
(iii) Micro may exchange shares with any Person; provided,
that (A) either (1) Micro is the surviving entity of the
transaction in which such shares were exchanged, or (2) if Micro
shall not continue to exist following such transaction, the
surviving entity of such transaction (which entity shall be a
Person organized, existing and in good standing under the laws of
a State of the United States) shall expressly assume Micro's
Obligations in a written agreement or undertaking satisfactory in
form and substance to Lenders holding, in the aggregate, 85% of the
Commitments or (B) the entity resulting from such transaction or
the entity with whose shareholders Micro's shares were exchanged
in such transaction shall, following such transaction, be a
Subsidiary of Micro or shall be a Person in which Micro shall, as
a result of such transaction, have acquired a direct or indirect
interest permitted to be held by Micro hereunder.
(b) No Borrower will purchase or otherwise acquire (in one
transaction or a series of related transactions) from any other Person
property or assets the aggregate purchase price of which (calculated in
Dollars) paid in cash or property (other than property consisting of
equity shares or interests or other equivalents of corporate stock of, or
partnership or other ownership interests in, any Obligor), equals or
exceeds twenty-five percent (25%) of the sum (calculated without giving
effect to such purchase or acquisition) of (i) Consolidated Funded Debt
determined as at the end of the then most recently ended Fiscal Period
plus (ii) Consolidated Stockholders' Equity determined as at the end of
the then most recently ended Fiscal Period, plus any increase thereof
attributable to any equity offerings or issuances of capital stock
occurring subsequent to the end of such Fiscal Period and prior to any
such purchase or acquisition (any such purchase or acquisition, a
"Material Asset Acquisition"), except, if no Default has occurred and
is continuing or would occur after giving effect thereto, Micro may make
a Material Asset Acquisition; provided that, prior to the consummation
of any proposed Material Asset Acquisition, Micro shall (x) notify the
Administrative Agent that it intends to make such proposed Material
Asset Acquisition and that it reasonably believes that it will be able
to certify as required by clause (y) below and (y) deliver to the
Administrative Agent a certificate duly executed and delivered by an
Authorized Person of Micro, certifying that (1) immediately upon and
following the consummation of such proposed Material Asset Acquisition,
Micro will be in compliance with each of the covenants set forth in
Sections 8.2.1 and 8.2.2 and (2) on a pro forma basis, assuming such
proposed Material Asset Acquisition had been consummated on the first
day of the most recently ended period of four Fiscal Periods for which
financial statements have been or are required to have been delivered
pursuant to Section 8.1.1, Micro would have been in compliance with each
of the covenants set forth in Section 8.2.3 as of the last day of such
period; provided further, that no purchase or acquisition of property
or assets of the character described in and permitted pursuant to clause
(c) of Section 8.2.9 shall constitute a Material Asset Acquisition.
SECTION 8.2.6. Transactions with Affiliates. No Borrower will (and no
Borrower will permit any of its Subsidiaries to), except in the ordinary
course of business, directly or indirectly, pay any funds to or for the
account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any
Indebtedness, or otherwise) in, lease, sell, transfer or otherwise dispose of
any assets, tangible or intangible, to, or participate in, or effect, any
transaction with, any Affiliate (any such payment, investment, lease, sale,
transfer, other disposition or transaction, an "Affiliate Transaction") except
on an arms-length basis on terms at least as favorable to such Borrower (or
such Subsidiary) as terms that could have been obtained from a third party who
was not an Affiliate; provided that the foregoing provisions of this Section
shall not prohibit (i) agreements with or for the benefit of employees of such
Borrower or any of its Subsidiaries regarding bridge home loans and other
loans necessitated by the relocation of such Borrower's or such Subsidiary's
business or employees, or regarding short-term hardship advances, (ii) loans
to officers or employees of such Borrower or any of its Subsidiaries in
connection with the exercise of rights under such Borrower's stock option or
stock purchase plan, (iii) any such Person from declaring or paying any lawful
dividend or other payment ratably in respect of all of its capital stock of
the relevant class so long as, in the case of Micro, after giving effect
thereto, no Default shall have occurred and be continuing, (iv) any Affiliate
Transaction pursuant to a Transition Agreement or disclosed in the Investment
Prospectus, (v) any Affiliate Transaction between Micro and any of its
Subsidiaries or between any Subsidiaries of Micro or (vi) any Affiliate
Transaction (other than any Affiliate Transaction described in clauses (i)
through (v)) in which the amount involved does not exceed $50,000; provided,
further, however, the Borrowers shall not, nor shall they permit any of their
respective Subsidiaries to, participate in or effect any Affiliate
Transactions otherwise permitted pursuant to this Section which either
individually or in the aggregate may involve obligations that are reasonably
likely to have a Material Adverse Effect. The approval by the independent
directors of the Board of Directors of the relevant Borrower (or the relevant
Subsidiary thereof) of any Affiliate Transaction to which such or such
Borrower (or the relevant Subsidiary thereof) is a party shall create a
rebuttable presumption that such Affiliate Transaction is on an arms-length
basis on terms at least as favorable to such Borrower (or the relevant
Subsidiary thereof) as terms that could have been obtained from a third party
who was not an Affiliate.
SECTION 8.2.7. Limitations on Margin Stock Acquisitions. Without first
providing the notice to the Administrative Agent and the Lenders required by
this Section 8.2.7, the Borrowers shall not (and shall not permit their
respective Subsidiaries to) acquire any outstanding stock of any U.S. or
non-U.S. corporation, limited company or similar entity of which the shares
constitute Margin Stock if after giving effect to such acquisition, Micro and
its Affiliates shall hold, in the aggregate, more than five percent (5%) of
the total outstanding stock of the issuer of such Margin Stock (the "Relevant
Issuer"). Such notice shall include the name and jurisdiction of organization
of the Relevant Issuer, the market on which such stock is traded, the total
percentage of the Relevant Issuer's stock currently held, and the purpose for
which the acquisition is being made. If any Lender Party notifies Micro,
within five Business Days of its receipt of any notice described in this
Section 8.2.7, that it elects not to fund any further Credit Extension for the
reason that such Lender Party has a substantial relationship with the Relevant
Issuer or any of its Subsidiaries or Affiliates, where, in each case, such
Credit Extension would be used to acquire or carry Margin Stock of the
Relevant Issuer, then, and notwithstanding anything to the contrary contained
in this Agreement, and subject to the consent of Micro (which consent shall
not be unreasonably withheld), such Lender Party shall have no further
obligation with respect to any Credit Extension requested after the date of
such notice from such Lender Party, the proceeds of which would be used
directly or indirectly for the purchase or carrying of such Margin Stock (it
being understood and agreed, however, that in no event shall any Lender be
required to fund more than its Percentage of any proposed Borrowing). The
acceptance by each Borrower of the proceeds of any Credit Extension shall
constitute a representation and warranty by each Borrower that no part of any
such Credit Extension will be used directly or indirectly to make any further
acquisition of the stock of any Relevant Issuer.
SECTION 8.2.8. Limitation on Sale of Trade Accounts Receivable.
Notwithstanding anything to the contrary in this Agreement, no Borrower will
(and no Borrower will permit any of its Subsidiaries to) sell, assign, grant a
Lien in, or otherwise transfer any interest in its Trade Accounts Receivable
to any Person if, after giving effect thereto, the ratio (expressed as a
percentage) of (i) Consolidated Transferred Receivables, to (ii) the sum of
Consolidated Retained Receivables plus Consolidated Transferred Receivables
shall exceed 40%.
SECTION 8.2.9. Sale of Assets. No Obligor will (and no Obligor will
permit any of its Subsidiaries to) Dispose of any property or assets other
than in the ordinary course of business, except that:
(a) Micro or any Subsidiary of Micro may Dispose of any of its
assets so long as the proceeds thereof are either (i) utilized to repay
or prepay (in accordance with the provisions of ARTICLE IV hereof)
Pro-Rata Revolving Loans (provided, that in the event the amount of such
proceeds shall exceed the aggregate principal amount of all Pro-Rata
Revolving Loans outstanding hereunder at such time, such excess proceeds
may be utilized to repay or prepay (in accordance with the provisions
hereof) other loans outstanding at such time) or (ii) so long as no
Default has occurred and is continuing or would occur after giving
effect thereto, reinvested in one or more of the businesses in which
Micro or any of its Subsidiaries is principally engaged in accordance
with Section 8.2.10 hereof;
(b) Micro or any Subsidiary of Micro may Dispose of assets which
are worn out, obsolete or surplus or otherwise have no further useful
life to Micro or any of its Subsidiaries; and
(c) so long as no Default has occurred and is continuing or
would occur after giving effect thereto, Micro and any Subsidiary of
Micro may Dispose of assets in transactions exclusively among Micro and
any of its Subsidiaries or among Subsidiaries of Micro that satisfy the
requirements of Section 8.2.6; provided, that, notwithstanding any
provision hereof to the contrary, in the event that, immediately after
giving effect to any Disposition described in this clause (c) to a
Subsidiary of Micro, such Subsidiary shall own assets constituting at
least ten percent (10%) of Consolidated Assets determined as of the last
day of the most recently completed Fiscal Period, such Subsidiary of
Micro shall be deemed a Material Subsidiary for all purposes hereunder
as of the date of such Disposition and Micro shall cause any such
Material Subsidiary promptly to execute and deliver an Additional
Guaranty in favor of the Lender Parties in accordance with Section
8.1.10; provided further, that, notwithstanding the foregoing, so long
as no Event of Default has occurred and is continuing or would occur
after giving effect thereto, (i) any Subsidiary of Micro which is not at
the time of such Disposition an Obligor may Dispose of assets in
transactions exclusively with (A) Micro, (B) any Subsidiary of Micro
which, at the time of such Disposition, is an Obligor and (C) any other
Subsidiary of Micro which is not at the time of such Disposition an
Obligor, unless, immediately after giving effect to such Disposition,
such other Subsidiary of Micro would become a Material Subsidiary and
such other Subsidiary does not, promptly after such Disposition, execute
an Additional Guaranty in accordance with Section 8.1.10 and (ii) Micro
or any Subsidiary of Micro which is at the time of such Disposition also
an Obligor may Dispose of assets in transactions exclusively with (A)
Micro and (B) any other Subsidiary of Micro which, at the time of such
Disposition, is also an Obligor.
For purposes of this Section 8.2.9 "Dispose" means sell, lease, transfer or
otherwise dispose of property but shall not include any public taking or
condemnation, and "Disposition" and "Disposed of" have corresponding meanings
to Dispose. Such terms shall not include an exchange of assets, provided that
the assets involved in such exchange are similar in function in that after
giving effect to such exchange there has not been (i) a Material Adverse
Effect, (ii) any material deterioration of cash flow generation from or in
connection with such assets, or (iii) any material deterioration in the
overall quality of plant, property and equipment of any Obligor. An
"exchange" shall be deemed to have occurred for purposes hereof if each of the
transactions involved shall have been consummated within a six month period.
SECTION 8.2.10. Limitation on Businesses. Micro and its Subsidiaries,
considered as a whole, will not engage principally in businesses other than
those conducted by Micro and its Subsidiaries on the date hereof, as described
in the Preamble of this Agreement.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default. Any of the following events
or occurrences described in this Section 9.1 shall constitute an "Event of
Default".
SECTION 9.1.1. Non-Payment of Obligations. A default shall occur in
the payment or prepayment when due (a) by any Borrower of any principal of any
Loan, (b) by any Borrower of any interest on any Loan, (c) by any Borrower of
any Reimbursement Obligation or any deposit of cash for collateral purposes
pursuant to Section 3.2.2 or 3.2.4 or (d) by any Guarantor of any Guaranteed
Obligation (as defined in such Guarantor's Guaranty), and in the case of
clause (b), (c) or (d), such default shall continue unremedied for a period of
five Business Days.
SECTION 9.1.2. Breach of Warranty. Any representation or warranty of
any Obligor made or deemed to be made hereunder or in any other Loan Document
executed by it or in any other writing or certificate furnished by or on
behalf of any Obligor to the Administrative Agent or any Lender for the
purposes of or in connection with this Agreement or any such other Loan
Document (including any certificates delivered pursuant to ARTICLE VI) is or
shall be incorrect when made in any material respect.
SECTION 9.1.3. Non-Performance of Certain Covenants and Obligations.
Any Obligor shall default in the due performance and observance of any of its
obligations under Section 8.2.2, 8.2.3, 8.2.4 or 8.2.5 (excluding any default
by Micro in the performance of its obligation to deliver, prior to the
consummation of any Material Asset Acquisition, the certificate required to
be so delivered in connection therewith pursuant to clause (y) of paragraph
(b) of Section 8.2.5).
SECTION 9.1.4. Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the payment when due of any fee or any other
Obligation not subject to Section 9.1.1, or the due performance and observance
of any other covenant, agreement or obligation contained herein or in any
other Loan Document, and such default shall continue unremedied for a period
of 30 days after Micro obtains actual knowledge thereof or notice thereof
shall have been given to Micro by the Administrative Agent or any Lender.
SECTION 9.1.5. Default on Indebtedness. A default shall occur in the
payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness of any Obligor or any of its
Subsidiaries (other than Indebtedness described in Section 9.1.1 or
Indebtedness which is non-recourse to any Obligor, or any Subsidiary of any
Obligor) having an outstanding aggregate principal amount in excess of the
lesser of (a) (i) 5% of Consolidated Tangible Net Worth for the then most
recently ended Fiscal Period, individually, or (ii) 10% of Consolidated
Tangible Net Worth for the then most recently ended Fiscal Period, in the
aggregate and (b) $75,000,000 (or the equivalent thereof in any other
currency), or a default shall occur in the performance or observance of any
obligation or condition with respect to such Indebtedness if the effect of
such default is to cause, or (with the giving of any notice or lapse of
time or both) to permit the holder or holders of such Indebtedness, or any
trustee or agent for such holders to cause, the maturity of any such
Indebtedness to be accelerated or such Indebtedness to be prepaid,
redeemed, purchased, defeased or otherwise to become due and payable prior
to its expressed maturity.
SECTION 9.1.6. Judgments. Any judgment or order for the payment of
money in excess of (individually or in the aggregate) $60,000,000 (or the
equivalent thereof in any other currency), shall be rendered against any
Obligor or any of their respective Subsidiaries and either:
(a) enforcement proceedings shall have been commenced and be
continuing by any creditor upon such judgment or order for any period of
10 consecutive days; or
(b) there shall be any period during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect.
SECTION 9.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan:
(a) the institution of any steps by any Obligor, any member of
its Controlled Group or any other Person to terminate a Pension Plan if,
as a result of such termination, any such Obligor or any such member
could be required to make a contribution in excess of $60,000,000 (or
the equivalent thereof in any other currency), to such Pension Plan, or
could reasonably expect to incur a liability or obligation in excess of
$60,000,000 (or the equivalent thereof in any other currency), to such
Pension Plan; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 9.1.8. Ownership; Board of Directors. Any Person or two or more
Persons (excluding the Family Stockholders (as defined in the Board
Representation Agreement)) acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (or any
successor regulation)) of capital stock of Micro having more than 25% of the
ordinary voting power of all capital stock of Micro then outstanding; and at
any time during any period of 25 consecutive calendar months commencing on or
after the date of this Agreement, a majority of the Board of Directors of
Micro shall no longer be composed of individuals (i) who were members of such
Board of Directors on the first day of such period, (ii) whose election or
nomination to such Board of Directors was approved by individuals referred to
in clause (i) above constituting at the time of such election or nomination at
least a majority of such Board of Directors or (iii) whose election or
nomination to such Board of Directors was approved by individuals referred to
in clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of such Board of Directors.
SECTION 9.1.9. Bankruptcy, Insolvency, etc. Any Obligor or any Material
Subsidiary shall:
(a) become insolvent or generally fail to pay, or admit in
writing its inability to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, administrative receiver, sequestrator, liquidator or
other custodian for it, its property, or make a general assignment for
the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, administrative
receiver, receiver, sequestrator, liquidator or other custodian for it
or for a substantial part of its property, and such trustee, receiver,
sequestrator, liquidator or other custodian shall not be discharged
within 60 days, provided that each Obligor and each Material Subsidiary
hereby expressly authorizes each Lender Party to appear in any court
conducting any relevant proceedings during such 60-day period to
preserve, protect and defend its rights under this Agreement and the
other Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect of any
Obligor or any Subsidiary thereof, as the case may be, and, if any
such case or proceeding is not commenced by such Person, such case or
proceeding shall be consented to or acquiesced in by such Obligor or
Material Subsidiary, as the case may be, or shall result in the entry
of an order for relief or shall remain for 60 days unstayed or
undismissed, provided that each Obligor and each Material Subsidiary
hereby expressly authorizes each Lender Party to appear in any court
conducting any such case or proceeding during such 60-day period to
preserve, protect and defend its rights under this Agreement and the
other Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of
the foregoing.
SECTION 9.1.10. Guaranties. Any of the Guaranties or any provisions
thereof shall be found or held invalid or unenforceable by a court of
competent jurisdiction or shall have ceased to be effective because of the
merger, dissolution or liquidation of a Guarantor (other than as may result
from a transaction permitted pursuant to Section 8.2.5 hereof or by reason
of a merger of a Guarantor under one Guaranty into the Guarantor under
another Guaranty) or any Guarantor shall have repudiated its obligations
under a Guaranty.
SECTION 9.2. Action if Bankruptcy. If any Event of Default described in
Section 9.1.9 shall occur, the Commitments (if not theretofore terminated)
shall automatically terminate and the outstanding principal amount of all
outstanding Loans and all other Obligations shall automatically be and become
immediately due and payable, without notice or demand.
SECTION 9.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in Section 9.1.9) shall occur for
any reason, whether voluntary or involuntary, and be continuing, the
Administrative Agent, upon the direction of the Required Lenders, shall by
notice to Micro declare all or any portion of the outstanding principal amount
of the Loans and all other Obligations to be due and payable and/or the
Commitments to be terminated, whereupon the full unpaid amount of the Loans
and all other Obligations which shall be so declared due and payable shall be
and become immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Commitments shall terminate.
SECTION 9.4. Action by Terminating Lender. If an Event of Default
shall occur because the Borrowers have failed to pay in full a Terminating
Lender, for any reason, voluntary or involuntary, the Terminating Lender
may by notice to Micro declare all or any portion of the outstanding
principal amount of the Loans made by such Terminating Lender and all other
Obligations owed to such Terminating Lender to be due and payable and/or
its commitment to be terminated, whereupon the full unpaid amount of such
Loans and all such other Obligations which shall be so declared due and
payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, its Commitment
shall terminate.
SECTION 9.5. Cash Collateral. If any Event of Default shall occur for
any reason, whether voluntary or involuntary, and shall not have been cured
or waived and shall be continuing and the Obligations are or have been
declared due and payable under Section 9.2 or 9.3, the Administrative Agent
may apply any cash collateral held by the Administrative Agent pursuant to
Section 3.2.4 to the payment of the Obligations in any order in which the
Majority Lenders may elect.
ARTICLE X
THE ADMINISTRATIVE AGENT AND
DOCUMENTATION AGENT
SECTION 10.1. Authorization and Actions. Each Lender hereby appoints
NationsBank as the Administrative Agent and Scotiabank as the Documentation
Agent under, and for the purposes set forth in, this Agreement and each other
Loan Document. Each Lender authorizes each Agent to act on behalf of such
Lender under this Agreement and each other Loan Document and, in the absence
of other written instructions from the Required Lenders received from time to
time by the Agents (with respect to which each Agent agrees that it will
comply, except as otherwise provided in this Section 10.1 or as otherwise
advised by counsel), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Agents by the terms hereof and
thereof, together with such powers as may be reasonably incidental thereto.
Each Lender hereby indemnifies (which indemnity shall survive any termination
of this Agreement) each Agent from and against such Lender's Percentage of any
and all liabilities, obligations, losses, damages, claims, costs or expenses
of any kind or nature whatsoever which may at any time be imposed on, incurred
by, or asserted against, each such Agent in any way relating to or arising out
of this Agreement or any other Loan Document (including any such liability,
etc. incurred as a result of each Agent's reliance on any information
contained in any Quarterly Report or update with respect thereto), including
reasonable attorneys' fees, and as to which either Agent is not reimbursed by
Micro or the other Obligors; provided, however, that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which are determined by a court of
competent jurisdiction in a final proceeding to have resulted solely from
either Agent's gross negligence or willful misconduct. No Agent shall be
required to take any action hereunder or under any other Loan Document, or to
prosecute or defend any suit in respect of this Agreement or any other Loan
Document, unless it is indemnified hereunder to its satisfaction. If any
indemnity in favor of either Agent shall be or become, in either Agent's
determination, inadequate, such Agent may call for additional indemnification
from the Lenders and cease to do the acts indemnified against hereunder until
such additional indemnity is given.
SECTION 10.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender
by 5:00 p.m., Eastern time, on the day prior to the making of a Pro-Rata
Revolving Loan that such Lender will not make available the amount which
would constitute its Percentage of such requested Pro-Rata Revolving Loan
on the date specified therefor, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to Micro a corresponding
amount. If and to the extent that such Lender shall not have made such
amount available to the Administrative Agent, such Lender and Micro
severally agree to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date the Administrative Agent made such amount available to Micro to the
date such amount is repaid to the Administrative Agent at an interest rate
equal to the Federal Funds Rate for the first day that the Administrative
Agent made such amounts available and thereafter at a rate of interest
equal to the interest rate applicable at the time to the requested Pro-Rata
Revolving Loan.
SECTION 10.3. Exculpation. Neither Agent nor any of their respective
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other
Loan Document, or in connection herewith or therewith, except for its own
willful misconduct or gross negligence, nor be responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor to
make any inquiry respecting the performance by any Obligor of its obligations
hereunder or under any other Loan Document. Any such inquiry which may be
made by either Agent shall not obligate it to make any further inquiry or to
take any action. Each Agent shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement
or writing which each such Agent believes to be genuine and to have been
presented by a proper Person.
SECTION 10.4. Successor. Either Agent may resign as such at any time
upon at least 30 days' prior notice to Micro and all the Lenders. If
either Agent shall at any time resign, the Required Lenders, after
consultations with Micro, may appoint another Lender as a successor
Administrative Agent or Documentation Agent, as the case may be, whereupon
such Lender shall become an Administrative Agent or Documentation Agent
hereunder, as the case may be. If no successor Administrative Agent or
Documentation Agent shall have been so appointed by the Required Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's or Documentation Agent's giving notice of
resignation, then the retiring Administrative Agent or Documentation Agent
may, on behalf of the Lenders, after consultations with Micro, appoint a
successor Administrative Agent or Documentation Agent, as the case may be,
which shall be one of the Lenders or a commercial banking institution
organized under the laws of the United States (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance
of any appointment as Administrative Agent or Documentation Agent
hereunder, as the case may be, by a successor Administrative Agent or
Documentation Agent, as the case may be, such successor Administrative
Agent or Documentation Agent shall be entitled to receive from the retiring
Administrative Agent or Documentation Agent such documents of transfer and
assignment as such successor Administrative Agent or Documentation Agent
may reasonably request, and shall thereupon succeed to and become vested
with all rights, powers, privileges and duties of the retiring
Administrative Agent or Documentation Agent, as the case may be, and the
retiring Administrative Agent or Documentation Agent shall be discharged
from its duties and obligations under this Agreement. No resignation or
removal of either the Administrative Agent or Documentation Agent pursuant
to this Section 10.4 shall be effective until the appointment of a
successor Administrative Agent or Documentation Agent, as the case may be,
has become effective. After any retiring Administrative Agent's or
Documentation Agent's resignation hereunder as an Administrative Agent or
Documentation Agent, as the case may be, the provisions of:
(a) this ARTICLE X shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Administrative Agent
or Documentation Agent under this Agreement; and
(b) Sections 11.3 and 11.4 shall continue to inure to its
benefit.
SECTION 10.5. Credit Extensions by NationsBank and Scotiabank.
NationsBank and Scotiabank shall each have the same rights and powers with
respect to the Credit Extensions made by it or any of its Affiliates in its
capacity as a Lender and may exercise the same as if it were not an Agent
hereunder. Each of NationsBank, Scotiabank and their respective Affiliates
may accept deposits from, lend money to, and generally engage in any kind
of business with any Obligor or any Subsidiary of any thereof as if it were
not an Agent hereunder.
SECTION 10.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Agents and each other Lender, and based on such Lender's
review of the financial information of each Obligor, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to make available
its Commitment and to make available any Non-Rata Credit Extensions. Each
Lender also acknowledges that it will, independently of the Agents and each
other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.
SECTION 10.7. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by any Obligor pursuant to the terms of this
Agreement or any other Loan Document (unless concurrently delivered to the
Lenders by such Obligor). The Administrative Agent will distribute to each
Lender each document or instrument received for its account, and copies of all
other communications received by the Administrative Agent from any Obligor,
for distribution to the Lenders by the Administrative Agent in accordance with
the terms of this Agreement or any other Loan Document.
SECTION 10.8. Reporting of Non-Rata Credit Extensions. Each Borrower
agrees to provide the Administrative Agent with written notice of each
Non-Rata Credit Extension concurrently with or promptly after the making of
such Non-Rata Credit Extension, which notice shall set forth, among other
things: (a) the date thereof; (b) the principal amount thereof stated in
the relevant Available Currency (and, with respect to all Available
Currencies other than the Dollar, the corresponding Dollar Amount thereof);
(c) the Interest Period applicable thereto; (d) the aggregate Dollar
Amount of such Lender's outstanding or undrawn Non-Rata Credit Extensions
as of such date; and (e) the identity of the relevant Lender. Each Lender
agrees to provide the Administrative Agent with written confirmation within
five calendar days following the last day of each calendar month (from the
date hereof until the Commitment Termination Date) of the Outstanding
Credit Extensions comprised of Non-Rata Credit Extensions made by such
Lender as of the end of such calendar month, which confirmation shall set
forth, among other things: (a) the date of each such Non-Rata Credit
Extension; (b) the principal amount or Stated Amount, as the case may be,
of each such Non-Rata Credit Extension stated in the relevant Available
Currency (and the corresponding Dollar Amount thereof), and the aggregate
Dollar Amount of all such Non-Rata Credit Extensions; (c) the respective
Interest Periods applicable thereto; and (d) the Identity of such Lender.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing
and consented to by each Borrower and the Required Lenders; provided,
however, that no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action
be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
(b) modify this Section 11.1, change the definitions of
Percentage or Required Lenders, increase the Total Credit Commitment
Amount or the Credit Commitment Amount or Percentage of any Lender,
extend the Commitment Termination Date, or, subject to Section 8.2.5,
release any Guarantor from any of its payment obligations under the
Guaranty entered into by it, shall be made without the consent of each
Lender;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any
Pro-Rata Credit Extension or the amount of any fee payable under Section
4.3 shall be made without the consent of each Lender;
(d) affect adversely the interests, rights or obligations of the
Administrative Agent in its capacity as Administrative Agent shall be
made without the consent of the Administrative Agent; or
(e) affect adversely the interests, rights or obligations of the
Documentation Agent in its capacity as the Documentation Agent shall be
made without the consent of the Documentation Agent.
No failure or delay on the part of any Lender Party in exercising any power or
right under this Agreement or any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. No notice to or demand on any Obligor in any case shall
entitle it to any notice or demand in similar or other circumstances. No
waiver or approval by any Lender Party under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval,
be applicable to subsequent transactions. No waiver or approval hereunder
shall require any similar or dissimilar waiver or approval thereafter to be
granted hereunder.
SECTION 11.2. Notices. Unless otherwise specified to the contrary, all
notices and other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing or by facsimile and
addressed, delivered or transmitted to such party at its address or facsimile
number set forth below its signature hereto or at such other address or
facsimile number as may be designated by such party in a notice to the other
parties. All notices, if mailed and properly addressed with postage prepaid
or if properly addressed and sent by prepaid courier service, shall be deemed
given when received; all notices if transmitted by facsimile shall be deemed
given when transmitted and the appropriate receipt for transmission received
by the sender thereof.
SECTION 11.3. Payment of Costs and Expenses. Micro agrees to pay on
demand all reasonable expenses (inclusive of value added tax or any other
similar tax imposed thereon) of the Agents (including the reasonable fees and
out-of-pocket expenses of the single counsel to the Agents and of local
counsel, if any, who may be retained by such counsel to the Agents) in
connection with the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document (including schedules, exhibits, and
forms of any document or instrument relevant to this Agreement or any other
Loan Document), and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from time to
time hereafter be required, whether or not the transactions contemplated hereby
are consummated.
Micro further agrees to pay, and to save the Lender Parties harmless
from all liability for, any stamp or other taxes (including, without
limitation, any registration duty imposed by Belgian law) which may be payable
in connection with the execution, delivery or enforcement of this Agreement or
any other Loan Document, and in connection with the making of any Credit
Extensions and the issuing of any Letters of Credit hereunder. Micro also
agrees to reimburse each Lender Party upon demand for all out-of-pocket
expenses (inclusive of value added tax or any other similar tax imposed
thereon and including attorneys' fees and legal expenses (including the actual
cost to such Lender Party of its in-house counsel) on a full indemnity basis)
incurred by each such Lender Party in connection with (x) the negotiation of
any restructuring or "work-out", whether or not consummated, of any
Obligations and (y) the enforcement of any Obligations; provided, however,
that Micro shall reimburse each Lender Party for the fees and legal
expenses of only one counsel for such Lender Party.
SECTION 11.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender Party and the extension of the
Commitments, the Obligors hereby jointly and severally indemnify, exonerate
and hold each Lender Party and each of their respective officers, directors,
employees and agents (collectively, the "Indemnified Parties") free and
harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses incurred in connection
therewith (irrespective of whether any such Indemnified Party is a party to
the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements, which shall include the actual
cost to such Indemnified Party of its in-house counsel but shall not include
the fees and expenses of more than one counsel to such Indemnified Party
(collectively, the "Indemnified Liabilities"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to:
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit Extension;
(b) the entering into and performance of this Agreement and any
other Loan Document by any of the Indemnified Parties (excluding,
however, any action successfully brought by or on behalf of Micro or any
other Borrower with respect to any determination by any Lender not to
fund any Credit Extension or not to comply with Section 11.15 of this
Agreement or any action by the Required Lenders to terminate or reduce
the Commitments or accelerate the Loans in violation of the terms of
this Agreement);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Obligor, or any of their
respective Subsidiaries of all or any portion of the stock or assets of
any Person, whether or not any Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by any Obligor, or any of
their respective Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by any Obligor, or any of their respective
Subsidiaries of any Hazardous Material (including any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Environmental Law), regardless of whether caused by,
or within the control of such Person;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or willful misconduct. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Obligors
hereby jointly and severally agree to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
SECTION 11.5. Survival. The obligations of Micro and each other Obligor
under Sections 5.3, 5.4, 5.5, 5.7, 11.3 and 11.4, and the obligations of the
Lenders under Sections 10.1 and 11.15, shall in each case survive any
termination of this Agreement, the payment in full of all Obligations and the
termination of the Commitments. The representations and warranties made by
Micro and each other Obligor in this Agreement and in each other Loan Document
shall survive the execution and delivery of this Agreement and each such other
Loan Document.
SECTION 11.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or such Loan
Document or affecting the validity or enforceability of such provision in
any other jurisdictions.
SECTION 11.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness; Entire
Agreement. This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement. This
Agreement shall become effective on the date when (a) counterparts hereof
executed on behalf of Micro, each Supplemental Borrower, the Agents and
each Lender (or notice thereof satisfactory to the Administrative Agent)
shall have been received by the Administrative Agent and notice thereof
shall have been given by the Administrative Agent to each Borrower and each
Lender and (b) the Administrative Agent shall have received evidence
reasonably satisfactory to it that the mergers described in clause (ii) of
Section 6.1.12 have been consummated; provided, however, that no Lender
shall have any obligation to make the initial Credit Extension until the
date (the "Effective Date") that the applicable conditions set forth in
Sections 6.1 and 6.2 have been satisfied as provided herein. This
Agreement and the other Loan Documents constitute the entire understanding
among the parties hereto with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect thereto.
SECTION 11.9. Governing Law; Submission to Jurisdiction. THIS
AGREEMENT AND EACH OTHER LOAN DOCUMENT (OTHER THAN THE COORDINATION CENTER
GUARANTY, MICRO CANADA GUARANTY (MICRO) AND MICRO CANADA GUARANTY
(COORDINATION CENTER/MICRO SINGAPORE)) SHALL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (OTHER THAN THE COORDINATION
CENTER GUARANTY, MICRO CANADA GUARANTY (MICRO) AND MICRO CANADA GUARANTY
(COORDINATION CENTER/MICRO SINGAPORE)), OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS (OTHER THAN WITH
RESPECT TO THE COORDINATION CENTER GUARANTY, MICRO CANADA GUARANTY (MICRO)
OR MICRO CANADA GUARANTY (COORDINATION CENTER/MICRO SINGAPORE)) OF THE
AGENTS, THE LENDERS, MICRO OR ANY OTHER OBLIGOR SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. MICRO
AND EACH OTHER OBLIGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED
STATED DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, FOR THE PURPOSE OF ANY SUCH LITIGATION
AS SET FORTH ABOVE, AND IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN SUCH LITIGATION BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH
OBLIGOR AT ITS ADDRESS FOR NOTICES SPECIFIED PURSUANT TO SECTION 11.2
HEREOF, IN EACH SUCH CASE MARKED FOR THE ATTENTION OF GENERAL COUNSEL,
INGRAM MICRO INC., OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
NEW YORK IN A MANNER PERMITTED BY THE LAWS OF EACH SUCH STATE. MICRO AND
EACH OTHER OBLIGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT MICRO OR ANY
OTHER OBLIGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE)
WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH SUCH OBLIGOR HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THE COORDINATION CENTER
GUARANTY, MICRO CANADA GUARANTY (MICRO) AND MICRO CANADA GUARANTY
(COORDINATION CENTER/MICRO SINGAPORE)).
SECTION 11.10. Successors and Assigns. This Agreement and each other
Loan Document shall be binding upon and shall inure to the benefit of the
parties hereto and thereto and their respective successors and assigns;
provided, however, that:
(a) no Obligor may assign or transfer its rights or obligations
hereunder or under any other Loan Document without the prior written
consent of all the Lender Parties;
(b) the rights of sale, assignment and transfer of the Lenders
are subject to Section 11.11; and
(c) the rights of the Administrative Agent and the Documentation
Agent with respect to resignation or removal are subject to Section
10.4.
SECTION 11.11. Assignments and Transfers of Interests. No Lender may
assign or sell participation interests in its Commitment or any of its Credit
Extensions or any portion thereof to any Persons except in accordance with
this Section 11.11.
SECTION 11.11.1. Assignments. Any Lender may at any time assign or
transfer to one or more Eligible Assignees, to any of its Affiliates, to
any other Lender or to any Federal Reserve Bank (each Person described in
either of the foregoing clauses as being the Person to whom such assignment
or transfer is available to be made, being hereinafter referred to as a
"Transferee Lender") all or any part of such Lender's total Credit
Extensions and Commitment (which assignment and delegation shall be of a
constant, and not a varying, percentage of all the assigning Lender's
Credit Extensions and Commitment) in a minimum aggregate amount of
$10,000,000 (or if less, the entire amount of such Lender's total Credit
Extensions and Commitment); provided, however, that, each Obligor and the
Agents shall be entitled to continue to deal solely and directly with such
Lender in connection with the interests so assigned and delegated to a
Transferee Lender until:
(a) notice of such assignment or transfer, together with payment
instructions, addresses and related information with respect to such
Transferee Lender, shall have been given to Micro and each Agent by such
Lender and such Transferee Lender;
(b) the Transferee Lender shall have executed and delivered to
Micro and each Agent, a Lender Assignment Agreement; and
(c) the processing fee described below shall have been paid.
From and after the effective date of such Lender Assignment Agreement, (x) the
Transferee Lender thereunder shall be deemed automatically to have become a
party hereto and to the extent that rights and obligations hereunder have been
assigned and delegated to such Transferee Lender in connection with such
Lender Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (y) the assignor Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents.
Within five Business Days after its receipt pursuant to clauses (a) and (b)
above of notice of such assignment and transfer and an executed Lender
Assignment Agreement, Micro shall execute and deliver to the Administrative
Agent (for delivery to the relevant Transferee Lender) new Notes evidencing
such Transferee Lender's assigned Credit Extensions and Commitments and, if
the assignor Lender has retained Credit Extensions and Commitments hereunder,
replacement Notes in the principal amount of the Credit Extensions and
Commitments retained by the assignor Lender hereunder (such Notes to be in
exchange for, but not in payment of, the Notes then held by such assignor
Lender). Each such Note shall be dated the date of the respective predecessor
Note. The assignor Lender shall mark each predecessor Note "exchanged" and
deliver each of them to Micro. Accrued interest and accrued fees shall be
paid at the same time or times provided in each predecessor Note and in this
Agreement. The Transferee Lender shall pay a processing fee in the amount of
$3,500 to the Administrative Agent upon delivery of its Lender Assignment
Agreement to the Administrative Agent. Any attempted assignment and
delegation not made in accordance with this Section 11.11.1 shall be null and
void.
SECTION 11.11.2. Participations. Any Lender may at any time sell to
one or more commercial banks or other Persons (each of such commercial
banks and other Persons being herein called a "Participant") participating
interests in any of its Credit Extensions and Commitments hereunder;
provided, however, that
(a) no participation contemplated in this Section 11.11.2 shall
relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) each Borrower and each other Obligor and the Agents shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and each other
Loan Document;
(d) no Participant, unless such Participant is an Affiliate of
such Lender or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in clause (a), (b) or
clause (c) of Section 11.1;
(e) no Borrower shall be required to pay any amount under this
Agreement that is greater than the amount which it would have been
required to pay had no participating interest been sold; and
(f) the aggregate amount of participating interests sold by any
Lender in its Credit Extensions comprised of Bid Rate Loans shall not
exceed, at any time, an amount equal to such Lender's Commitment at such
time multiplied by three.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 5.3, 5.4, 5.5, 5.7, 5.9, 5.10, 11.3 and 11.4, shall be considered a
Lender.
SECTION 11.12. Other Transactions. Nothing contained herein shall
preclude any Lender Party from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with any
Obligor or any of its Affiliates in which such Obligor or such Affiliate is
not restricted hereby from engaging with any other Person.
SECTION 11.13. Further Assurances. Each Obligor agrees to do such
further acts and things and to execute and deliver to each Lender Party
such additional assignments, agreements, powers and instruments, as such
Lender Party may reasonably require or deem advisable to carry into effect
the purposes of this Agreement or any other Loan Document or to better
assure and confirm unto such Lender Party its rights, powers and remedies
hereunder and thereunder.
SECTION 11.14. Waiver of Jury Trial. THE AGENTS, THE LENDERS, MICRO
AND EACH OTHER OBLIGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
LENDER PARTIES OR MICRO OR ANY OTHER OBLIGOR. MICRO AND EACH OTHER OBLIGOR
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF THIS
AGREEMENT AND EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER PARTIES ENTERING
INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT TO WHICH IT IS A
PARTY.
SECTION 11.15. Confidentiality. Each of the Lender Parties hereby
severally agrees with each Borrower that it will keep confidential all
information delivered to such Lender Party by or on behalf of each Borrower
or any of their respective Subsidiaries which information is known by such
Lender Party to be proprietary in nature, concerns the terms and conditions
of this Agreement or any other Loan Document, or is clearly marked or
labeled or otherwise adequately identified when received by such Lender
Party as being confidential information (all such information, collectively
for purposes of this Section, "confidential information"); provided, that,
each Lender Party shall be permitted to deliver or disclose "confidential
information": (a) to its directors, officers, employees and affiliates;
(b) to authorized agents, attorneys, auditors and other professional advisors
retained by such Lender Party that have been apprised of such Lender
Party's obligation under this Section 11.15 and have agreed to hold
confidential the foregoing information substantially in accordance with the
terms of this Section; (c) in connection with the prospective assignment or
transfer of all or any part of, or the sale of a participating interest in,
such Lender Party's Credit Extensions and Commitment, to any prospective
Transferee Lender or Participant that has been apprised of such Lender
Party's obligation under this Section 11.15 and has agreed to hold
confidential the foregoing information in accordance with the terms of this
Section; (d) to any federal or state regulatory authority having jurisdiction
over such Lender Party; (e) or to any other Person to which such delivery or
disclosure may be necessary or appropriate (i) to effect compliance with
any law, rule, regulation or order applicable to such Lender Party, (ii) in
response to any subpoena or other legal process (provided, that the
relevant Borrower shall be given notice of any such subpoena or other legal
process as soon as possible and in any event prior to production (unless
provision of any such notice would result in a violation of any such
subpoena or other legal process), and the Lender Party receiving such
subpoena or other legal process shall cooperate with such Borrower, at such
Borrower's expense, in seeking a protective order to prevent or limit such
disclosure), or (iii) in connection with any litigation to which such
Lender Party is a party.
For purposes hereof, the term "confidential information" does not
include any information that: (A) was publicly known or otherwise known by any
Lender Party on a non-confidential basis from a source other than the relevant
Borrower prior to the time such information is delivered or disclosed to such
Lender Party by the relevant Borrower; (B) subsequently becomes publicly known
through no act or omission by any Lender Party or any Person acting on behalf
of any Lender Party; (C) otherwise becomes known to a Lender Party other than
through disclosure by the relevant Borrower (or any Subsidiary thereof) or
through someone subject, to such Lender Party's knowledge, to a duty of
confidentiality to the relevant Borrower; or (D) constitutes financial
statements that are otherwise publicly available.
SECTION 11.16. Release of Subsidiary Guarantors and Supplemental
Borrowers.
(a) Upon receipt by the Agents of (i) a certificate from a
senior officer of Micro certifying as of the date thereof that, after
the consummation of the transaction or series of transactions described
in such certificate (which transactions, individually and in the
aggregate, shall be certified to be in compliance with the terms and
conditions of this Agreement, including the covenants contained in
Sections 8.2.5, 8.2.6 and 8.2.9), the Guarantor identified in such
certificate is no longer a Subsidiary of Micro, and (ii) such additional
information, approvals, opinions, documents or instruments relating to
the matters addressed in such certificate as the Agents shall reasonably
request, such Guarantor's Guaranty shall automatically terminate so long
as there shall exist no Default immediately prior to, as a result of, or
after giving effect to, such termination. In all events, all other
Guaranties shall remain in full force and effect. Each Lender Party
shall, at Micro's expense, execute such documents as Micro shall
reasonably request to evidence such termination.
(b) Upon receipt by the Agents of (i) a certificate from a
senior officer of Micro certifying as of the date thereof that, after
the consummation of the transaction or series of transactions described
in such certificate (which transactions, individually and in the
aggregate, shall be certified to be in compliance with the terms and
conditions of this Agreement, including the covenants contained in
Sections 8.2.5, 8.2.6 and 8.2.9), the Supplemental Borrower identified
in such certificate is no longer a Subsidiary of Micro, (ii) such
additional information, approvals, opinions, documents or instruments
relating to the matters addressed in such certificate as the Agents
shall reasonably request, and (iii) payment in full of any Outstanding
Credit Extensions made by any Lender in favor of such Supplemental
Borrower and satisfaction of any Obligations of such Supplemental
Borrower under the Loan Documents, such Supplemental Borrower shall
automatically cease to be a party to this Agreement so long as there
shall exist no Default immediately prior to, as a result of, or after
giving effect to, such cessation. In all events, this Agreement shall
remain in full force and effect as among the remaining parties hereto.
Each Lender Party shall, at Micro's expense, execute such documents as
Micro shall reasonably request to evidence such cessation.
SECTION 11.17. Collateral. Each of the Lenders represents to the
Administrative Agent and each of the other Lenders that it in good faith is
not relying upon any Margin Stock as collateral in the extension or
maintenance of the credit provided for in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of
the day and year first above written.
BORROWERS AND GUARANTORS:
INGRAM MICRO INC.
By /s/ James F. Ricketts
---------------------------------------
Name: James F. Ricketts
Title: Vice President & Treasurer
Address: 1600 E. St. Andrew Place
Santa Ana, CA 92705
Facsimile No: 714-566-9447
Attention: James F. Ricketts
INGRAM EUROPEAN COORDINATION
CENTER N.V.
By /s/ M. J. Grainger
---------------------------------------
Name: M. J. Grainger
Title: Authorized Representative
Address: Leuvensesteenweg 11
1932 Sint Stevens Woluwe
Belgium
Facsimile No: 011-32-2-725-1511
Attention: Thierry Denaisse
INGRAM MICRO SINGAPORE PTE LTD.
By /s/ M. J. Grainger
---------------------------------------
Name: M. J. Grainger
Title: Attorney
Address: 143 Cecil Street, #07-03/04
GB Building
Singapore 069542
Facsimile No: 011-65-226-5337
Attention: Ng Peng Tea
INGRAM MICRO INC.,
an Ontario, Canada corporation
By /s/ M. J. Grainger
---------------------------------------
Name: M. J. Grainger
Title: Authorized Representative
Address: 230 Barmac Drive
Weston, Ontario
Canada M9L 2Z3
Facsimile No: 416-740-8623
Attention: Robert E. Carbrey
Initial
Commitment
Percentage Amount
8.250% $82,500,000 THE LENDER PARTIES:
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent and as a Lender
By /s/ Stan W. Reynolds
---------------------------------------
Name: Stan W. Reynolds
Title: Vice President
LIBOR
Office: 901 Main Street
13th Floor
Dallas, Texas 75202
Facsimile No: 214-508-2515
Attention: Agency Services
Domestic
Office: 901 Main Street
13th Floor
Dallas, Texas 75202
Facsimile No: 214-508-2515
Attention: Agency Services
Address for
Notices: 901 Main Street
13th Floor
Dallas, Texas 75202
Facsimile No: 214-508-2515
Attention: Agency Services
Address for Payment of Fees:
901 Main Street
13th Floor
Dallas, Texas 75202
Facsimile No: 214-508-2515
Attention: Agency Services
Initial
Commitment
Percentage Amount
8.250% $82,500,000 THE BANK OF NOVA SCOTIA,
as Documentation Agent and as a Lender
By /s/ P. M. Brown
---------------------------------------
Name: P. M. Brown
Title: Relationship Manager
LIBOR
Office: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No: 404-888-8998
Attention: Amanda Norsworthy
Domestic
Office: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No: 404-888-8998
Attention: Amanda Norsworthy
Address for
Notices: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No: 404-888-8998
Attention: Amanda Norsworthy
Address for Payment of Fees:
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Facsimile No: 404-888-8998
Attention: Amanda Norsworthy
Initial
Commitment
Percentage Amount
6.500% $65,000,000 THE CHASE MANHATTAN BANK,
as a Co-Agent and as a Lender
By /s/ Peter C. Eckstein
---------------------------------------
Name: Peter C. Eckstein
Title: Vice President
LIBOR
Office: The Chase Manhattan Bank
Grand Central Towers
29th Floor
New York, New York 10017
Facsimile No: 212-622-0854
Attention: Andrew Stasiw
Domestic
Office: The Chase Manhattan Bank
Grand Central Towers
29th Floor
New York, New York 10017
Facsimile No: 212-622-0854
Attention: Andrew Stasiw
Address for
Notices: The Chase Manhattan Bank
Grand Central Towers
29th Floor
New York, New York 10017
Facsimile No: 212-622-0854
Attention: Andrew Stasiw
Address for Payment of Fees:
Loan Services
52 Broadway
New York, NY 10004
Facsimile No: 212-701-5090
Attention: John Knapp
Initial
Commitment
Percentage Amount
6.500% $65,000,000 DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK, CAYMAN
ISLANDS BRANCH,
as a Co-Agent and as a Lender
By /s/ J. W. Somers
---------------------------------------
Name: J. W. Somers
Title: S.V.P. and Manager
By /s/ William S. Bartlett
---------------------------------------
Name: William S. Bartlett
Title: AVP
LIBOR
Office: DG BANK New York
DG BANK Building
609 Fifth Avenue
New York, NY 10017-1021
Facsimile No: 212-745-1556
Attention: Karen Brinkman
Domestic
Office: DG BANK New York
DG BANK Building
609 Fifth Avenue
New York, NY 10017-1021
Facsimile No: 212-745-1556
Attention: Karen Brinkman
Address for
Notices: DG BANK Atlanta Agency
303 Peachtree Street, N.E.
Suite 2900
Atlanta, GA 30308
Facsimile No: 404-524-4006
Attention: John Somers
Address for Payment of Fees:
DG Bank New York
DG Bank Building
609 Fifth Avenue
New York, NY 10017-1021
Facsimile No: 212-745-1556
Attention: Beverly Magee
Initial
Commitment
Percentage Amount
6.500% $65,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and as a Lender
By /s/ Kathleen Comella
---------------------------------------
Name: Kathleen Comella
Title: Vice President
LIBOR
Office: One First National Plaza
Suite 0167, 1-10
Chicago, Illinois 60670
Facsimile No: 312-732-5435
Attention: Kathy Comella
Domestic
Office: One First National Plaza
Suite 0167, 1-10
Chicago, Illinois 60670
Facsimile No: 312-732-5435
Attention: Kathy Comella
Address for
Notices: One First National Plaza
Suite 0167, 1-10
Chicago, Illinois 60670
Facsimile No: 312-732-5435
Attention: Kathy Comella
Address for Payment of Fees:
One First National Plaza
Suite 0634, 1-10
Chicago, Illinois 60670
Facsimile No: 312-732-4840
Attention: Mattie Reed
Initial
Commitment
Percentage Amount
6.500% $65,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, ATLANTA AGENCY,
as a Co-Agent and as a Lender
By /s/ Kazuo Iida
---------------------------------------
Name: Kazuo Iida
Title: General Manager
LIBOR
Office: One Ninety One Peachtree Tower
191 Peachtree Street, N.E.
Suite 3600
Atlanta, GA 30303-1757
Facsimile No: 404-524-8509
Attention: James Masters
Domestic
Office: One Ninety One Peachtree Tower
191 Peachtree Street, N.E.
Suite 3600
Atlanta, GA 30303-1757
Facsimile No: 404-524-8509
Attention: James Masters
Address for
Notices: One Ninety One Peachtree Tower
191 Peachtree Street, N.E.
Suite 3600
Atlanta,GA 30303-1757
Facsimile No: 404-524-8509
Attention: James Masters
Address for Payment of Fees:
One Ninety One Peachtree Tower
191 Peachtree Street, N.E.
Suite 3600
Atlanta, GA 30303-1757
Facsimile No: 404-524-8509
Attention: James Masters
Initial
Commitment
Percentage Amount
6.500% $65,000,000 ROYAL BANK OF CANADA,
as a Co-Agent and as a Lender
By /s/ Michael Cole
---------------------------------------
Name: Michael Cole
Title: Manager
LIBOR
Office: 600 Wilshire Boulevard
Suite 800
Los Angeles, CA 90017
Facsimile No: 213-955-5350
Attention: Michael Cole
Domestic
Office: 600 Wilshire Boulevard
Suite 800
Los Angeles, CA 90017
Facsimile No: 213-955-5350
Attention: Michael Cole
Address for
Notices: 1 Financial Square
23rd Floor
New York, NY 10005-3531
Facsimile No: 212-428-2372
Attention: Linda Smith
Loan Administrator
Address for Payment of Fees:
1 Financial Square
23rd Floor
New York, NY 10005-3531
Facsimile No: 212-428-2372
Attention: Linda Smith
Loan Administrator
Initial
Commitment
Percentage Amount
5.000% $50,000,000 THE FUJI BANK, LIMITED,
LOS ANGELES AGENCY
By /s/ Nobuhiro Umemura
---------------------------------------
Name: Nobuhiro Umemura
Title: Joint General Manager
LIBOR
Office: 333 S. Hope Street
39th Floor
Los Angeles, CA 90071
Facsimile No: 213-253-4198
Attention: Corporate Finance Group
Domestic
Office: 333 S. Hope Street
39th Floor
Los Angeles, CA 90071
Facsimile No: 213-253-4198
Attention: Corporate Finance Group
Address for
Notices: 333 S. Hope Street
39th Floor
Los Angeles, CA 90071
Facsimile No: 213-253-4198
Attention: Tami Kita
Address for Payment of Fees:
333 S. Hope Street
39th Floor
Los Angeles, CA 90071
Facsimile No: 213-253-4198
Attention: Corporate Finance Group
Initial
Commitment
Percentage Amount
4.000% $40,000,000 ABN-AMRO BANK, N.V.
By /s/ Steven L. Hipsman
---------------------------------------
Name: Steven Hipsman
Title: Vice President
By /s/ Larry Kelley
---------------------------------------
Name: Larry Kelley
Title: Group Vice President
LIBOR
Office: One Ravinia Drive
Suite 1200
Atlanta, GA 30346
Facsimile No: 770-395-9188
Attention: Reenie Williamson
Domestic
Office: One Ravinia Drive
Suite 1200
Atlanta, GA 30346
Facsimile No: 770-395-9188
Attention: Reenie Williamson
Address for
Notices: One Ravinia Drive
Suite 1200
Atlanta, GA 30346
Facsimile No: 770-399-0066
Attention: Patrick A. Thom
Address for Payment of Fees:
One Ravinia Drive
Suite 1200
Atlanta, GA 30346
Facsimile No: 770-395-9188
Attention: Reenie Williamson
Initial
Commitment
Percentage Amount
4.000% $40,000,000 BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION
By /s/ Kevin McMahon
---------------------------------------
Name: Kevin McMahon
Title: Managing Director
LIBOR
Office: 1850 Gateway Boulevard
Concord, CA 94521
Facsimile No: 510-675-7531
Attention: Daryl Hurst
Domestic
Office: 1850 Gateway Boulevard
Concord, CA 94521
Facsimile No: 510-675-7531
Attention: Daryl Hurst
Address for Notices other than Notice of
Borrowing or Notices of Conversion or
Continuation:
High Technology #3697
555 California Street
41st Floor
San Francisco, CA 94104
Facsimile No: 415-622-2514
Attention: Kevin McMahon
Address for Payment of Fees:
1850 Gateway Boulevard
Concord, CA 94521
Facsimile No: 510-675-7531
Attention: Daryl Hurst
Initial
Commitment
Percentage Amount
4.000% $40,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Robert Ivosevich
---------------------------------------
Name: Robert Ivosevich
Title: Senior Vice President
LIBOR
Office: 1301 Avenue of the Americas
New York, NY 10019
Facsimile No: 404-584-5249
Attention: David Cawrse
Domestic
Office: 1301 Avenue of the Americas
New York, NY 10019
Facsimile No: 404-584-5249
Attention: David Cawrse
Address for
Notices: Credit Lyonnais Atlanta Agency
303 Peachtree Street, N.E.
Suite 4400
Atlanta, GA 30308
Facsimile No: 404-584-5249
Attention: David Cawrse
Address for Payment of Fees:
Credit Lyonnais Atlanta Agency
303 Peachtree Street, N.E.
Suite 4400
Atlanta, GA 30308
Facsimile No: 404-584-5249
Attention: Lisa Cline
Initial
Commitment
Percentage Amount
4.000% $40,000,000 THE DAI-ICHI KANGYO BANK, LTD.,
LOS ANGELES AGENCY
By /s/ Masatsugu Morishita
---------------------------------------
Name: Masatsugu Morishita
Title: Sr. Vice President &
Joint General Manager
LIBOR
Office: 555 West Fifth Street
5th Floor
Los Angeles, CA 90013
Facsimile No: 213-243-4848
Attention: Hollie Luong
Domestic
Office: 555 West Fifth Street
5th Floor
Los Angeles, CA 90013
Facsimile No: 213-243-4848
Attention: Hollie Luong
Address for
Notices: 555 West Fifth Street
5th Floor
Los Angeles, CA 90013
Facsimile No: 213-243-4848
Attention: Hollie Luong
Address for Payment of Fees:
555 West Fifth Street
5th Floor
Los Angeles, CA 90013
Facsimile No: 213-243-4848
Attention: Hollie Luong
Initial
Commitment
Percentage Amount
4.000% $40,000,000 THE SAKURA BANK, LIMITED
By /s/ Fernando Buesa
---------------------------------------
Name: Fernando Buesa
Title: Vice President
By /s/ Ofusa Sato
---------------------------------------
Name: Ofusa Sato
Title: Senior Vice President
General Manager
LIBOR
Office: 515 South Figueroa Street
Suite 400
Los Angeles, CA 90071
Facsimile No: 213-623-8692
Attention: Fernando Buesa
Domestic
Office: 515 South Figueroa Street
Suite 400
Los Angeles, CA 90071
Facsimile No: 213-623-8692
Attention: Fernando Buesa
Address for
Notices: 515 South Figueroa Street
Suite 400
Los Angeles, CA 90071
Facsimile No: 213-623-8692
Attention: Emiko Nagai
Loan Administrator
Address for Payment of Fees:
515 South Figueroa Street
Suite 400
Los Angeles, CA 90071
Facsimile No: 213-623-8692
Attention: Emiko Nagai
Loan Administrator
Initial
Commitment
Percentage Amount
2.500% $25,000,000 COMMERZBANK AKTIENGESELLSCHAFT,
LOS ANGELES BRANCH
By /s/ Christian Jagenburg
---------------------------------------
Name: Christian Jagenburg
Title: Senior Vice President & Manager
By /s/ Steven F. Larsen
---------------------------------------
Name: Steven F. Larsen
Title: Vice President
LIBOR
Office: Commerzbank AG, Los Angeles Branch
660 S. Figueroa, Suite 1450
Los Angeles, CA 90017
Facsimile No: 213-623-0039
Attention: Steven F. Larsen
Domestic
Office: Commerzbank AG, Los Angeles Branch
660 S. Figueroa, Suite 1450
Los Angeles, CA 90017
Facsimile No: 213-623-0039
Attention: Steven F. Larsen
Address for
Notices: Commerzbank AG, Los Angeles Branch
660 S. Figueroa, Suite 1450
Los Angeles, CA 90017
Facsimile No: 213-623-0039
Attention: Steven F. Larsen
Address for Payment of Fees:
Commerzbank AG, New York Branch
2 World Financial Center
New York, New York 10281-1050
Facsimile No: 212-266-7593
Attention: Christina Humphrey
Initial
Commitment
Percentage Amount
2.500% $25,000,000 THE MITSUBISHI TRUST AND BANKING
CORPORATION, LOS ANGELES AGENCY
By /s/ Yasushi Satomi
---------------------------------------
Name: Yasushi Satomi
Title: Senior Vice President
LIBOR
Office: 801 South Figueroa Street
Suite 500
Los Angeles, CA 90017
Facsimile No: 213-687-4631
Attention: Jill Kato
Domestic Office: 801 South Figueroa Street
Suite 500
Los Angeles, CA 90017
Facsimile No: 213-687-4631
Attention: Jill Kato
Address for
Notices: 801 South Figueroa Street
Suite 500
Los Angeles, CA 90017
Facsimile No: 213-687-4631
Attention: Jill Kato
Address for Payment of Fees:
801 South Figueroa Street
Suite 500
Los Angeles, CA 90017
Facsimile No: 213-629-2571
Attention: Yvonne Yoon
Initial
Commitment
Percentage Amount
2.000% $20,000,000 BANCA COMMERCIALE ITALIANA,
LOS ANGELES FOREIGN BRANCH
By /s/ Richard R. Iwanicki
---------------------------------------
Name: Richard R. Iwanicki
Title: V.P.
By /s/ E. Bombieri
---------------------------------------
Name: E. Bombieri
Title: V.P. & Manager
LIBOR
Office: Banca Commerciale Italiana
Los Angeles Foreign Branch
555 S. Flower Street, #4300
Los Angeles, CA 90071
Facsimile No: 213-624-0457
Attention: Richard E. Iwanicki
Domestic
Office: Banca Commerciale Italiana
Los Angeles Foreign Branch
555 S. Flower Street, #4300
Los Angeles, CA 90071
Facsimile No: 213-624-0457
Attention: Richard E. Iwanicki
Address for
Notices: Banca Commerciale Italiana
Los Angeles Foreign Branch
555 S. Flower Street, #4300
Los Angeles, CA 90071
Facsimile No: 213-624-0457
Attention: Richard E. Iwanicki
Address for Payment of Fees:
Banca Commerciale Italiana
Los Angeles Foreign Branch
555 S. Flower Street, #4300
Los Angeles, CA 90071
Facsimile No: 213-624-0457
Attention: Richard E. Iwanicki
Initial
Commitment
Percentage Amount
2.000% $20,000,000 BANQUE NATIONALE DE PARIS
By /s/ Clive Bettles
---------------------------------------
Name: Clive Bettles
Title: Senior Vice President
and Manager
By /s/ Tjalling Terpstra
---------------------------------------
Name: Tjalling Terpstra
Title: Vice President
LIBOR
Office: 725 South Figueroa Street
Suite #2090
Los Angeles, CA 90017
Facsimile No: 213-488-9602
Attention: Tjalling Terpstra
Domestic
Office: 725 South Figueroa Street
Suite #2090
Los Angeles, CA 90017
Facsimile No: 213-488-9602
Attention: Tjalling Terpstra
Address for
Notices: Banque Nationale de Paris
Treasury Department
180 Montgomery Street
San Francisco, CA 94104
Facsimile No: 415-989-9041
Attention: Don Hart
with a copy to:
Tjalling Terpstra
Banque Nationale de Paris
725 South Figueroa Street
Suite #2090
Los Angeles, CA 90017
Address for Payment of Fees:
The Federal Reserve Bank of San Francisco
c/o Banque Nationale de Paris
725 South Figueroa Street
Suite #2090
Los Angeles, CA 90017
Attention: Paggie Wong
Initial
Commitment
Percentage Amount
2.000% $20,000,000 COMERICA BANK
By /s/ Dirk Price
---------------------------------------
Name: Dirk Price
Title: Vice President
LIBOR
Office: 1920 Main Street
Suite 1150
Irvine, CA 92714
Facsimile No: 714-476-1222
Attention: Dirk A. Price
Domestic
Office: 1920 Main Street
Suite 1150
Irvine, CA 92714
Facsimile No: 714-476-1222
Attention: Dirk A. Price
Address for
Notices: 1920 Main Street
Suite 1150
Irvine, CA 92714
Facsimile No: 714-476-1222
Attention: Dirk A. Price
Address for Payment of Fees:
500 Woodward Avenue
9th Floor
Detroit, MI 48226
Facsimile No: 313-222-9434
Attention: Debra J. Clark
Customer Assistant
Initial
Commitment
Percentage Amount
2.000% $20,000,000 DEN DANSKE BANK AKTIESELSKAB
CAYMAN ISLANDS BRANCH
By /s/ Peter L. Hargraves
---------------------------------------
Name: Peter L. Hargraves
Title: Vice President
By /s/ John A. O'Neill
---------------------------------------
Name: John A. O'Neill
Title: Vice President
LIBOR
Office: Den Danske Bank Aktieselskab
Cayman Islands Branch
c/o Den Danske Bank, New York Branch
4th Floor East Building
280 Park Avenue
New York, New York 10017
Facsimile No: 212-599-2493
Attention: Maria Webb
Domestic
Office: Den Danske Bank Aktieselskab
Cayman Islands Branch
c/o Den Danske Bank, New York Branch
4th Floor East Building
280 Park Avenue
New York, New York 10017
Facsimile No: 212-599-2493
Attention: Maria Webb
Address for
Notices:
Den Danske Bank Aktieselskab
Cayman Islands Branch
c/o Den Danske Bank, New York Branch
4th Floor East Building
280 Park Avenue
New York, New York 10017
Facsimile No: 212-599-2493
Attention: Maria Webb
Address for Payment of Fees:
Den Danske Bank Aktieselskab
Cayman Islands Branch
c/o Den Danske Bank, New York Branch
4th Floor East Building
280 Park Avenue
New York, New York 10017
Facsimile No: 212-599-2493
Attention: Maria Webb
Initial
Commitment
Percentage Amount
2.000% $20,000,000 FIRST AMERICAN NATIONAL BANK
By /s/ Corey Napier
---------------------------------------
Name: Corey Napier
Title: Vice President
LIBOR
Office: First American National Bank
First American Center
Nashville, TN 37238-0310
Facsimile No: 615-748-6072
Attention: Corey Napier
Domestic
Office: First American National Bank
First American Center
Nashville, TN 37238-0310
Facsimile No: 615-748-6072
Attention: Corey Napier
Address for
Notices: First American National Bank
First American Center
3rd Floor
Nashville, TN 37238-0310
Facsimile No: 615-748-6098
Attention: Frensia Joy
Address for Payment of Fees:
First American National Bank
First American Center
Commercial Loan Operations
Nashville, TN 37238-0310
Facsimile No: 615-748-6098
Attention: Frensia Joy
Initial
Commitment
Percentage Amount
2.000% $20,000,000 GENERALE BANK, S.A./N.V.
By /s/ E. Matthews
---------------------------------------
Name: E. Matthews
Title: SVP
By /s/ P. Pollaera
---------------------------------------
Name: P. Pollaera
Title: SVP
LIBOR
Office: Generale Bank, S.A./N.V.
520 Madison Avenue
41st Floor
New York, New York 10022
Facsimile No: 212-750-9503
Attention: Douglas Riahi
Domestic
Office: Generale Bank, S.A./N.V.
520 Madison Avenue
41st Floor
New York, New York 10022
Facsimile No: 212-750-9503
Attention: Douglas Riahi
Address for
Notices: Generale Bank, S.A./N.V.
520 Madison Avenue
41st Floor
New York, New York 10022
Facsimile No: 212-750-9503
Attention: Douglas Riahi
Address for Payment of Fees:
Generale Bank, S.A./N.V.
520 Madison Avenue
41st Floor
New York, New York 10022
Facsimile No: 212-750-9503
Attention: Douglas Riahi
Initial
Commitment
Percentage Amount
2.000% $20,000,000 KREDIETBANK N.V., GRAND CAYMAN
BRANCH
By /s/ Robert Snauffer
---------------------------------------
Name: Robert Snauffer
Title: Vice President
By /s/ Raymond F. Murray
---------------------------------------
Name: Raymond F. Murray
Title: Vice President
LIBOR
Office: Kredietbank N.V.
New York Branch
125 West 55th Street
10th Floor
New York, NY 10019
Facsimile No: 212-956-5580
Attention: Robert Snauffer
Domestic
Office: Kredietbank N.V.
New York Branch
125 West 55th Street
10th Floor
New York, NY 10019
Facsimile No: 212-956-5580
Attention: Robert Snauffer
Address for
Notices: Kredietbank
Los Angeles Representative Office
550 South Hope Street
Suite 1775
Los Angeles, CA 90071
Facsimile No: 213-629-5801
Attention: Roxanne Cheng
Vice President
Address for Payment of Fees:
Kredietbank N.V.
New York Branch
125 West 55th Street
10th Floor
New York, NY 10019
Facsimile No: 212-956-5580
Attention: Lynda Resuman
Loan Operator
Initial
Commitment
Percentage Amount
2.000% $20,000,000 THE SANWA BANK, LIMITED
LOS ANGELES BRANCH
By /s/ Virginia Hart
---------------------------------------
Name: Virginia Hart
Title: Vice President
LIBOR
Office: 601 S. Figueroa Street
Los Angeles, CA 90017
Facsimile No: 213-623-4912
Attention: Virginia Hart
Domestic
Office: 601 S. Figueroa Street
Los Angeles, CA 90017
Facsimile No: 213-623-4912
Attention: Virginia Hart
Address for
Notices: 601 S. Figueroa Street
Los Angeles, CA 90017
Facsimile No: 213-623-4912
Attention: Virginia Hart
Address for Payment of Fees:
601 S. Figueroa Street
Los Angeles, CA 90017
Facsimile No: 213-623-4912
Attention: Washington Boza
Loan Operations
Initial
Commitment
Percentage Amount
2.000% $20,000,000 SUNTRUST BANK, ATLANTA
By /s/ Kristina L. Anderson
---------------------------------------
Name: Kristina L. Anderson
Title: Asst. Vice President
By /s/ Charles J. Johnson
---------------------------------------
Name: Charles J. Johnson
Title: Vice President
LIBOR
Office: 25 Park Place, N.E.
Atlanta, GA 30303
Facsimile No: 404-588-8505
Attention: Kathy Perkerson
Domestic
Office: 25 Park Place, N.E.
Atlanta, GA 30303
Facsimile No: 404-588-8505
Attention: Kathy Perkerson
Address for
Notices: 25 Park Place, N.E.
Atlanta, GA 30303
Facsimile No: 404-588-8505
Attention: Kris Anderson
Address for Payment of Fees:
25 Park Place, N.E.
Atlanta, GA 30303
Facsimile No: 404-588-8505
Attention: Kathy Perkerson
Initial
Commitment
Percentage Amount
2.000% $20,000,000 UNITED STATES NATIONAL BANK OF
OREGON
By /s/ Derek Ridgley
---------------------------------------
Name: Derek Ridgley
Title: Assistant Vice President
LIBOR
Office: 555 S.W. Oak Street
PL-4
Portland, OR 97204
Facsimile No: 503-275-5428
Attention: Derek W. Ridgley
Domestic
Office: 555 S.W. Oak Street
PL-4
Portland, OR 97204
Facsimile No: 503-275-5428
Attention: Derek W. Ridgley
Address for
Notices: 555 S.W. Oak Street
PL-4
Portland, OR 97204
Facsimile No: 503-275-5428
Attention: Derek W. Ridgley
Address for Payment of Fees:
555 S.W. Oak Street
PL-7 Note Department
Portland, OR 97204
Attention: Participation Specialist
Initial
Commitment
Percentage Amount
1.000% $10,000,000 ISTITUTO BANCARIO SAN PAOLO DI
TORINO S.P.A.
By /s/ Robert S. Wurster
---------------------------------------
Name: Robert S. Wurster
Title: First Vice President
By /s/ William J. De Angelo
---------------------------------------
Name: William J. De Angelo
Title: First Vice President
LIBOR
Office: 245 Park Avenue
35th Floor
New York, NY 10167
Facsimile No: 212-599-5303
Attention: Carmela Romanello-Schaden
Domestic
Office: 245 Park Avenue
35th Floor
New York, NY 10167
Facsimile No: 212-599-5303
Attention: Carmela Romanello-Schaden
Address for Notices other than Notice of
Borrowing or Notice of Conversion:
444 S. Flower Street
Suite 4550
Los Angeles, CA 90071
Facsimile No: 213-622-2514
Attention: Annette Bergsten
Address for Payment of Fees:
245 Park Avenue
35th Floor
New York, NY 10167
Facsimile No: 212-599-5303
Attention: Carmela Romanello-Schaden
EXHIBIT 10.13
AMENDED AND RESTATED REORGANIZATION AGREEMENT
among
INGRAM INDUSTRIES INC.,
INGRAM MICRO INC.,
and
INGRAM ENTERTAINMENT INC.
TABLE OF CONTENTS(1)
Page
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions...................................... 1
_________________
(1) The Table of Contents is not a part of this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
SECTION 2.1. Corporate Existence and Power.................... 3
SECTION 2.2. Corporate Authorization.......................... 3
SECTION 2.3. Governmental Authorization....................... 3
SECTION 2.4. Non-Contravention................................ 4
ARTICLE 3
CERTAIN LIABILITIES; CERTAIN ASSETS
SECTION 3.1. Assumed Liabilities.............................. 4
SECTION 3.2. Certain Contingent Assets........................ 8
SECTION 3.3. Certain Adjustments.............................. 9
ARTICLE 4
GENERAL COVENANTS
SECTION 4.1. Conduct of the Business.......................... 10
SECTION 4.2. Access; Confidentiality.......................... 11
SECTION 4.3. Best Efforts; Further Assurances................. 12
SECTION 4.4. Loans; Repurchase Agreements..................... 12
SECTION 4.5. Cross-Guarantees................................. 13
SECTION 4.6. Public Announcements............................. 14
SECTION 4.7. Notices of Certain Events........................ 14
ARTICLE 5
SURVIVAL; INDEMNIFICATION
SECTION 5.1. Survival......................................... 15
SECTION 5.2. Indemnification.................................. 15
SECTION 5.3. Procedures....................................... 15
ARTICLE 6
TERMINATION
SECTION 6.1. Grounds for Termination.......................... 17
SECTION 6.2. Effect of Termination............................ 17
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Headings......................................... 17
SECTION 7.2. Entire Agreement................................. 17
SECTION 7.3. Notices.......................................... 18
SECTION 7.4. Applicable Law................................... 18
SECTION 7.5. Severability..................................... 18
SECTION 7.6. Successors, Assigns, Transferees................. 18
SECTION 7.7. Counterparts..................................... 19
SECTION 7.8. Amendments and Waivers........................... 19
SECTION 7.9. Consent to Jurisdiction.......................... 19
EXHIBITS
Exhibit I - Form of Master Services Agreement
Exhibit II - Form of Risk Management Agreement
Exhibit III - Form of Data Center Services Agreement
Exhibit IV - Form of Tax Sharing and Tax Services Agreement
Exhibit V - Form of Employee Benefits Transfer and Assumption
Agreement
AMENDED AND RESTATED REORGANIZATION AGREEMENT
AGREEMENT dated as of September 4, 1996, as amended and
restated as of October 17, 1996, among Ingram Industries Inc., a Tennessee
corporation ("Industries"), Ingram Micro Inc., a Delaware corporation
("Micro"), and Ingram Entertainment Inc., a Tennessee corporation
("Entertainment" and, together with Industries and Micro, the "Ingram
Companies").
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. (a) The following terms, as
used herein, have the following meanings:
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with such other Person; provided that for purposes of this
Agreement no Ingram Company shall be deemed an Affiliate of any other
Ingram Company. For purposes of this definition, the term "control", when
used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through ownership of voting
securities, by contract or otherwise, and the terms "controlling",
"controlled by" and "under common control with" have meanings correlative
to the foregoing.
"Ancillary Agreements" means (i) the Master Services Agreement
substantially in the form attached as Exhibit I hereto, (ii) the Risk
Management Agreement substantially in the form attached as Exhibit II
hereto, (iii) the Data Center Services Agreement substantially in the form
attached as Exhibit III hereto, (iv) the Tax Sharing and Tax Services
Agreement substantially in the form attached as Exhibit IV hereto and (v)
the Employee Benefits Transfer and Assumption Agreement substantially in
the form attached as Exhibit V hereto. [Names of these Agreements will be
changed to reflect amendments and restatements thereof, if necessary.]
"Carrying Cost" means, with respect to any investment, the
carrying cost of such investment from the date specified in Article 3 with
respect to such investment to the date of disposition of such investment,
calculated by Industries on the basis of the average borrowing rate of
Industries during such period as published from time to time by the
Industries treasury department as applied to the amount of Industries'
invested capital from time to time with respect to such investment.
"Covered Person" means (i) with respect to Micro, each
Subsidiary of Micro, (ii) with respect to Entertainment, each Subsidiary of
Entertainment and (iii) with respect to Industries, each business operating
unit of Industries and each Subsidiary of Industries (other than Micro,
Entertainment and their respective Subsidiaries); provided that "Covered
Person" shall in no event include Cactus, Magnolia or IMS.
"Effective Time" means the effective time of the First
Closing as defined in the Exchange Agreement.
"Exchange Agreement" means the Amended and Restated Exchange
Agreement dated as of September 4, 1996, as amended and restated as of
October 17, 1996, among each Ingram Company and the Persons listed on the
signature pages thereof.
"Material Adverse Effect" means, with respect to any Ingram
Company, a material adverse effect on the business, assets, condition
(financial or otherwise) or result of operations of the business of such
Ingram Company and its Subsidiaries taken as a whole.
"Person" means an individual, corporation, partnership,
association, trust, limited liability company or other entity or
organization, including a government or political subdivision or an agency
or instrumentality thereof.
"Second Closing" shall have the meaning set forth in the
Exchange Agreement.
"Subsidiary" means, with respect to Industries, Entertainment
or Micro, any entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors
or other persons performing similar functions are directly or indirectly
owned by such Person immediately after the Closing.
(b) Each of the following terms is defined in the Section
set forth opposite such term:
Term Section
----- -------
Cactus 3.2
Cooper Agreement 3.2
Currently Pledged Stock 4.4
IMS 3.1
Indemnified Party 5.3
Indemnifying Party 5.3
IOBC 3.1
IPSI 3.2
Loss 5.2
Magnolia 3.1
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Each party represents and warrants to each other party as of
September 4, 1996, as of October 17, 1996 and as of the Effective Time that:
SECTION 2.1. Corporate Existence and Power. Such party is
a corporation duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except where the failure to have such governmental licenses,
authorizations, permits, consents and approvals does not have a Material
Adverse Effect or would not prevent such party from performing any of its
obligations hereunder or under the Ancillary Agreements.
SECTION 2.2. Corporate Authorization. The execution,
delivery and performance by such party of this Agreement and each of the
Ancillary Agreements to which such party is a party are within its
corporate powers and have been duly authorized by all necessary corporate
and stockholder action on its part. This Agreement constitutes, and when
executed and delivered, each of the Ancillary Agreements to which such
party is a party will constitute, a valid and binding agreement of such
party.
SECTION 2.3. Governmental Authorization. The execution,
delivery and performance by such party of this Agreement and each of the
Ancillary Agreements to which such party is a party require no action by or
in respect of, or filing with, any governmental body, agency or official
other than (i) compliance with any applicable requirements of the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder and (ii) such other matters where
the failure to take such action or make such filing would not have a
Material Adverse Effect or prevent such party from performing any of its
obligations hereunder or the Ancillary Agreements.
SECTION 2.4. Non-Contravention. The execution, delivery
and performance by such party of this Agreement and each of the Ancillary
Agreements to which such party is a party do not (i) violate the
certificate of incorporation or bylaws of such party, (ii) assuming
compliance with the matters referred to in Section 2.3, violate any
applicable law, rule, regulation, judgment, injunction, order or decree,
(iii) constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of any party or to
a loss of any benefit relating to the business of such party to which any
party is entitled under any permit or license or any provision of any
agreement, contract or other instrument binding upon any party or by which
any of the assets of such party is or may be bound or (iv) result in the
creation or imposition of any lien on any asset of such party, except, in
the case of clauses (ii) through (iv), as would not, individually or in the
aggregate, have a Material Adverse Effect or prevent such party from
performing in any material respect any of its obligations hereunder or
under the Ancillary Agreements.
ARTICLE 3
CERTAIN LIABILITIES; CERTAIN ASSETS
SECTION 3.1. Assumed Liabilities. (a) Upon the terms and
subject to the conditions of this Agreement and except as otherwise
provided in the Ancillary Agreements, each party agrees, at the Effective
Time, to assume, or remain liable for, as the case may be, and shall
thereafter pay, perform and discharge, the following liabilities and
obligations:
(i) liabilities and obligations incurred by such party (in
the case of Micro and Entertainment) and its Covered Persons, or by
any Covered Person of such party (in the case of Industries), with
respect to periods ending on or prior to the Effective Time, other
than liabilities and obligations arising directly or indirectly as a
result of (1) any intentional act which is tortious or (2) any
illegal act, in either case committed by (x) a corporate officer of
Industries (except for actions that are believed by such person to
be in furtherance of his duties as an officer or employee of Micro,
Entertainment, any of their respective Covered Persons or a Covered
Person of Industries), (y) any other employee of Industries whose
responsibilities are not primarily associated with Micro,
Entertainment, any of their respective Covered Persons or a Covered
Person of Industries, or (z) any other employee or agent of another
party;
(ii) liabilities and obligations incurred by any other party
(if such other party is Micro or Entertainment) and its Covered
Persons, or by any Covered Person of any other party (if such other
party is Industries), with respect to periods ending on or prior to
the Effective Time arising directly or indirectly as a result of (x)
any intentional act which is tortious or (y) any illegal act, in
either case committed by an employee or agent of such party or its
Covered Persons (in the case of Micro or Entertainment) or by a
Covered Person of such party (in the case of Industries);
(iii) in the case of Industries and subject to Section
3.1(b)(ii), general corporate level liabilities and obligations
recorded under Industries' internal accounting system as "home
office" liabilities up to an aggregate amount of $100,000 incurred by
Industries with respect to periods ending on or prior to the
Effective Time, to the extent that such liabilities and obligations
(x) are not attributable to Micro, Entertainment, any of their
respective Covered Persons or any Covered Person of Industries, (y)
have not been reserved for on the December 31, 1995 balance sheet of
any Ingram Company and (z) are extraordinary and non-recurring in
nature and arise other than in the ordinary course of business;
(iv) in the case of Micro, in the event that the net proceeds
from a disposition by Industries of its investment in common stock
of Stream, Inc. are less than $500,580, liabilities and
obligations in an amount equal to the sum of (x) such shortfall
and (y) the Carrying Cost of such investment from and after
December 31, 1995.
(v) in the case of Industries, (x) the first $4,500,000 of
liabilities and obligations payable in connection with the
settlement following December 31, 1995 of Bluewater Insurance,
Ltd. claims arising under the treaties listed on Schedule
3.1(a)(v) and (y) liabilities and obligations payable in
connection with the settlement following December 31, 1995 of such
Bluewater Insurance, Ltd. claims in excess of the second
$4,500,000 of such liabilities and obligations; and
(vi) liabilities and obligations incurred by such party and
its Covered Persons with respect to periods beginning after the
Effective Time.
(b) Upon the terms and subject to the conditions of this
Agreement, each of Industries, Micro and Entertainment agrees, at the
Effective Time, to assume (or retain, as the case may be) 23.01%, 72.84%
and 4.15%, respectively, of the following liabilities and obligations:
(i) liabilities and obligations incurred by any party or any
of its Covered Persons with respect to periods ending on or prior
to the Effective Time arising directly or indirectly as a result
of (x) any intentional act which is tortious or (y) any illegal
act, in either case committed by a corporate officer of Industries
(except for actions that are believed by such person to be in
furtherance of his duties as an officer or employee of Micro,
Entertainment, any of their respective Covered Persons or a
Covered Person of Industries), or any other employee of Industries
whose responsibilities are not primarily associated with Micro,
Entertainment, any of their respective Covered Persons or a
Covered Person of Industries;
(ii) general corporate level liabilities and obligations
recorded under Industries' internal accounting system as "home
office" liabilities in excess of an aggregate amount of $100,000
incurred by Industries with respect to periods ending on or prior
to the Effective Time to the extent that such liabilities and
obligations (x) are not attributable to Micro, Entertainment, any
of their respective Covered Persons or any Covered Person of
Industries, (y) have not been reserved for on the December 31,
1995 balance sheet of any Ingram Company and (z) are extraordinary
and non-recurring in nature and arise other than in the ordinary
course of business (in which case, all of such liabilities and
obligations in excess of $1.00 shall be assumed or retained
pursuant to this Section 3.1(b)(ii) and Industries shall be
reimbursed for any excess amounts paid in respect of such
liabilities and obligations pursuant to Section 3.1(a)(iii));
(iii) (x) liabilities and obligations, to the extent
accrued on December 31, 1995 (and not otherwise included in
amounts to be allocated to the parties hereto pursuant to the
provisions of Section 6.5 or Section 7.12 of the Exchange
Agreement), incurred by Industries under the Ingram Industries
Inc. Supplemental Executive Retirement Plan and the Ingram
Supplemental Thrift Plan in respect of E. Bronson Ingram, Neil N.
Diehl, Linwood A. Lacy, Jr., John M. Donnelly, David F.
Sampsell and Philip M. Pfeffer and (y) liabilities and
obligations incurred by Industries in an amount equal to (A) the
aggregate purchase price paid by Industries for up to 135,000
shares of common stock of Micro purchased by Industries in the
initial public offering of Micro common stock, plus (B) if
Industries does not purchase 135,000 shares of Micro common stock
in such initial public offering, the product of (1) 135,000, less
the number of shares actually purchased in such initial public
offering, and (2) the price of one share of Micro common stock
sold in such initial public offering;
(iv) liabilities and obligations incurred by Industries in
an amount equal to the loss recognized in connection with the
disposition and winding up of the business by Industries of Ingram
Merchandising Services Inc. ("IMS") to the extent that such loss
causes the equity of IMS as reported on a stand alone basis to be
less than $8,956,000;
(v) liabilities and obligations incurred by Industries in
an amount equal to the sum of (x) the loss recognized in
connection with the disposition by Industries of its partnership
interest in Magnolia Coal Terminal ("Magnolia") or a disposition
by Magnolia of all or substantially all of its assets (which loss
shall be calculated after taking into account (A) expenses
incurred, and indemnification payments received, after December
31, 1995 in connection with environmental matters relating to such
investment, (B) distributions received after December 31, 1995 in
respect of such investment and (C) contributions made after
December 31, 1995 with respect to such investment) and (y) the
Carrying Cost of such investment from and after December 31, 1995;
(vi) liabilities and obligations up to an aggregate amount
of $4,500,000 payable in connection with the settlement following
December 31, 1995 of Bluewater Insurance, Ltd. claims arising
under the treaties set forth on Schedule 3.1(a)(v), in excess of
the first $4,500,000 of such liabilities and obligations; and
(vii) liabilities and obligations up to an aggregate amount
of $2,500,000 incurred by Industries or Ingram Ohio Barge Co.
("IOBC") pursuant to the guarantees by Industries and IOBC of the
obligations of IOBC under the 1974 charter agreement with Mellon
Bank, as Owner Trustee, and the 1975 charter agreement with Fleet
National Bank of Connecticut (formerly U.S. Trust), as such
guarantees may be amended, modified or supplemented from time to
time.
(c) Notwithstanding anything herein to the contrary, each
party hereto agrees that, following the Effective Time and prior to the
Second Closing, Industries and Entertainment will be liable on a joint and
several basis for the obligations of Industries and Entertainment under
Section 3.1(a) and 3.1(b).
(d) Without limiting the generality of the last sentence of
Section 7.6, nothing in this Agreement shall be deemed to give rise to, or
accelerate the performance of, any obligation of any party owing to a Person
other than a party to this Agreement.
SECTION 3.2. Certain Contingent Assets.
Upon the terms and subject to the conditions of this Agreement, the parties
hereto agree that each of the following assets shall be allocated 23.01% to
Industries, 72.84% to Micro and 4.15% to Entertainment:
(i) the amount by which the gain recognized in connection
with the disposition by Industries of its partnership interest in
Magnolia or a disposition by Magnolia of all or substantially all of
its assets (which gain shall be calculated after taking into account
(x) expenses incurred, and indemnification payments received, after
December 31, 1995 in connection with environmental matters relating
to such investment, (y) distributions received after December 31,
1995 in connection with such investment and (z) contributions made
after December 31, 1995 with respect to its investment in Magnolia)
exceeds the Carrying Cost of such investment from and after December
31, 1995;
(ii) the amount by which the proceeds recognized by
Industries in connection with the disposition by Industries of its
investment in common stock of Stream, Inc. as of December 31, 1995
exceed the sum of (x) $500,580 plus (y) the Carrying Cost of such
investment from and after December 31, 1995; and
(iii) the amount of net cash flow distributed to Industries
resulting from the sale and liquidation of the ownership interest
of Ingram Petroleum Service Inc. ("IPSI") in Ingram Cactus
Company ("Cactus") (net of applicable income taxes and after
liquidation of assets and liabilities of IPSI inclusive of the
cost of liquidating the Cactus subsidiaries), minus the book value
(net equity of IPSI calculated in accordance with generally
accepted accounting principles at December 31, 1995), minus the
Carrying Cost of Industries' equity investment in IPSI from and
after December 31, 1995. It is understood and agreed by the
parties that (1) an initial allocation of the net amount referred
to in this clause (iii) shall be made among the parties 30 days
after final determination of the working capital adjustment as
provided for in Section 1.11 (a) of the Purchase Agreement (the
"Cooper Agreement") with Cooper Cameron dated March 28, 1996,
which shall provide for Cactus' remaining unliquidated liabilities
and (2) a final allocation among the parties shall be made at such
time thereafter as all significant liabilities have been resolved
or the parties have mutually agreed on final provisions for all
significant unresolved liabilities; provided that the parties
shall use all reasonable efforts to cause such liabilities to be
resolved no later than 24 months after consummation of the
transactions contemplated by the Cooper Agreement.
SECTION 3.3. Certain Adjustments.
(a) Notwithstanding anything herein to the contrary, the
parties agree that, in consideration of distributions to Industries
previously made by Micro and Entertainment, no amounts shall be allocated
to, and no liabilities or obligations shall be assumed or borne by, Micro
or Entertainment pursuant to Section 6.5(a) or Section 7.12 of the Exchange
Agreement or pursuant to Article 3 of this Agreement, until the aggregate
of such amounts, costs, expenses, liabilities and obligations shall exceed
$20,778,000, in the case of Micro, or $1,160,000, in the case of
Entertainment, in which event such allocation or assumption shall be made
only to the extent of such excess. To the extent that the aggregate of
such costs, expenses, liabilities and obligations is less than $20,778,000
in the case of Micro, or $1,160,000 in the case of Entertainment,
Industries shall make a payment in the amount of such difference to Micro
or Entertainment, as the case may be.
(b) Notwithstanding anything herein to the contrary, the
amount of any gain or loss to be allocated among the Ingram Companies
pursuant to this Article 3 shall be determined after taking into account
the actual tax consequences of the recognition of such gain or loss to the
party recognizing such gain or loss (which consequences shall include, in
the case of any such gain, the amount of any tax imposed thereon and, in
the case of any such loss, any deduction to which such party becomes
entitled as a result thereof).
ARTICLE 4
GENERAL COVENANTS
Each party hereto agrees that:
SECTION 4.1. Conduct of the Business. From September 4,
1996 until the Second Closing (or, with respect to Micro, until the
Effective Time), such party shall conduct its business in the ordinary
course consistent with past practice and the published policies and
procedures of the Ingram Companies and use its best efforts to preserve
intact the business organizations and relationships with third parties and
keep available the services of the present employees of its business.
Without limiting the generality of the foregoing, from September 4, 1996
until the Second Closing (or, with respect to Micro, until the Effective
Time) and except in connection with the transactions contemplated hereby or
by the Ancillary Agreements (or, with respect to actions taken prior to the
Effective Time, as otherwise approved by the board of directors of
Industries), such party will not:
(a) enter into any lease, contract, agreement, commitment,
arrangement or transaction, other than in the ordinary course of business
consistent with past practice;
(b) sell, lease, license or otherwise dispose of any assets
except (i) pursuant to existing contracts or commitments or (ii) in the
ordinary course of business consistent with past practice;
(c) modify, amend, cancel, terminate, forfeit, assign or
encumber in any material manner, other than in the ordinary course of
business consistent with past practice, any existing material franchise,
license, permit, consent, authority, operating right, lease, contract,
agreement, commitment or arrangement;
(d) incur, assume or guarantee any indebtedness for borrowed
money other than in the ordinary course of business consistent with past
practice;
(e) declare, set aside or pay any dividend or other
distribution with respect to any shares of capital stock, or issue,
repurchase, redeem or otherwise acquire any outstanding shares of capital
stock or other ownership interests, other than in the ordinary course of
business consistent with past practice;
(f) amend any material term of any outstanding security;
(g) create or assume any lien on any material asset other
than in the ordinary course of business consistent with past practice;
(h) make any loan, advance or capital contribution to or
investment in any Person other than loans, advances or capital contributions
to or investments in wholly-owned subsidiaries or employees or as otherwise
made in the ordinary course of business consistent with past practice;
(i) (A) grant any severance or termination pay to any
director or officer, (B) enter into any individual employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any director, officer or employee, (C) change
benefits payable under existing severance or termination pay policies or
employment agreements or (D) change compensation, bonus or other benefits
payable to directors, officers or employees, other than, in the case of
each of clauses (A) through (D) above, in the ordinary course of business
consistent with past practice; or
(j) agree or commit to do any of the foregoing.
SECTION 4.2. Access; Confidentiality. (a) Each party
will, at and after the Effective Time, afford to each other party and its
agents reasonable access to its properties, books, records, employees and
auditors to the extent necessary to permit such other party to determine
any matter relating to its rights and obligations hereunder or to any
period ending at or before the Effective Time. Each of Industries and
Entertainment will, at and after the Second Closing, afford to the other
and its agents reasonable access to its properties, books, records,
employees and auditors to the extent necessary to permit such other party
to determine any matter relating to its rights and obligations hereunder or
to any period ending at or before the Second Closing.
(b) After the Effective Time, each party will hold, and will
use its best efforts to cause its respective officers, directors,
employees, accountants, counsel, consultants, advisors, agents and
Affiliates to hold, in confidence, unless compelled to disclose by judicial
or administrative process or by other requirements of law, all confidential
documents and information concerning the business of the other parties,
except (i) to the extent that such information can be shown to have been
(A) in the public domain through no fault of such party or (B) later
lawfully acquired by such party on a non-confidential basis or (ii) to the
extent that such documents and information are required to be furnished to
the lenders of such party in connection with guarantees of indebtedness
owing to such lenders that are furnished by such other parties. The
obligation of such party and its Affiliates to hold any such information in
confidence shall be satisfied if they exercise the same care with respect
to such information as they would take to preserve the confidentiality of
their own similar information.
SECTION 4.3. Best Efforts; Further Assurances. Subject to
the terms and conditions of this Agreement, the parties hereto will use their
best efforts (but without the payment of money) to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary or desirable
under applicable laws and regulations to consummate the transactions
contemplated by this Agreement and the Ancillary Agreements. Each party
agrees to execute and deliver such other documents, certificates, agreements
and other writings and to take such other actions as may be reasonably
necessary or desirable in order to consummate or implement expeditiously the
transactions contemplated by this Agreement and the Ancillary Agreements.
SECTION 4.4. Loans; Repurchase Agreements. (a) Loans
that have been made by Industries to certain employees of Micro and
Entertainment shall be transferred by Industries as of the Effective Time to
Micro (with respect to employees of Micro) and to Entertainment (with respect
to employees of Entertainment), in each case in consideration for the
principal balance (plus accrued interest) of each such loan. Loans that have
been made after the Effective Time by Industries to certain employees of
Entertainment shall be transferred by Industries as of the Second Closing to
Entertainment, in consideration for the principal balance (plus accrued
interest) of each such loan.
(b) At or prior to the Effective Time, Micro shall enter into
bank repurchase agreements effective as of the Effective Time with respect to
the Micro securities to be received pursuant to the Exchange Agreement in
exchange for shares of Industries Common Stock (the "Currently Pledged Stock")
currently pledged as collateral for loans made by First American National
Bank, NationsBank, N.A. or NationsBank of Tennessee, N.A. to certain
stockholders of Industries. At or prior to the Second Closing, Entertainment
shall enter into bank repurchase agreements effective as of the Second Closing
with respect to the Entertainment securities to be received pursuant to the
Exchange Agreement in exchange for shares of Currently Pledged Stock. Such
repurchase agreements shall be in form and substance satisfactory to Micro or
Entertainment, as the case may be, it being understood that such repurchase
agreements shall be similar to Industries' current bank repurchase agreements.
Industries shall be released from its obligations under Industries' current
bank repurchase agreements with respect to the Currently Pledged Stock
exchanged in the Exchange. Such release shall be effective at the Effective
Time (with respect to shares of Currently Pledged Stock exchanged pursuant to
the Exchange Agreement at the Effective Time) and at the Second Closing (with
respect to shares of Currently Pledged Stock exchanged pursuant to the
Exchange Agreement at the Second Closing).
SECTION 4.5. Cross-Guarantees. Each of Industries and
Entertainment hereby agrees, upon the request of Micro, to guarantee, for
the fees and on the other terms and conditions set forth on Schedule 4.5,
(i) indebtedness incurred by Micro pursuant to credit facilities of Micro
entered into at or prior to the Effective Time or pursuant to any
replacements, refinancings or renewals thereof which do not increase the
aggregate amount of the indebtedness guaranteed and are on terms
substantially the same as the prior facilities or otherwise reasonably
acceptable to Industries and Entertainment, (ii) indebtedness incurred by
Micro the proceeds of which are used by Micro to repay indebtedness owing
to Industries, Entertainment or their respective Subsidiaries and (iii)
amounts payable by Micro under the Master Lease dated as of December 20,
1995 by and between Lease Plan North America, Inc. and Ingram Micro L.P.
Commencing at the Effective Time, Micro shall reimburse Entertainment or
Industries, as the case may be, for the difference between (x) the actual
cost of indebtedness incurred by Entertainment or Industries in connection
with any type of financing transaction (up to an amount of such financing
equal to the amount of indebtedness guaranteed by Entertainment or
Industries, as the case may be), and the amount which such portion of such
financing would have cost had all such guarantees been released at such
time and (y) any increased cost of existing indebtedness of Industries or
Entertainment arising as a result of the failure to have all guarantees
released at such time. Each of Entertainment and Industries agrees to give
Micro 75 days prior written notice of the incurrence by it of any
indebtedness (other than indebtedness incurred pursuant to facilities
entered into as of the Effective Time) subject to reimbursement as
described above. Such written notice shall set forth the proposed amount
of such indebtedness and shall specify the material terms and conditions of
such indebtedness being proposed at such time, to the extent known by
Entertainment or Industries at the time of such notice. Fees payable to
Industries and Entertainment pursuant to Schedule 4.5 for any month shall
be allocated between them in accordance with their relative book values as
of the end of the prior month.
SECTION 4.6. Public Announcements. The parties agree to
consult with each other before issuing any press release or making any public
statement with respect to this Agreement, the Ancillary Agreements or the
consummation of the transactions contemplated hereby and thereby and, except
as may be required by applicable law or any listing agreement with any
national securities exchange, will not issue any such press release or make
any such public statement without the prior written consent of all of the
parties hereto, which will not unreasonably be withheld.
SECTION 4.7. Notices of Certain Events. Each party hereto
shall promptly notify each other party of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental
or regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge threatened, against, relating to or
involving or otherwise affecting such party challenging this
Agreement or any Ancillary Agreement or the transactions contemplated
hereby or thereby or seeking to prohibit, alter, prevent or
materially delay the Effective Time; and
(iv) any materially adverse developments affecting the
business and operations of such party which become known to it,
including without limitation any change which has had or is
reasonably likely to have a Material Adverse Effect on such party.
ARTICLE 5
SURVIVAL; INDEMNIFICATION
SECTION 5.1. Survival. The representations and warranties
of the parties hereto contained in this Agreement or in any certificate or
other writing delivered pursuant hereto or in connection herewith shall not
survive the Effective Time. The covenants and agreements to be performed
hereunder shall remain in full force and effect in accordance with their
terms (or, if no survival period is specified, indefinitely).
Notwithstanding the preceding sentence, any covenant or agreement in
respect of which indemnity may be sought under this Agreement shall survive
the time at which it would otherwise terminate pursuant to the preceding
sentence, if notice of the breach thereof giving rise to such right to
indemnity shall have been given to the party against whom such indemnity
may be sought prior to such time.
SECTION 5.2. Indemnification. Each party hereby
indemnifies each other party and its Affiliates against and agrees to hold
each of them harmless from any and all damage, loss, liability and expense
(including without limitation reasonable expenses of investigation and
reasonable attorneys' fees and expenses in connection with any action, suit
or proceeding, including any expenses incurred in connection with the
enforcement of rights of any party pursuant to this Agreement)
(collectively, "Loss") incurred or suffered by such other party or any of
its Affiliates arising out of:
(i) any breach of any covenant or agreement to be performed
by such party pursuant to this Agreement; and
(ii) the failure of such party to perform its obligations with
respect to any liability assumed (or retained) by such party pursuant
to Section 3.1.
SECTION 5.3. Procedures. (a) The party seeking
indemnification under Section 5.2 (the "Indemnified Party") shall give prompt
written notice to the party against whom indemnity is sought (the
"Indemnifying Party") of any claim, assertion, event or proceeding of which
such Indemnified Party has knowledge concerning any Loss as to which such
Indemnified Party may request indemnification under such Section; provided
that the failure to give such notice shall not relieve the Indemnifying Party
from any liability under Section 5.2, except to the extent that the
Indemnifying Party has been prejudiced by such failure.
(b) With respect to any such claim or proceeding by or in
respect of a third party, the Indemnifying Party shall have the right to
direct, through counsel of its own choosing, reasonably satisfactory to the
Indemnified Party, the defense or settlement thereof at its own expense. If
the Indemnifying Party elects to assume the defense of any such claim or
proceeding, the Indemnifying Party thereby waives its right to contest its
obligation to indemnify the Indemnified Party pursuant to this Section with
respect to such claim or proceeding and the Indemnified Party may participate
in such defense, but in such case the expenses of the Indemnified Party shall
be paid by the Indemnified Party. The Indemnified Party shall provide the
Indemnifying Party with reasonable access to its records and personnel
relating to any such claim, assertion, event or proceeding during normal
business hours and shall otherwise cooperate with the Indemnifying Party in
the defense or settlement thereof, and the Indemnifying Party shall reimburse
the Indemnified Party for all of its reasonable out-of-pocket expenses in
connection therewith. Upon assumption of the defense of any such claim or
proceeding by the Indemnifying Party, the Indemnified Party shall not pay, or
permit to be paid, any part of any claim or demand arising from such asserted
liability for so long as the Indemnifying Party is diligently defending such
claim or demand, unless the Indemnifying Party consents in writing to such
payment or unless a final judgment from which no appeal may be taken is
entered against the Indemnified Party for such liability. If the Indemnifying
Party shall fail to assume and pursue the defense, the Indemnified Party shall
have the right to undertake the defense or settlement thereof at the
Indemnifying Party's expense (subject to the liability of the Indemnifying
Party pursuant to Section 5.2). No third party claim may be settled by the
Indemnified Party without the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld. Any such settlement shall include
as an unconditional term thereof the giving by the claimant or the plaintiff
to the Indemnified Party of a release of the Indemnified Party from all
liability in respect of such claim; provided that if the Indemnifying Party
submits to the Indemnified Party a bona fide settlement offer from the third
party claimant of any claim (which settlement offer shall include as an
unconditional term of it the release by the claimant or the plaintiff to the
Indemnified Party from all liability in respect of such claim) and the
Indemnified Party refuses to consent to such settlement, then thereafter the
Indemnifying Party's liability to the Indemnified Party for indemnification
with respect to such claim shall not exceed the settlement amount included in
said bona fide settlement offer, and the Indemnified Party shall either assume
the defense of such claim or pay the Indemnifying Party's attorney's fees and
other out-of-pocket costs incurred thereafter in continuing the defense of
such claim.
(c) Each payment made pursuant to Section 5.2 of an amount
equal to $1,000,000 or more shall be made promptly following final
determination of such claim and each such payment of an amount of less than
$1,000,000 shall be made no later than the end of the calendar quarter next
following the date on which the amount of such claim was finally determined.
Any such payment shall be limited to the amount of any liability or damage
that remains after deducting therefrom any indemnity, contribution or other
similar payment recoverable by the Indemnified Party from any third party with
respect thereto.
ARTICLE 6
TERMINATION
SECTION 6.1. Grounds for Termination. This Agreement shall
terminate in its entirety upon the termination of the Exchange Agreement
pursuant to Section 7.6(a) of the Exchange Agreement. Section 4.1 of this
Agreement shall terminate upon the termination of the Exchange Agreement
pursuant to Section 7.6(b) of the Exchange Agreement.
SECTION 6.2. Effect of Termination. If this Agreement is
terminated as permitted by Section 6.1, such termination shall be without
liability of any party (or any stockholder, director, officer, employee,
agent, member, consultant or representative of such party) to the other
parties to this Agreement.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Headings. The headings in this Agreement are
for convenience of reference only and shall not control or affect the
meaning or construction of any provision hereof.
SECTION 7.2. Entire Agreement. This Agreement, the
Ancillary Agreements, the Exchange Agreement, the Related Agreements (as
defined in the Exchange Agreement) and the Board Representation Agreement
(as defined in the Exchange Agreement) constitute the entire agreement and
understanding of the parties hereto in respect of the subject matter
contained herein and therein. This Agreement and such other agreements
supersede all prior agreements and understandings between the parties
hereto with respect to the subject matter hereof and thereof.
SECTION 7.3. Notices. Any notice, request, instruction or
other document to be given hereunder by any party hereto to another party
hereto shall be in writing (including telecopier or similar writing) and
shall be given to such party at its address set forth on the signature
pages hereof, or to such other address as the party to whom notice is to be
given may provide in a written notice to the party giving such notice, a
copy of which written notice shall be on file with the Secretary of
Industries. If notice is given pursuant to this Section of a permitted
successor or assign of a party to this Agreement, then notice shall
thereafter be given as set forth above to such successor or assign of such
party to this Agreement. Each such notice, request or other communication
shall be effective (i) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified on the signature pages hereof
and electronic or oral confirmation of receipt is received, (ii) if given
by mail, at the close of business on the third business day hours after
such communication is deposited in the mails with first class postage
prepaid addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in this Section 7.3.
SECTION 7.4. Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Tennessee without regard to the conflicts of law rules of such state.
SECTION 7.5. Severability. The invalidity or
unenforceability of any provision of this Agreement in any jurisdiction
shall not affect the validity, legality or enforceability of the remainder
of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any
other jurisdiction, it being intended that all rights and obligations of
the parties hereunder shall be enforceable to the fullest extent permitted
by law.
SECTION 7.6. Successors, Assigns, Transferees. No party
may assign or otherwise transfer any of its rights under this Agreement
without the consent of each other party. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, successors and permitted assigns. Neither this
Agreement nor any provision hereof shall be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement,
those who agree to be bound hereby and their respective successors and
permitted assigns.
SECTION 7.7. Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be an original with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 7.8. Amendments and Waivers. (a) Any provision of
this Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by each
party to this Agreement, or in the case of a waiver, by the party against
whom the waiver is to be effective.
(b) No failure or delay by any party 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.
SECTION 7.9. Consent to Jurisdiction. Each party hereto
irrevocably submits to the non-exclusive jurisdiction of any Tennessee
State Court or United States Federal Court sitting in the Middle District
of Tennessee over any suit, action or proceeding arising out of or relating
to this Agreement. Each party hereto waives any right it may have to
assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this Section 7.9.
Nothing in this paragraph shall affect or limit any right to serve process
in any manner permitted by law, to bring proceedings in the courts of any
jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
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.
INGRAM INDUSTRIES INC.
By: /s/ John R. Ingram
----------------------------
Name: John R. Ingram
Title: Co-President
One Belle Meade Place
4400 Harding Road
Nashville, TN 37205
Telecopy: (615) 298-8242
INGRAM MICRO INC.
By: /s/ Jeffrey R. Rodek
----------------------------
Name: Jeffrey R. Rodek
Title: President
1600 East Saint Andrew Place
Santa Ana, CA 92705
Telecopy: 714-566-7900
INGRAM ENTERTAINMENT INC.
By: /s/ David B. Ingram
----------------------------
Name: David B. Ingram
Title: Chairman & President
Two Ingram Blvd.
La Vergne, TN 37086
Telecopy: 615-287-4985
EXHIBIT 10.14
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of November 6, 1996 among Ingram Micro Inc.,
a Delaware corporation ("MICRO"), and the Persons listed on the signature
pages hereof.
In connection with the closing of the transactions contemplated by
the Restated Exchange Agreement (the "EXCHANGE AGREEMENT") dated as of
September 4, 1996 as amended and restated as of October 17, 1996, among
Ingram Industries Inc. ("INDUSTRIES"), Ingram Entertainment Inc.
("ENTERTAINMENT"), Micro and the Persons listed on the signature pages
thereof, the parties hereto (other than Micro) acquired shares of common
stock of Micro; and
WHEREAS, Micro has agreed to grant the other parties hereto
certain rights to register such shares of common stock as provided herein;
NOW, THEREFORE, in consideration of the mutual promises set forth
below (the mutuality, adequacy and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person. For the purposes of this definition, "control" when used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"BUSINESS DAY" means any day except a Saturday, Sunday or any other day
on which commercial banks in the City of New York are authorized by law to
close.
"COMMISSION" means the Securities and Exchange Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAMILY STOCKHOLDER" means each of the Family Stockholders set forth on
Annex I hereto.
"GRANTEE" means each Person (other than a Holder) to whom Micro has
granted registration rights.
"HOLDERS" means each of the parties to this Agreement (other than
Micro) and any other Person, who, pursuant to the terms hereof, shall become a
party to or agree to be bound by the terms of this Agreement after the date
hereof.
"INGRAM STOCKHOLDER" means each Family Stockholder, the Qtip Trust, the
E. Bronson Ingram 1995 Charitable Remainder 5% Unitrust, the Martha and Bronson
Ingram Foundation, the E. Bronson Ingram 1994 Charitable Lead Annuity Trust and
the Permitted Transferees of each of such Persons.
"MICRO CLASS A COMMON STOCK" means the Class A Common Stock, par value
$0.01 per share, of Micro.
"PERMITTED TRANSFEREE" means, (A) with respect to any Ingram
Stockholder, (i) any Affiliate of such Ingram Stockholder, (ii) the spouse or
descendants (including adopted Persons and their descendants) of such Ingram
Stockholder, their estates, or trusts for the benefit of such Ingram
Stockholder, Affiliate, spouse or descendants or (iii) any other Holder, (B)
with respect to the Ingram Thrift Plan, (i) any Participant (as defined in the
Employee Benefits Transfer, Assumption and Services Agreement of even date
herewith among Industries, Micro and Entertainment (the "BENEFITS TRANSFER
AGREEMENT")) or (ii) the Micro Thrift Plan or the Entertainment Thrift Plan
(each as defined in the Benefits Transfer Agreement) in connection with any
Transfer of Micro common stock to the Micro Thrift Plan or Entertainment Thrift
Plan, respectively, pursuant to Section 3.01 of the Benefits Transfer Agreement
and (C) with respect to any other Holder, the spouse or descendants (including
adopted Persons and their descendants) of such Holder, their estates, or trusts
or other entities solely for the benefit of such Holder, spouse or descendants;
provided that each such transferee shall have executed and delivered to Micro an
instrument substantially in the form of Exhibit A hereto pursuant to which the
transferee shall have agreed to be bound by the terms of this Agreement.
"PERSON" means an individual, corporation, partnership, limited
liability company, trust, association or any other entity or organization.
"PUBLIC OFFERING" means any public offering of equity securities of
Micro pursuant to an effective registration statement under the Securities Act
other than
B-2
pursuant to a registration statement on Form S-4 or Form S-8 or any successor or
similar form.
"QTIP TRUST" means the E. Bronson Ingram Qtip Marital Trust.
"REGISTRABLE SECURITIES" means any shares of Micro Class A Common Stock
now or hereafter acquired by the Holders or by any Permitted Transferee of any
such Holder and any shares of Micro Class A Common Stock issued with respect to
any Registrable Securities including, without limitation, by way of a stock
split or stock dividend, in connection with a recapitalization or a merger,
consolidation or other reorganization, or pursuant to a distribution; provided
that (A) such securities shall cease to be Registrable Securities if and when
(i) a registration statement with respect to the disposition of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of pursuant to such effective registration statement, (ii)
such securities shall have been sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in force) are
met or (iii) such shares shall have ceased to be outstanding securities and (B)
in addition to clause (A) above, securities requested to be registered by
Holders (other than the Ingram Stockholders) pursuant to Section 2.02 shall
cease to be Registrable Securities if and when such securities may be sold
pursuant to Rule 144(k) or otherwise in the public market without being
registered pursuant to the Securities Act; provided further that any such shares
that have ceased to be Registrable Securities cannot thereafter become
Registrable Securities, and securities that are issued or distributed by way of
dividends in respect of such shares of Micro Class A Common Stock that have
ceased to be Registrable Securities shall not be Registrable Securities.
"REGISTRATION EXPENSES" means all (i) registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of a qualified independent underwriter, if
any, counsel in connection therewith and the reasonable fees and disbursements
of counsel in connection with blue sky qualifications of the Registrable
Securities), (iii) printing expenses, (iv) internal expenses of Micro
(including, without limitation, all salaries and expenses of officers and
employees performing legal or accounting duties), (v) fees and disbursements of
counsel for Micro, (vi) customary fees and expenses for independent certified
public accountants retained by Micro (including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters), (vii) fees and expenses of
any special experts retained by Micro in connection with such registration,
(viii) fees and expenses of listing the Registrable Securities on a securities
exchange and (ix) customary fees and disbursements (in light of the time and
effort required and the complexity of the matters addressed) of one separate
firm of attorneys (in addition to any local counsel) for the Holders (which
counsel shall be selected by the Qtip Trust, the Initiating Family Stockholders,
or Demanding Holders owning a majority of the Registrable Securities requested
to be included in such
B-3
registration by all Demanding Holders (in the case of any registration requested
by the Qtip Trust, the Initiating Family Stockholders or the Demanding Holders,
respectively, pursuant to Section 2.01)), or the Holder selling securities
constituting the largest number of securities included in such registration by
any Holder (in the case of any registration pursuant to Section 2.02) and shall
be reasonably acceptable to Micro; but shall not include any underwriting fees
or discounts or commissions attributable to the sale of Registrable Securities.
"RULE 144" means Rule 144 under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
---- -------
Change of Control Date 2.01
Demanding Holders 2.01
Disadvantageous Condition 2.01
Indemnified Party 2.07
Indemnifying Party 2.07
Initiating Family Stockholders 2.01
Inspectors 2.04
Maximum Offering Size 2.01
Priority Holder 2.02
Priority Securities 2.02
Records 2.04
Section 2.01 Holders 2.01
ARTICLE 2
REGISTRATION RIGHTS
SECTION 2.01. Demand Registration.
(a) Registration on Request. If following the initial Public
Offering, the Qtip Trust desires to effect the registration under the
Securities Act of outstanding Registrable Securities, the Qtip Trust may
make a written request that Micro effect the registration under the
Securities Act of all or any portion of the outstanding Registrable
Securities of the Qtip Trust and any or all of the other Ingram
Stockholders. If following the initial Public Offering, the Family
Stockholders desire to effect the registration under the Securities Act of
outstanding Registrable Securities, Family Stockholders (the "INITIATING
FAMILY STOCKHOLDERS") holding at least a majority of the outstanding
Registrable Securities held by all Family Stockholders may make a written
request that Micro effect
B-4
the registration under the Securities Act of all or any portion of the
outstanding Registrable Securities of such Family Stockholders. If
following the initial Public Offering and on any date (the "CHANGE OF
CONTROL DATE") prior to the second anniversary of the date hereof, the
Ingram Stockholders transfer, in one transaction or a series of related
transactions, shares of Micro common stock and if, after giving effect to
such transfer, the Ingram Stockholders cease to own shares of Micro common
stock representing a majority of the number of votes for the election of
directors represented by all of the shares of Micro common stock
outstanding on such date, the Holders (other than the Ingram Stockholders)
of at least a majority of the outstanding Registrable Securities held by
all Holders (other than the Ingram Stockholders) prior to the Change of
Control Date (the "DEMANDING HOLDERS") may, prior to the second anniversary
of the date hereof, make a written request that Micro effect the
registration under the Securities Act of all or any portion of the
outstanding Registrable Securities of such Holders; provided that the
Demanding Holders shall not be entitled to request any such registration if
such Demanding Holders were offered the opportunity to participate in such
transfer by the Ingram Stockholders generally on the same terms and
conditions as the Ingram Stockholders. The Qtip Trust, the Initiating
Family Stockholders and the Demanding Holders are sometimes hereinafter
referred to together as the "SECTION 2.01 HOLDER". Any request for
registration made pursuant to this Section 2.01 will specify the number of
shares of Registrable Securities proposed to be sold and will also specify
the intended method of disposition thereof; provided that Micro shall not
be obligated to (x) effect any shelf registration of Registrable Securities
pursuant to Rule 415 under the Securities Act, (y) register Registrable
Securities (i) representing less than 10% of the outstanding Registrable
Securities or (ii) if the Ingram Stockholders (in the case of any
registration requested by the Qtip Trust), the Initiating Family
Stockholders (in the case of any registration requested by the Initiating
Family Stockholders) or the Demanding Holders (in the case of any
registration requested by the Demanding Holders) hold less than 10% of the
outstanding Registrable Securities, unless the underwriter determines that
the net proceeds of any registration of such Registrable Securities are
expected to be at least $25,000,000 or (z) effect any such registration
requested by the Qtip Trust or the Initiating Family Stockholders, unless
the Qtip Trust or the Initiating Family Stockholders have furnished Micro
with an opinion of counsel in form and substance reasonably satisfactory to
Micro to the effect that the requested registration and sale of Registrable
Securities will not adversely affect the tax-free nature of the
transactions contemplated by the Exchange Agreement or the Amended and
Restated Reorganization Agreement dated as of September 4, 1996 as amended
and restated as of October 17, 1996 among Industries, Entertainment and
Micro. In any such opinion counsel may rely, to the extent they may do so
in good faith, upon representations that the trustees of the Qtip Trust and
other Holders had no plan or intention of selling the Micro common stock
received in the transactions at the time the transactions were effected and
that the decision to sell such stock pursuant to exercise of the demand
registration right was based upon considerations which arose subsequent to
the transactions. Micro will promptly give written notice of such
requested registration to all other Holders and each Grantee, and,
B-5
subject to Section 2.01(f) hereof, thereupon will use its best efforts to
effect, as promptly as practicable, the registration under the Securities Act
of:
(i) the Registrable Securities which Micro has been so
requested to register by the Section 2.01 Holder; and
(ii) all other Registrable Securities which Micro has been
requested to register by any other Holder pursuant to Section 2.02, by
written request received by Micro within ten Business Days after the
giving of such written notice by Micro, and all other securities which
Micro has been requested to register pursuant to an agreement entered
into with a Grantee;
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; provided that:
(X) Micro shall not be obligated to file a registration
statement relating to a registration request made by the Qtip Trust
pursuant to this Section 2.01 more than once during any 12-month period
or sooner than three months following the effective date of a Public
Offering in which the Qtip Trust and the other Ingram Stockholders were
entitled to include Registrable Securities, unless the number of
Registrable Securities requested to be included in such Public Offering
by the Qtip Trust and the other Ingram Stockholders was in excess of
125% of the number of such Registrable Securities actually included;
(Y) Except as otherwise specifically provided herein, Micro
shall in no event be obligated to effect more than three registrations
requested by the Qtip Trust pursuant to this Section 2.01, more than
one registration requested by the Initiating Family Stockholders
pursuant to this Section 2.01, or more than one registration requested
by the Demanding Holders pursuant to this Section 2.01. Except as
otherwise specifically provided herein, none of such regististrations
may be requested after the expiration of 84 months following the
initial Public Offering;
(Z) with respect to any registration statement filed or to be
filed pursuant to this Section 2.01, if the Board of Directors of Micro
shall determine, in its good faith judgment, that to maintain the
effectiveness of such registration statement or to permit such
registration statement to become effective (or, if no registration
statement has yet been filed, to file such a registration statement)
would be significantly disadvantageous to Micro (a "DISADVANTAGEOUS
CONDITION"), Micro may, for the shortest period possible but not more
than a period of 120 days from the date of the Board's determination,
cause such registration statement to be withdrawn and the effectiveness
of such registration
B-6
statement to be temporarily suspended or, if no registration
statement has yet been filed, delay the filing of such
registration statement.
Promptly after the expiration of the ten Business Day period referred to in
clause (ii) above, Micro shall notify each holder of Registrable Securities
to be included in the registration of the other Holders and Grantees
requesting securities to be included therein and the number of shares
requested to be included therein. The Qtip Trust, or the Initiating Family
Stockholders or Demanding Holders owning a majority of the Registrable
Securities requested to be included in such registration by all Initiating
Family Stockholders or Demanding Holders, respectively, may, at any time
prior to the effective date of the registration statement relating to such
registration, revoke such request, without liability (except as set forth
below) to any other Holder holding Registrable Securities requested to be
registered pursuant to clause (ii) above or any Grantee, by providing a
written notice to Micro revoking such request; provided that, if as a
result thereof such registration is abandoned, all Registration Expenses
and all other fees and expenses reasonably incurred by other Holders and
Grantees including securities in such registration shall be borne by the
Section 2.01 Holder, on a pro rata basis (in the case of any such
registration requested by the Initiating Family Stockholders or Demanding
Holders) according to the relative number of shares requested to be
included in such registration by each such Initiating Family Stockholder or
Demanding Holder, respectively. If Micro determines to take any action
pursuant to clause (Z) above, Micro shall deliver a notice to the Section
2.01 Holder and to any holder of securities being sold pursuant to an
effective registration statement to such effect. Upon the receipt of any
notice delivered as a result of a determination by Micro to take action
pursuant to clause (Z) above, such Persons shall forthwith discontinue use
of the prospectus contained in such registration statement and, if so
directed by Micro, shall deliver to Micro all copies of the prospectus
delivered to such Persons then covering such securities current at the time
of receipt of such notice (or, if no registration statement has yet been
filed, all drafts of the prospectus delivered to such Persons covering such
securities). If any Disadvantageous Condition shall cease to exist, Micro
shall promptly notify the Section 2.01 Holder (and any other holder whose
securities shall have ceased to be sold pursuant to an effective
registration statement as a result of such Disadvantageous Condition) to
such effect. If so requested by the Section 2.01 Holder, Micro shall, if
any registration statement shall have been withdrawn, at such time as it is
possible or, if earlier, at the end of the 120-day period following such
withdrawal, file a new registration statement covering the securities that
were covered by such withdrawn registration statement, and the
effectiveness of such registration statement shall be maintained for such
time as may be necessary so that the period of effectiveness of such new
registration statement, when aggregated with the period during which such
withdrawn registration statement was effective, if any, shall be such time
as may be otherwise required by this Agreement.
(b) Registration Statement Form. If, pursuant to a registration
request under this Section 2.01, Micro proposes to effect registration by
filing of a registration statement
B-7
on Form S-3 (or any successor or similar short-form registration statement) and
any managing underwriter shall advise Micro in writing that, in its opinion, the
use of another form of registration statement is of material importance to the
success of such proposed offering, then such registration shall be effected on
such other form.
(c) Expenses. Except as specifically provided herein, Micro shall pay
all Registration Expenses in connection with the registrations which are
requested pursuant to this Section 2.01 and all Registration Expenses incurred
by Holders of Registrable Securities as a result of Micro's withdrawal or delay
of any registration pursuant to Section 2.01(a)(ii)(Z). Each Holder shall pay
all underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of such Holder's Registrable Securities pursuant to a
registration statement requested pursuant to this Section 2.01.
(d) Effective Registration Statement. A registration requested
pursuant to this Section 2.01 shall not be deemed to have been effected until
such registration has been effective (and not subject to any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason) for a period of 120 days following the date on
which such registration was declared effective, or, if earlier, the date on
which all Registrable Securities requested to be registered thereunder have been
sold or withdrawn from sale by notice to Micro.
(e) Selection of Underwriters. If any registration pursuant to this
Section 2.01 is in the form of an underwritten Public Offering, Micro shall have
the right to select the managing underwriter or co-managing underwriters for
such Public Offering, which underwriter or underwriters shall be reasonably
acceptable to the Qtip Trust, or the Initiating Family Stockholders or Demanding
Holders owning a majority of Registrable Securities requested to be included in
such registration by all Initiating Family Stockholders or Demanding Holders,
respectively.
(f) Maximum Offering Size. If a registration pursuant to this Section
2.1 involves an underwritten Public Offering and the managing underwriter shall
advise Micro that, in its view, the number or proposed mix of equity securities
requested to be included in such registration (including securities which Micro
requests to be included which are not Registrable Securities) exceeds the
largest number or appropriate mix of securities (which mix shall in any event
give priority to the securities requested to be registered by the Qtip Trust,
the Initiating Family Stockholders or the Demanding Holders, as the case may be,
in the manner set forth below) which can be sold without having a material
adverse effect on such offering (the "MAXIMUM OFFERING SIZE"), including the
price at which such securities can be sold, Micro will reduce the number of
securities requested to be registered until such registration no longer exceeds
the Maximum Offering Size as follows:
B-8
(i) first, until such time as the Registrable Securities
requested to be included in such registration by all Persons other than
the Section 2.01 Holder have been reduced to 50% of the number of
Registrable Securities requested to be registered by the Section 2.01
Holder, the Registrable Securities requested to be registered by such
Persons shall be reduced on a pro rata basis among them (excluding the
Section 2.01 Holder) according to the relative number of shares each
such Person has requested to be included in such registration;
(ii) second, until such time as the Registrable Securities
requested to be included in such registration by the Section 2.01
Holder have been reduced by 50%, the Registrable Securities requested
to be included in such registration by the Section 2.01 Holder pursuant
to Section 2.01(a)(i), the Registrable Securities requested to be
included in such registration by any other Holders pursuant to Section
2.01(a)(ii) and the securities requested to be included in such
registration by Grantees pursuant to the terms of their agreements with
Micro shall be reduced on a pro rata basis among them according to the
relative number of shares that each such Person has requested to be
included in such registration;
(iii) third, any remaining securities requested to be
included in such registration by all other Holders pursuant to Section
2.01(a)(ii) and by all Grantees pursuant to the terms of their
agreements with Micro shall be reduced on a pro rata basis among them
according to the relative number of shares each such Person has
requested to be included in such registration; and
(iv) fourth, any remaining Registrable Securities
requested to be included in such registration pursuant to Section
2.01(a)(i) by the Section 2.01 Holder shall be reduced.
Any reduction of shares of Registrable Securities made among the shares of
Registrable Securities requested to be included in any registration pursuant to
Section 2.01(a)(i) by the Qtip Trust shall be made on a basis to be mutually
agreed among the Holders of such Registrable Securities. Any such reduction of
shares of Registrable Securities requested to be included by the Initiating
Family Stockholders or Demanding Holders, respectively, shall be made on a pro
rata basis among such Holders according to the relative number of shares each
such Holder has requested to be included in such registration.
(g) Subsequent Grants. Micro hereby agrees that it will not (i) at any
time after the date hereof, grant to any Person any registration rights that
conflict with, or have priority over, the registration rights granted hereby or
(ii) grant any registration rights with respect to securities held by any Person
which permit such Person to exercise a demand registration right sooner than
three months following the effective date of a Public Offering in which such
Person was entitled to include securities, unless the number of
B-9
securities requested to be included in such Public Offering by such Person was
in excess of 125% of the number of such securities actually included.
SECTION 2.02. Incidental ("Piggy-Back") Registration. (a) If, following
the initial Public Offering, Micro at any time proposes to register any of its
equity securities (the "PRIORITY SECURITIES") under the Securities Act (other
than a registration (i) on Form S-8 or S-4 or any successor or similar forms,
(ii) relating to shares of common stock issuable upon exercise of stock options
or in connection with any employee benefit or similar plan of Micro, (iii) in
connection with a direct or indirect acquisition by Micro of another Person or
(iv) pursuant to a shelf registration of securities pursuant to Rule 415 under
the Securities Act), whether for sale for its own account or for the account of
any other Person, in a manner which would permit registration of Registrable
Securities for sale to the public under the Securities Act, it will each such
time, subject to the provisions of Section 2.02(b), give prompt written notice
to the Holders of record holding Registrable Securities of its intention to do
so and of such Holders' rights under this Section 2.02, at least 30 days prior
to the anticipated filing date of the registration statement relating to such
registration. Any such notice shall offer all such Holders the opportunity to
include in such registration such number of Registrable Securities as each such
Holder may request. Upon the written request of any such Holder made within 20
days after the receipt of notice from Micro (which request shall specify the
number of Registrable Securities intended to be disposed of by such Holder and
the intended method of disposition thereof), Micro will use its best efforts to
effect the registration under the Securities Act and any related qualification
or other compliance of all Registrable Securities which Micro has been so
requested to register by the Holders thereof, to the extent required to permit
the disposition (in accordance with such intended methods thereof) of the
Registrable Securities so to be registered; provided that (i) if such
registration involves an underwritten Public Offering, all Holders holding
Registrable Securities requesting to be included in Micro's registration must
sell their Registrable Securities to the underwriters selected by Micro on the
same terms and conditions as apply to the Person for whose account the Priority
Securities are being sold, (ii) if, at any time after giving written notice
pursuant to this Section 2.02 of its intention to register any securities and
prior to the effective date of the registration statement filed in connection
with such registration, Micro shall determine for any reason not to proceed with
such registration (with respect to all of such securities requested to be
registered), Micro shall give written notice to the Holders holding Registrable
Securities and shall be relieved of its obligation to register any Registrable
Securities in connection with such registration but shall not be relieved from
its obligation to pay the Registration Expenses in connection therewith as
provided in this Section 2.02, without prejudice, however, to the rights of the
Section 2.01 Holder to request that such registration be effected as a
registration under Section 2.01 to the extent so entitled and (iii) no Holder
may request the registration of any Registrable Securities pursuant to this
Section 2.02 after the expiration of 84 months following the initial Public
Offering. If a registration pursuant to this Section 2.02 involves an
underwritten Public Offering, each Holder of Registrable Securities requesting
B-10
to be included in such registration may elect, in writing not less than five
Business Days prior to the effective date of the registration statement filed in
connection with such registration, not to register such securities in connection
with such registration. No registration effected under this Section 2.02 shall
relieve Micro of its obligations to effect registrations upon request under
Section 2.01. Micro will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 2.02,
and each such Holder shall pay underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a registration statement effected pursuant to
this Section 2.02.
(b) Maximum Offering Size. If a registration pursuant to this Section
2.02 involves an underwritten Public Offering and the managing underwriter shall
advise Micro that, in its view, the number or mix of securities of Micro
(including all Registrable Securities) which Micro, the Holders and any other
Persons intend to include in such registration exceeds the Maximum Offering
Size, Micro will reduce the number of securities requested to be registered
until such registration no longer exceeds the Maximum Offering Size as follows:
(i) If the registration was initiated by Micro for the
sale of Priority Securities for its own account:
(1) first, Priority Securities to be sold for the account
of holders of Priority Securities other than Micro,
Registrable Securities requested to be included in such
registration pursuant to Section 2.02(a) by Holders holding
Registrable Securities and securities requested to be included
in such registration by Grantees pursuant to the terms of
their agreements with Micro shall be reduced on a pro rata
basis among them according to the relative number of shares
each such Person has requested to be included in such
registration; and
(2) second, Priority Securities to be sold for Micro's
own account shall be reduced.
(ii) If the registration was initiated at the request of a
holder (a "PRIORITY HOLDER") of Priority Securities to be sold for the
account of such Priority Holder:
(1) first, until such time as the Registrable Securities
requested to be included in such registration by the Priority
Holder have been reduced by 50%, the Priority Securities
requested to be included in such registration by the Priority
Holder and the securities requested to be included in such
registration by the Holders pursuant to Section 2.02 and by
the Grantees pursuant to the terms of their agreements with
Micro shall be reduced on a
B-11
pro rata basis among them according to the relative number of
shares each such Person has requested to be included in such
registration;
(2) second, any remaining securities requested to be
included in such registration by the Holders pursuant to
Section 2.02 and by all Grantees pursuant to the terms of
their agreements with Micro shall be reduced on a pro rata
basis among them according to the relative number of shares
each such Person has requested to be included in such
registration; and
(3) third, any remaining Priority Securities requested to
be included in such registration by the Priority Holder shall
be reduced.
SECTION 2.03. Holdback Agreements. Each Holder holding Registrable
Securities agrees not to effect any public sale or distribution, including any
sale pursuant to Rule 144 or any successor provision under the Securities Act,
of any Registrable Securities, and not to effect any such public sale or
distribution of any other equity security of Micro or of any security
convertible into or exchangeable or exercisable for any equity security of Micro
(in each case, other than (x) as part of any registration pursuant to the terms
hereof of Registrable Securities in connection with a Public Offering or (y) any
sale or distribution of Registrable Securities received upon the exercise of
stock options) during the 14 days prior to, and during (i) the 180-day period
(in the case of an initial Public Offering), (ii) the 60-day period (in the case
of a shelf registered offering) or (iii) otherwise the 120-day period beginning
on, the effective date (or the commencement of a take-down in the case of a
shelf registered offering) of such registration statement (except as part of
such registration or take-down); provided that each such Holder has received
written notice of such registration or take-down at least two Business Days
prior to the anticipated beginning of the 14-day period referred to above.
SECTION 2.04. Registration Procedures. Whenever a Holder requests that
any Registrable Securities be registered pursuant to Section 2.01 or 2.02, Micro
shall, subject to the provisions of such Sections, use its best efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof as quickly as
practicable, and in connection with any such request:
(a) Micro will as expeditiously as possible prepare and file with the
Commission a registration statement on any form for which Micro then qualifies
or which counsel for Micro shall deem appropriate and which form shall be
available for the sale of the Registrable Securities to be registered thereunder
in accordance with the intended method of distribution thereof, and use its best
efforts to cause such filed registration statement to become and remain
effective for a period of not less than 120 days.
B-12
(b) Micro will, if requested, at least three Business Days prior to
filing a registration statement or prospectus or any amendment or supplement
thereto, furnish to each Holder and each underwriter, if any, of the Registrable
Securities covered by such registration statement copies of such registration
statement as proposed to be filed (including documents to be incorporated by
reference therein) which documents will be subject to the reasonable review and
comments of such Holders (and their respective attorneys) during such three
Business Day period and Micro will not file any registration statement, any
prospectus or any amendment or supplement thereto (or any such documents
incorporated by reference) containing any statements with respect to such
Holders to which the holders of a majority of the Registrable Securities to be
included in such registration shall reasonably object in writing. Thereafter
Micro will furnish to such Holder and underwriter, if any, such number of copies
of such registration statement, each amendment and supplement thereto (and, if
requested, all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Holder or underwriter
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Holder.
(c) After the filing of the registration statement, Micro will
promptly notify each Holder of Registrable Securities covered by such
registration statement of the effectiveness thereof and of any stop order issued
or threatened by the Commission and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered and promptly
notify such Holder of such lifting or withdrawal of such order.
(d) Micro will use its best efforts (i) to register or qualify the
Registrable Securities under such other securities or blue sky laws of such
jurisdictions in the United States as any Holder of Registrable Securities
covered by such registration statement reasonably (in light of such Holder's
intended plan of distribution) requests and (ii) to cause such Registrable
Securities to be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and operations of
Micro and do any and all other acts and things that may be reasonably necessary
or advisable to enable such Holder to consummate the disposition of the
Registrable Securities owned by such Holder; provided that Micro will not be
required (x) to qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (y) to
subject itself to any material risk of taxation in any such jurisdiction or (z)
to consent to general service of process in any such jurisdiction.
(e) Micro will immediately notify each Holder of Registrable
Securities covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
occurrence of an event requiring the preparation of a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain
B-13
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and promptly make available to each such Holder any such supplement
or amendment, and Micro will promptly prepare and furnish to each such Holder a
supplement to or an amendment of such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain any untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading.
(f) Micro will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities.
(g) Micro will make available for inspection by any Holder of
Registrable Securities covered by such registration statement, any underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other professional retained by any such Holder or
underwriter (collectively, the "INSPECTORS"), all financial and other records,
pertinent corporate documents and properties of Micro (collectively, the
"RECORDS") as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause Micro's officers, directors and employees to
make themselves available to, and supply all information reasonably requested
by, any Inspectors in connection with such registration statement. Records which
Micro determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in such registration statement or (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction. Each such Holder agrees that information obtained by it as a
result of such inspections shall be deemed confidential and shall not be used by
it as the basis for any market transactions in the securities of Micro or its
Affiliates unless and until such is made generally available to the public. Each
such Holder further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to Micro and
allow Micro, at its expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential.
(h) Micro will furnish to each Holder of Registrable Securities
covered by such registration statement and to each underwriter, if any, a signed
counterpart of (i) an opinion or opinions of counsel to Micro addressed to such
Holder and underwriter on which opinion both such Holder and such underwriter
are entitled to rely and (ii) a comfort letter or comfort letters from Micro's
independent public accountants, each in then customary form and covering such
matters of the type then customarily covered by opinions or comfort letters, as
the case may be, as the holders of a majority of the Registrable Securities
included in such registration statement or the managing underwriter therefor
reasonably requests.
B-14
(i) Micro will otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
(j) Micro will use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange, if any, on which similar
securities issued by Micro are then listed.
(k) Micro will use its best efforts to prepare and file with the
Commission promptly upon the request of any such Holder, any amendments or
supplements to such registration statement or prospectus which, in the
reasonable opinion of counsel for such Holders, is required under the Securities
Act or the rules and regulations thereunder in connection with the distribution
of the Registrable Securities by such Holders.
Micro may require each Holder of Registrable Securities included in
such registration statement promptly to furnish in writing to Micro such
information regarding the distribution of the Registrable Securities as Micro
may from time to time reasonably request and such other information with respect
to such Holder as may be legally required in connection with such registration.
Each Holder agrees that, upon receipt of any notice from Micro of the
happening of any event of the kind described in Section 2.04(e), such Holder
will forthwith discontinue disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 2.04(e), and, if so directed by Micro, such Holder will deliver to Micro
all copies in its possession of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event Micro
shall give such notice, Micro shall extend the period during which the
effectiveness of such registration statement shall be maintained (including the
period referred to in Section 2.04(a) hereof) by the number of days during the
period from and including the date of the giving of notice pursuant to Section
2.04(e) to the date when Micro shall make available to such Holder a prospectus
supplemented or amended to conform with the requirements of Section 2.04(e).
Micro shall not be liable for the failure of any such registration to
become effective provided that Micro complies with its obligations hereunder.
SECTION 2.05. Indemnification by Micro. Micro agrees to indemnify and
hold harmless to the fullest extent permitted by law each Holder of Registrable
Securities covered by a registration statement, its officers, directors and
agents, and each Person, if
B-15
any, who controls such Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages, liabilities and expenses caused by any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Securities (as amended or
supplemented if Micro shall have furnished any amendments or supplements
thereto) or any preliminary, summary or final prospectus or any amendments or
supplements thereto, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading and Micro will reimburse such Holders for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending such loss, claim, damage, liability or expense except
insofar as such losses, claims, damages, liabilities or expenses are caused by
any such untrue statement or omission or alleged untrue statement or omission
based upon information furnished in writing to Micro by such Holder or on such
Holder's behalf in either such case expressly for use therein; provided, that
with respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, or in any prospectus, as the case
may be, the indemnity agreement contained in this paragraph shall not apply to
the extent that any such loss, claim, damage, liability or expense results from
the fact that a current copy of the prospectus (or, in the case of a prospectus,
the prospectus as amended or supplemented) was not sent or given to the Person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable Securities concerned to such
Person if it is determined that Micro has provided such prospectus and it was
the responsibility of such Holder to provide such Person with a current copy of
the prospectus (or such amended or supplemented prospectus, as the case may be)
and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to such
loss, claim, damage, liability or expense. Micro also agrees to indemnify any
underwriters of the Registrable Securities, their officers and directors and
each Person who controls such underwriters on substantially the same basis as
that of the indemnification of the Holders provided in this Section 2.05.
SECTION 2.06. Indemnification by Holders of Registrable Securities.
Each Holder of Registrable Securities included in any registration statement
agrees to indemnify and hold harmless to the fullest extent permitted by law
(including without limitation reimbursement of Micro for any legal or any other
expenses reasonably incurred by it in investigating or defending such loss,
claim, damage, liability or expense) Micro, its officers, directors and agents
and each Person, if any, who controls Micro within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from Micro to such Holder, but only (i) with respect to
information furnished in writing by such Holder or on such Holder's behalf in
either case expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary, summary or final prospectus or any amendments or supplements
thereto or (ii) to the
B-16
extent that any loss, claim, damage, liability or expense described in Section
2.05 results from the fact that a current copy of the prospectus (or, in the
case of a prospectus, the prospectus as amended or supplemented) was not sent or
given to the Person asserting any such loss, claim, damage, liability or expense
at or prior to the written confirmation of the sale of the Registrable
Securities concerned to such Person if it is determined that it was the
responsibility of such Holder to provide such Person with a current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be) and
such current copy of the prospectus (or such amended or supplemented prospectus,
as the case may be) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. Each such Holder also agrees to indemnify and hold
harmless underwriters of the Registrable Securities, their officers and
directors and each Person who controls such underwriters on substantially the
same basis as that of the indemnification of Micro provided in this Section
2.06.
SECTION 2.07. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 2.05 or 2.06, such Person (an "INDEMNIFIED PARTY") shall promptly notify
the Person against whom such indemnity may be sought (the "INDEMNIFYING PARTY")
in writing and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Party, and shall assume the payment of all fees and expenses. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
Indemnified Party has been advised in writing by its counsel that representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Parties. In the case of any such
separate firm for the Indemnified Parties, such firm shall be designated in
writing by the Indemnified Party who had the largest number of Registrable
Securities included in such registration. The Indemnifying Party shall not be
liable for any settlement of any proceeding effected without its written consent
which consent shall not be unreasonably withheld, but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such proceeding.
B-17
SECTION 2.08. Contribution. If the indemnification provided for
hereunder is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities (i) as between Micro and the Holders on the one
hand and the underwriters on the other, in such proportion as is appropriate to
reflect the relative benefits received by Micro and the Holders on the one hand
and the underwriters on the other from the offering of the securities, or if
such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also the relative
fault of Micro and the Holders on the one hand and of the underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between Micro on the one hand and each Holder of
Registrable Securities covered by a registration statement on the other, in such
proportion as is appropriate to reflect the relative fault of Micro and of each
such Holder in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by Micro
and the Holders on the one hand and the underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting expenses)
received by Micro and the Holders bear to the total underwriting discounts and
commissions received by the underwriters, in each case as set forth in the table
on the cover page of the prospectus. The relative fault of Micro and the Holders
on the one hand and of the underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by Micro and the Holders or by the underwriters.
The relative fault of Micro on the one hand and of each such Holder on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
Micro and the Holders of Registrable Securities agree that it would not
be just and equitable if contribution pursuant to this Section 2.08 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages or liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 2.08, no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities underwritten by it
and distributed to the public were
B-18
offered to the public exceeds the amount of any damages which such underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section, no Holder shall be required to contribute any amount in excess of
the amount by which the total price at which the securities of such Holder were
offered to the public exceeds the amount of any damages which such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Each Holder's obligation to contribute pursuant to
this Section 2.08 is several in the proportion that the proceeds of the offering
received by such Holder bears to the total proceeds of the offering received by
all of the Holders and not joint.
SECTION 2.09. Participation in Public Offering. No Person may
participate in any underwritten Public Offering hereunder unless such Person (i)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreement, custody agreements and other
documents reasonably required under the terms of such underwriting arrangements
and these Registration Rights.
SECTION 2.10. Rule 144 Reporting. With a view to making available to
the Holders the benefits of certain rules and regulations of the Commission
which may permit the sale of securities to the public without registration,
Micro agrees to:
(a) make and keep public information available as those terms are
understood and defined in Rule 144 (including paragraph (c)(2) of such Rule);
(b) use its best efforts to file with the Commission in a timely
manner reports and other documents, if any, required of Micro under the
Securities Act and the Exchange Act; and
(c) furnish to the Holders forthwith upon request a written statement
by Micro as to its compliance with the reporting requirements of Rule 144, and
of the Securities Act and the Exchange Act (if applicable), a copy of the most
recent annual or quarterly report of Micro filed with the Commission, if any,
and such other reports and documents of Micro and other information in the
possession of or reasonably obtainable by Micro as the Holders may reasonably
request in availing themselves of any rule or regulation of the Commission
allowing the Holders to sell securities without registration.
B-19
ARTICLE 3
MISCELLANEOUS
SECTION 3.01. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof.
SECTION 3.02. Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to another party hereto shall
be in writing (including telecopier or similar writing) and shall be given to
such party at its address set forth on the signature pages hereof, or to such
other address as the party to whom notice is to be given may provide in a
written notice to the party giving such notice, a copy of which written notice
shall be on file with the Secretary of Micro. If notice is given pursuant to
this Section of a permitted successor or assign of a party to this Agreement,
then notice shall thereafter be given as set forth above to such successor or
assign of such party to this Agreement. Each such notice, request or other
communication shall be effective (i) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified on the signature pages hereof and
electronic or oral confirmation of receipt is received, (ii) if given by mail,
at the close of business on the third Business Day after such communication is
deposited in the mails with first class postage prepaid addressed as aforesaid
or (iii) if given by any other means, when delivered at the address specified in
this Section 3.02.
SECTION 3.03. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the conflicts of law rules of such state.
SECTION 3.04. Successors, Assigns, Transferees. Neither this Agreement
nor any right, remedy, obligation or liability arising hereunder or by reason
hereof shall be assignable by Micro or any Holder, except to a Permitted
Transferee of any such Holder as provided pursuant to the terms hereof. This
Agreement is binding upon the parties to this Agreement and their respective
legal representatives, heirs, devisees, legatees, beneficiaries and successors
and permitted assigns and inures to the benefit of the parties to this Agreement
and their respective permitted legal representatives, heirs, devisees, legatees,
beneficiaries and other permitted successors and assigns, if any. Neither this
Agreement nor any provision hereof shall be construed so as to confer any right
or benefit upon any Person other than the parties to this Agreement, those who
agree to be bound hereby and their respective permitted legal representatives,
heirs, devisees, legatees, beneficiaries and other permitted successors and
assigns. References to a party to this Agreement are also references to any
permitted successor or assign of such party and, when appropriate to effect the
binding nature of this Agreement for the benefit of another party, any other
successor or assign of a party.
B-20
SECTION 3.05. Amendments; Waivers. (a) No failure or delay on the part
of any party 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
not exclusive of any rights or remedies provided by law.
(b) Neither this Agreement nor any term or provision hereof may be
waived except by an instrument in writing signed by (i) each Ingram Stockholder,
(ii) Micro, (iii) the Ingram Thrift Plan; provided that the Ingram Thrift Plan
is materially adversely affected by such waiver, and (iv) Holders of a majority
of the Registrable Securities which are materially adversely affected by such
waiver.
(c) Neither this Agreement nor any term or provision hereof may be
amended except by an instrument in writing signed by (i) each Ingram
Stockholder, (ii) Micro, (iii) the Ingram Thrift Plan; provided that the Ingram
Thrift Plan is materially adversely affected by such amendment, and (iv) Holders
of a majority of the Registrable Securities (excluding those held by the Ingram
Stockholders and the Ingram Thrift Plan) which are materially adversely affected
by such amendment.
(d) Micro shall deliver prompt written notice to each other party
hereto of any amendment or waiver to this Agreement approved pursuant to this
Section.
SECTION 3.06. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.
SECTION 3.07. Consent to Jurisdiction. Each party hereto irrevocably
submits to the non-exclusive jurisdiction of any Tennessee State Court or
United States Federal Court sitting in the Middle District of Tennessee
over any suit, action or proceeding arising out of or relating to this
Agreement. Each party hereto (other than Micro) hereby irrevocably
appoints CT Corporation System Company as its authorized agent to accept
and acknowledge on its behalf service of any and all process which may be
served in any such suit, action or proceeding in any such court and
represents and warrants that such agent has accepted such appointment.
Each party hereto consents to process being served in any such suit, action
or proceeding by serving a copy thereof upon the agent for service of
process, provided that to the extent lawful and possible, written notice of
such service shall also be mailed to such party. Each party hereto waives
any right it may have to assert the doctrine of forum non conveniens or to
object to venue to the extent any proceeding is brought in accordance with
this Section 3.07. Nothing in this paragraph shall affect or limit any
right to serve process in any manner permitted by law, to bring proceedings
in the courts of any jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.
B-21
SECTION 3.08. Community Property. If such Holder's Registrable
Securities constitute community property, this Agreement has been executed and
delivered by such Holder's spouse, who shall be bound hereby.
B-22
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
INGRAM MICRO INC.
By: /s/ Jeffrey R. Rodek
---------------------------------
Name: Jeffrey R. Rodek
Title: President
1600 Saint Andrew Place
Santa Ana, CA 92705
Telecopy: 714-566-7900
B-23
HOLDERS E. BRONSON INGRAM
Q-TIP MARITAL TRUST
By MARTHA R. INGRAM, ORRIN H. INGRAM,
JOHN R. INGRAM, DAVID B. INGRAM AND
ROBIN I. PATTON, as Co-Trustees
By: /s/ Martha R. Ingram
---------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
By: /s/ Orrin H. Ingram
---------------------------------
Name: Orrin H. Ingram
Title: Co-Trustee
Address: 1475 Moran Road
Franklin, TN 37069
By: /s/ John R. Ingram
---------------------------------
Name: John R. Ingram
Title: Co-Trustee
Address: 311 Jackson Boulevard
Nashville, TN 37205
By: /s/ David B. Ingram
---------------------------------
Name: David B. Ingram
Title: Co-Trustee
Address: 4417 Tyne Boulevard
Nashville, TN 37215
By: /s/ Robin I. Patton
---------------------------------
Name: Robin I. Patton
Title: Co-Trustee
Address: 1600 Chickering Road
Nashville, TN 37215
B-24
E. BRONSON INGRAM 1995 CHARITABLE
REMAINDER 5% UNITRUST
By MARTHA R. INGRAM, as Trustee
By: /s/ Martha R. Ingram
---------------------------------
Name: Martha R. Ingram
Title: Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
MARTHA AND BRONSON INGRAM
FOUNDATION
By: /s/ John R. Ingram
---------------------------------
Name: John R. Ingram
Title: President
Address: c/o Ingram Industries Inc.
4440 Harding Road
Nashville, TN 37205
(615) 298-8200
E. BRONSON INGRAM 1994
CHARITABLE LEAD ANNUITY TRUST
By ORRIN H. INGRAM, JOHN R. INGRAM,
DAVID B. INGRAM, AND ROBIN B.
INGRAM PATTON, as Co-Trustees
By: /s/ Orrin H. Ingram
---------------------------------
Name: Orrin H. Ingram
Title: Co-Trustee
Address: 1475 Moran Road
Franklin, TN 37069
B-25
By: /s/ John R. Ingram
---------------------------------
Name: John R. Ingram
Title: Co-Trustee
Address: 311 Jackson Boulevard
Nashville, TN 37205
By: /s/ David B. Ingram
---------------------------------
Name: David B. Ingram
Title: Co-Trustee
Address: 4417 Tyne Boulevard
Nashville, TN 37215
By: /s/ Robin B. Ingram Patton
---------------------------------
Name: Robin B. Ingram Patton
Title: Co-Trustee
Address: 1600 Chickering Road
Nashville, TN 37215
INGRAM THRIFT PLAN
By W.M. HEAD, R.E. CLAVERIE AND
T.H. LUNN, as Co-Trustees
By: /s/ William M. Head
---------------------------------
Name: William M. Head
Title: Co-Trustee
Address: 1229 Nichol Lane
Nashville, TN 37205
By: /s/ R.E. Claverie
---------------------------------
Name: R.E. Claverie
Title: Co-Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
B-26
By: /s/ T.H. Lunn
---------------------------------
Name: T.H. Lunn
Title: Co-Trustee
Address: 509 Sugartree Lane
Franklin, TN 37064
/s/ Linwood A. Lacy, Jr.
---------------------------------
Linwood A. Lacy, Jr.
2304 Cranborne Road
Midlothian, VA 23113
LINWOOD A. LACY, JR.
1996 IRREVOCABLE TRUST DATED
MARCH 24, 1996
By NATIONSBANK, N.A, as Trustee
By: /s/ Philip L. Rudder
---------------------------------
Name: Philip L. Rudder
Title: Vice President
Address: NationsBank, N.A.
Attention: Phil Rudder,
Vice President
12th and Main, 12th Floor
Richmond, VA 23261
/s/ Dana N. Rutledge /s/ David W. Rutledge
_____________________________ _____________________________________
Spouse David W. Rutledge
34 Deerwood East
Irvine, CA 92714
/s/ Deborah S. Hardaway /s/ Ronald K. Hardaway
_____________________________ _____________________________________
Spouse Ronald K. Hardaway
2 Moss Glen
Irvine, CA 92715
B-27
/s/ Victoria L. Cotten
_____________________________________
Victoria L. Cotten
8 Medici
Aliso Viejo, CA 92656
/s/ David B. Ingram
_____________________________________
David B. Ingram
4417 Tyne Boulevard
Nashville, TN 37215
DAVID AND SARAH INGRAM FAMILY 1996
GENERATION SKIPPING TRUST
By THOMAS H. LUNN, as Trustee
By: /s/ Thomas H. Lunn
---------------------------------
Name: Thomas H. Lunn
Title: 509 Sugartree Lane
Address: Franklin, TN 37064
TRUST FOR THE BENEFIT OF DAVID BRONSON
INGRAM, DATED OCTOBER 27, 1967
By SUNTRUST BANK, ATLANTA,
successor trustee
By: /s/ Thomas A. Shanks, Jr.
---------------------------------
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
B-28
TRUST FOR THE BENEFIT OF DAVID BRONSON
INGRAM, DATED JUNE 14, 1968
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ M. Steven Carroll
---------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF DAVID B.
INGRAM, DATED DECEMBER 22, 1975
By SUNTRUST BANK, ATLANTA,
as Successor Trustee
By: /s/ Thomas A. Shanks, Jr.
---------------------------------
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
B-29
DAVID B. INGRAM IRREVOCABLE TRUST
DATED AUGUST 16, 1988
By ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
---------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
1994 DAVID BRONSON INGRAM TRUST
By ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
---------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
/s/ Thomas H. Lunn
______________________________________
Thomas H. Lunn
509 Sugartree Lane
Franklin, TN 37064
LUNN FAMILY PARTNERS, L.P.
By: /s/ Thomas H. Lunn
---------------------------------
as General Partner
By: /s/ Thomas H. Lunn
---------------------------------
Name: Thomas H. Lunn
Title:
Address: 509 Sugartree Lane
Franklin, TN 37064
B-30
/s/ Philip Maurice Pfeffer
______________________________________
Philip M. Pfeffer
836 Treemont Court
Nashville, TN 37220
PFEFFER FAMILY PARTNERS, L.P.
By: /s/ Pfeffer Enterprises, Inc.
---------------------------------
as General Partner
By: /s/ Philip Maurice Pfeffer
---------------------------------
Name: Philip Maurice Pfeffer
Title: President
Address: 836 Treemont Court
Nashville, TN 37220
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA INGRAM,
GRANTORS, AND EDWARD G. NELSON,
TRUSTEE FOR THE BENEFIT OF JOHN-LINDELL
PHILIP PFEFFER
By EDWARD G. NELSON, as Trustee
By: /s/ Edward G. Nelson
---------------------------------
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
/s/ John-Lindell Philip Pfeffer
_____________________________________
John-Lindell Philip Pfeffer
Rue General Patton, Sq.
1050 Brussels Belgium
B-31
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA INGRAM,
GRANTORS, AND EDWARD G. NELSON,
TRUSTEE FOR THE BENEFIT OF DAVID
MAURICE PFEFFER
By EDWARD G. NELSON, as Trustee
By: /s/ Edward G. Nelson
---------------------------------
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA INGRAM,
GRANTORS, AND EDWARD G. NELSON,
TRUSTEE FOR THE BENEFIT OF JAMES
HOWARD PFEFFER
By EDWARD G. NELSON, as Trustee
By: /s/ Edward G. Nelson
---------------------------------
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
/s/ Roy E. Claverie
_____________________________________
Roy E. Claverie
6107 Hickory Valley Road
Nashville, TN 37205
B-32
ROY E. CLAVERIE, JR.
1996 VESTED TRUST
By WILLIAM S. JONES, as Trustee
By: /s/ William S. Jones
---------------------------------
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
ROY E. CLAVERIE, JR. 1996
GENERATION SKIPPING TRUST
By WILLIAM S. JONES, as Trustee
By: /s/ William S. Jones
---------------------------------
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
KEITH J. CLAVERIE, JR.
1996 VESTED TRUST
By WILLIAM S. JONES, as Trustee
By: /s/ William S. Jones
---------------------------------
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
B-33
KEITH J. CLAVERIE, JR.
1996 GENERATION SKIPPING TRUST
By WILLIAM S. JONES, as Trustee
By: /s/ William S. Jones
---------------------------------
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA
INGRAM, GRANTORS, AND EDWARD G.
NELSON TRUSTEE FOR THE BENEFIT OF
KEITH JOSEPH CLAVERIE
By EDWARD G. NELSON, as Trustee
By /s/ Edward G. Nelson
----------------------------------
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
B-34
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA
INGRAM, GRANTORS, AND EDWARD G.
NELSON, TRUSTEE FOR THE BENEFIT OF
ROY EDWARD CLAVERIE, JR.
By EDWARD G. NELSON, as Trustee
By: /s/ Edward G. Nelson
---------------------------------
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
/s/ Roy E. Claverie, Jr.
____________________________________
Roy E. Claverie, Jr.
6107 Hickory Valley Road
Nashville, TN 37205
/s/ David F. Sampsell
____________________________________
David F. Sampsell
420 Welshwood #47
Nashville, TN 37211
/s/ Steven J. Mason
____________________________________
Steven J. Mason
1318 Chickering Road
Nashville, TN 37215
B-35
THE DAVID C. MASON
1996 GENERATION SKIPPING TRUST
By LINDA L. MASON AND MICHAEL G.
MASON, as Co-Trustees
By: /s/ Linda L. Mason
---------------------------------
Name: Linda L. Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
By: /s/ Michael Mason
---------------------------------
Name: Michael Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
THE MICHAEL G. MASON
1996 GENERATION SKIPPING TRUST
By LINDA L. MASON AND STEVEN J.
MASON, JR., as Co-Trustees
By: /s/ Linda L. Mason
---------------------------------
Name: Linda L. Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
By: /s/ Steven J. Mason, Jr.
---------------------------------
Name: Steven J. Mason, Jr.
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
B-36
THE STEVEN J. MASON, JR.
1996 GENERATION SKIPPING TRUST
By LINDA L. MASON AND DAVID C.
MASON, as Co-Trustees
By: /s/ Linda L. Mason
---------------------------------
Name: Linda L. Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
By: /s/ David C. Mason
---------------------------------
Name: David C. Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
/s/ Neil N. Diehl
_________________________________
Neil N. Diehl
6 Castle Rising
Nashville, TN 37215
/s/ W. Michael Head
_________________________________
W. Michael Head
1229 Nichol Lane
Nashville, TN 37205
/s/ David L. Hettinger
_________________________________
David L. Hettinger
5108 Woodland Hills Drive
Brentwood, TN 37027
/s/ Lavona G. Russell
_________________________________
Lavona G. Russell
9549 Butler Drive
Brentwood, TN 37027
B-37
/s/ Michael F. Lovett
_________________________________
Michael F. Lovett
1013 Beech Grove Road
Brentwood, TN 37027
/s/ William S. Jones
_________________________________
William S. Jones
6015 Wellesley Way
Brentwood, TN 37027
/s/ James F. Neal
_________________________________
James F. Neal
c/o Neal & Harwell
2000 One Nashville Place
150 Fourth Avenue, North
Nashville, TN 37219
/s/ Martha R. Ingram
_________________________________
Martha R. Ingram
120 Hillwood Drive
Nashville, TN 37215
/s/ Orrin H. Ingram, II
_________________________________
Orrin H. Ingram, II
1475 Moran Road
Franklin, TN 37069
B-38
TRUST FOR THE BENEFIT OF ORRIN HENRY
INGRAM, II, DATED OCTOBER 27, 1967
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ Thomas A. Shanks, Jr.
---------------------------------
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF ORRIN HENRY
INGRAM, II, DATED JUNE 14, 1968
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ Thomas A. Shanks, Jr.
---------------------------------
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
B-39
TRUST FOR THE BENEFIT OF ORRIN H.
INGRAM, II, DATED DECEMBER 22, 1975
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ M. Steven Carroll
---------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
ORRIN H. INGRAM IRREVOCABLE
TRUST DATED AUGUST 16, 1988
By ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
---------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
1994 ORRIN HENRY INGRAM TRUST
By ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
---------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
B-40
/s/ John R. Ingram
________________________________________
John R. Ingram
311 Jackson Boulevard
Nashville, TN 37205
THE JOHN AND STEPHANIE INGRAM
FAMILY 1996 GENERATION SKIPPING TRUST
By WILLIAM S. JONES, as Trustee
By: /s/ William S. Jones
---------------------------------
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
TRUST FOR THE BENEFIT OF JOHN
RIVERS INGRAM, DATED OCTOBER 27, 1967
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ M. Steven Carroll
---------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
B-41
TRUST FOR THE BENEFIT OF JOHN RIVERS INGRAM,
DATED JUNE 14, 1968
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ M. Steven Carroll
---------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF JOHN R.
INGRAM, DATED DECEMBER 22, 1975
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ M. Steven Carroll
---------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
B-42
JOHN R. INGRAM IRREVOCABLE TRUST
DATED AUGUST 16, 1988
By ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
---------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
1994 JOHN RIVERS INGRAM TRUST
By ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
---------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
/s/ Robin B. Ingram Patton
________________________________________
Robin B. Ingram Patton
1600 Chickering Road
Nashville, TN 37215
B-43
TRUST FOR THE BENEFIT OF ROBIN
INGRAM, DATED OCTOBER 27, 1967
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ M. Steven Carroll
---------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF ROBIN
BIGELOW INGRAM, DATED JUNE 14, 1968
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ M. Steven Carroll
---------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
B-44
TRUST FOR THE BENEFIT OF ROBIN B.
INGRAM, DATED DECEMBER 22, 1975
By SUNTRUST BANK, ATLANTA
as Successor Trustee
By: /s/ M. Steven Carroll
---------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
ROBIN B. INGRAM IRREVOCABLE
TRUST DATED AUGUST 16, 1988
By ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
---------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
1994 ROBIN INGRAM PATTON TRUST
By ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
---------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
B-45
/s/ Panjah P. Shah
________________________________________
Panjah P. Shah
1201 Parker Place
Brentwood, TN 37027-7002
/s/ S. Ray Taylor
________________________________________
S. Ray Taylor
3280 Central Valley Road
Murfreesboro, TN 37219
/s/ Jacob S. Sherman
________________________________________
Jacob S. Sherman
215 Lauderdale Road
Nashville, TN 37205
/s/ Susan R. Flaster
________________________________________
Susan R. Flaster
144 September Drive
La Vergne, TN 37086
B-46
EXHIBIT A
FORM OF AGREEMENT TO BE BOUND
To the Parties to the Registration
Rights Agreement dated as of
November 6, 1996
Dear Sirs:
Reference is made to the Registration Rights Agreement (the
"AGREEMENT") dated as of November 6, 1996 among Ingram Micro Inc. and the
Persons listed on the signature pages thereof.
In consideration of the transfer of Registrable Securities (as
defined in the Agreement) to the undersigned, the undersigned hereby
confirms and agrees to be bound by all of the provisions of the Agreement.
This letter shall be construed and enforced in accordance with the
laws of the State of Delaware without regard to the conflicts of law rules
of such state.
Very truly yours,
Permitted Transferee
ANNEX I
FAMILY STOCKHOLDERS
David B. Ingram
David and Sarah Ingram Family
1996 Generation Skipping Trust
Trust for the Benefit of David Bronson Ingram,
Dated October 27,1967
Trust for the Benefit of David Bronson Ingram,
Dated June 14, 1968
Trust for the Benefit of David B. Ingram,
Dated December 22, 1975
David B. Ingram Irrevocable Trust
Dated August 16, 1988
1994 David Bronson Ingram Trust
Martha R. Ingram
Orrin H. Ingram, II
Trust for the Benefit of Orrin Henry Ingram, II,
Dated October 27, 1967
Trust for the Benefit of Orrin Henry Ingram, II,
Dated June 14, 1968
Trust for the Benefit of Orrin H. Ingram, II,
Dated December 22, 1975
Orrin H. Ingram Irrevocable Trust
Dated August 16, 1988
1994 Orrin Henry Ingram Trust
John R. Ingram
John and Stephanie Ingram Family
1996 Generation Skipping Trust
Trust for the Benefit of John Rivers Ingram,
Dated October 27, 1967
Trust for the Benefit of John Rivers Ingram,
Dated June 14, 1968
Trust for the Benefit of John R. Ingram,
Dated December 22, 1975
John R. Ingram Irrevocable Trust
Dated August 16, 1988
1994 John Rivers Ingram Trust
Robin B. Ingram Patton
Trust for the Benefit of Robin Ingram,
Dated October 27, 1967
Trust for the Benefit of Robin Bigelow Ingram,
Dated June 14, 1968
Trust for the Benefit of Robin B. Ingram,
Dated December 22, 1975
Robin B. Ingram Irrevocable Trust
Dated August 16, 1988
1994 Robin Ingram Patton Trust
B-2
EXHIBIT 10.15
BOARD REPRESENTATION AGREEMENT
AGREEMENT dated as of November 6th, 1996 among Ingram Micro Inc., a
Delaware corporation ("Micro"), and each Person listed on the signature
pages hereof.
WHEREAS, Micro believes it is in the best interest of Micro and its
stockholders to become a free standing corporation rather than a subsidiary of
Ingram Industries Inc. ("Industries"); and
WHEREAS, Micro believes that the proposed Split-Off (as defined herein)
from Industries will facilitate its ability to raise capital, including its
initial public offering, and will allow Micro to more effectively design
incentives for its employees, all to the benefit of Micro and its
stockholders; and
WHEREAS, the Family Stockholders (as defined herein) are willing to
relinquish certain rights in exchange for the bargained for provisions of this
Agreement (all of which are, and are intended to be, an inducement for the
Family Stockholders to effect the Split-Off); and
WHEREAS, the parties hereto desire to provide for certain rights and
obligations relating to the composition and qualifications of the board of
directors of Micro following the date hereof;
Accordingly, in consideration of the mutual promises herein contained
and other good and valuable consideration, the receipt, sufficiency and
mutuality of which are hereby acknowledged by each of the parties hereto, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions.
(a) The following terms, as used herein, have the following meanings:
"Approving Family Stockholders" means the QTIP Marital Trust created
under the E. Bronson Ingram Revocable Trust Agreement dated January 4, 1995,
Martha R. Ingram, Orrin H. Ingram, II, John R. Ingram, David B. Ingram, Robin
B. Ingram Patton, E. Bronson Ingram 1995 Charitable Remainder 5% Unitrust,
Martha and Bronson Ingram Foundation, Trust for Orrin Henry Ingram, II, under
Agreement with E. Bronson Ingram dated October 27, 1967, Trust for the Benefit
of Orrin Henry Ingram, II, under Agreement with E. Bronson Ingram dated June
14, 1968, Trust for Orrin Henry Ingram, II, under Agreement with Hortense B.
Ingram dated December 22, 1975, The Orrin H. Ingram Irrevocable Trust dated
July 9, 1992, the Trust for the Benefit of Orrin H. Ingram established by
Martha R. Rivers under Agreement of Trust originally dated April 30, 1982,
as amended, the Trust for John Rivers Ingram, under Agreement with E.
Bronson Ingram dated October 27, 1967, the Trust for John Rivers Ingram,
under Agreement with Hortense B. Ingram dated December 22, 1975, The John
R. Ingram Irrevocable Trust dated July 9, 1992, the Trust for the Benefit
of John R. Ingram established by Martha R. Rivers under Agreement of
Trust originally dated April 30, 1982, The John and Stephanie Ingram Family
1996 Generation Skipping Trust, the Trust for David B. Ingram, under
Agreement with Hortense B. Ingram dated December 22, 1975, The David B.
Ingram Irrevocable Trust dated July 9, 1992, the Trust for the Benefit of
David B. Ingram established by Martha R. Rivers under Agreement of Trust
originally dated April 30, 1982, the David and Sarah Ingram Family 1996
Generation Skipping Trust, the Trust for Robin Bigelow Ingram, under
Agreement with E. Bronson Ingram dated October 27, 1967, Trust for Robin
Bigelow Ingram, under Agreement with Hortense B. Ingram dated December 22,
1975, The Robin Ingram Patton Irrevocable Trust, dated July 9, 1992 and
Trust for the Benefit of Robin B. Ingram established by Martha R. Rivers
under Agreement of Trust originally dated April 30, 1982, and all Permitted
Transferees of each such Person.
"Approving Voting Power" means, as of any date, the number of votes able
to be cast pursuant to Section 2.5(d) by the Approving Family Stockholders
consistent with Exhibit A hereto.
"Board" means the board of directors of Micro.
"Fair Market Value" means with respect to the Micro Common Shares, as of
any given date or dates, the reported closing price of a share of such class
of common stock on such exchange or market as is the principal trading market
for such class of common stock. If such class of common stock is not traded
on an exchange or principal trading market on such date, the fair market value
of a Micro Common Share shall be determined by the Board in good faith taking
into account as appropriate recent sales of the Micro Common Shares, recent
valuations of the Micro Common Shares, the lack of liquidity of the Micro
Common Shares, the fact that the Micro Common Shares may represent a minority
interest and such other factors as the Committee shall in its discretion deem
relevant or appropriate.
"Family Agent" means a Person appointed by a majority of the Approving
Voting Power of the Approving Family Stockholders from time to time as
provided in Section 3.13 of this Agreement.
"Family Stockholders" means the Persons listed on the signature pages
hereof (other than Micro) and all Permitted Transferees of each such Person.
"Independent" means, with respect to any Person, a Person who shall (i)
not be an executive officer or other employee of Micro and (ii) not be a
member of the Ingram Family.
"Ingram Family" means Martha R. Ingram, her descendants (including
adopted persons and their descendants) and their respective spouses.
"Micro Common Shares" means the shares of common stock of Micro,
including the Class B common stock and the Class A common stock, par value
$0.01 per share, of Micro.
"Outstanding Voting Power" means, as of any date, the number of votes
able to be cast for the election of directors represented by all Micro Common
Shares outstanding on such date.
"Permitted Transferee" means, with respect to any Family Stockholder,
any of the other Family Stockholders or any of their respective spouses,
descendants (including adopted persons and their descendants), estates,
affiliates or any trust or other entities for the benefit of any of the
foregoing Persons and beneficiaries of the E. Bronson Ingram QTIP Marital Trust
upon the death of Martha R. Ingram, whether the transfer occurs voluntarily
during life or at death, whether by appointment, will or intestate descent or
distribution. Without limiting the generality of the foregoing, transfers
from the QTIP Marital Trust created under the E. Bronson Ingram Revocable
Trust Agreement dated January 4, 1995 to the Martha and Bronson Ingram
Foundation, the Ingram Charitable Fund or any of the other beneficiaries
thereof shall be deemed to be transfers to Permitted Transferees.
"Person" means an individual, corporation, partnership, limited
liability company, trust, association or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Split-Off" means the contemplated distribution by Industries of all the
stock of Micro and Ingram Entertainment Inc. to certain stockholders of
Industries effected in accordance with Section 355 of the Internal Revenue
Code of 1986, as amended.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Approving Family Stockholder Notice.... 2.5
Date of Confirmation................... 2.5
Family Directors....................... 2.2
Independent Directors.................. 2.2
Management Director.................... 2.2
Significant Actions.................... 2.5
ARTICLE 2
BOARD COMPOSITION AND CORPORATE GOVERNANCE
SECTION 2.1 Number of Directors; Term; Quorum; Vote. The bylaws of
Micro shall provide for a Board consisting of at least seven and no more than
nine members. The term of each director will be one year, commencing
immediately following the annual meeting of stockholders at which such
director is to be elected and ending at such time after the next annual
meeting of stockholders as his or her successor is elected and qualified or
upon such director's death, or earlier resignation or removal in accordance
with this Agreement or applicable law. Except as otherwise provided herein,
the bylaws of Micro shall provide that the vote of a majority of the entire
Board of directors shall be required for all actions of the Board.
SECTION 2.2 Qualifications of Directors; Subsequent Nominations of
Directors.
(a) Composition and Qualifications of the Board. The Family
Stockholders agree to vote their shares of Micro Common Shares to cause the
Board, from and after the date of this Agreement and until their successors
are duly elected and qualified in accordance with law and the terms of this
Agreement, to consist of the chief executive officer of Micro, four
individuals named by the Family Stockholders and who may be Family
Stockholders, and the individuals who shall be Independent and who shall have
been approved by the Family Stockholders. All subsequent nominations of
persons for election to the Board contained in proxy soliciting material
distributed on behalf of Micro during the term of this Agreement will be
made by the Nominating Committee, and all persons proposed to fill
vacancies on the Board, shall in each case be consistent with the
provisions of Micro's bylaws which shall provide the following
qualifications for directors:
(i) Three individuals who are designated by the Family Stockholders
and who need not be Independent and may be Family Stockholders
(the "Family Directors");
(ii) One individual who is designated by the chief executive officer of
Micro, who need not be Independent and who may be the chief
executive officer of Micro (the "Management Director"); and
(iii) Four (in the case of a board consisting of eight directors) or
five (in the case of a board consisting of nine directors)
individuals, as the case may be from time to time, who shall be
Independent (the "Independent Directors").
(b) Addition of Ninth Director. After the election and
qualification of the eight directors as set forth in this Section 2.2
above, the Board may be expanded to nine directors by the affirmative vote
of a majority of such eight directors. Such ninth director shall have the
qualifications of being nominated by a majority of the Nominating Committee
and shall be Independent. After the initial qualification and election of
such ninth director as set forth in this Section 2.2(b), any vacancy
created by the death, resignation or removal of such director shall be
filled pursuant to Section 2.3 below.
SECTION 2.3 Filling of Vacancies. The bylaws of Micro shall provide
that if, as a result of the death, resignation or removal of a director, a
vacancy is created on the Board, the vacancy shall be filled in the following
manner with individuals with the following qualifications: (a) if the vacancy
resulted from the death, resignation or removal of a Family Director, the
vacancy shall be filled by vote of a majority of the remaining Family
Directors; (b) if the vacancy resulted from the death, resignation or removal
of the Management Director, the vacancy shall be filled by a person qualifying
to be a Management Director as designated by the chief executive officer of
Micro; and (c) if the vacancy resulted from the death, resignation or removal
of an Independent Director, the vacancy shall be filled by a person qualifying
to be an Independent Director nominated by the Nominating Committee and
approved by a majority of the entire Board then in office. The bylaws of Micro
shall provide that if such vacancy on the Board also creates a vacancy on any
committee thereof, the Board will appoint such replacement director elected in
accordance with this Section 2.3 to fill the committee position or positions
held by his or her predecessor.
SECTION 2.4 Committees.
(a) General. The bylaws of Micro shall provide for the designation,
qualification and composition of the Board committees as set forth below and
shall provide that all committees shall act by vote of the majority of the
entire number of directors which constitute the committee.
i. Nominating Committee. The Nominating Committee will consist
of three (3) directors, two of whom will be Family
Directors, and one of whom will be the Management Director.
ii. Executive Committee. The Executive Committee will consist
of three (3) directors, one of whom will be a Family
Director, one of whom will be the Management Director and
one of whom will be an Independent Director.
iii. Compensation Committee. The Compensation Committee will
consist of three (3) directors, one of whom will be a Family
Director, and two of whom will be Independent Directors.
The Compensation Committee shall establish the
compensation of all executive officers of Micro and shall
administer all stock option, purchase and equity
incentive plans.
iv. Audit Committee. The Audit Committee will consist of at
least three (3) directors. At least a majority of the
members of the Audit Committee will be Independent
Directors.
(b) Selection and Removal of Committee Members. The bylaws shall
provide that the Nominating Committee shall name the directors to serve on the
Board committees and shall direct the Nominating Committee to follow the
qualification requirements set forth in Sections 2.2 and 2.4(a). A Committee
member shall be subject to removal from his or her position as a Committee
member by the vote of a majority of the members of the Nominating Committee.
SECTION 2.5 Actions Requiring Consent of Approving Family Stockholders.
(a) Significant Actions. In addition to any vote required by
applicable law, the bylaws shall provide that so long as this Agreement
remains effective, the following actions ("Significant Actions") will not be
taken by or on behalf of Micro without the written approval of Approving
Family Stockholders, acting in their sole discretion, holding at least a
majority of the Approving Voting Power held by all of the Approving Family
Stockholders:
(i) any sale or other disposition or transfer of all or
substantially all of the assets of Micro (considered together with its
subsidiaries);
(ii) any merger, consolidation or share exchange involving Micro,
other than mergers effected for administrative reasons of subsidiaries
owned at least 90% by Micro which under applicable law can be effected
without stockholder approval;
(iii) any issuance (or transfer from treasury) of additional
equity, convertible securities, warrants or options with respect to the
capital stock of Micro, or any of its subsidiaries, or the adoption of
any additional equity plans by or on behalf of Micro or any of its
subsidiaries except for (A) options granted or stock sold in the
ordinary course of business pursuant to plans approved by the Family
Stockholders, and (B) the issuance of Micro Common Shares valued at
Fair Market Value in acquisitions as to which no approval is required
under subsection (iv) of this Section or as to which approval has been
obtained under subsection (iv) of this Section;
(iv) any acquisition by or on behalf of Micro or one of its
subsidiaries involving a total aggregate consideration in excess of 10%
of Micro's stockholders' equity calculated in accordance with generally
accepted accounting principles for the most recent quarter for which
financial information is available (after taking into account the amount
of any indebtedness for borrowed money to be assumed or discharged by
Micro or any of its subsidiaries and any amounts required to be
contributed, invested or borrowed by Micro or any of its subsidiaries if
such contribution, investment or borrowing is reasonably contemplated by
Micro to be necessary within 12 months after the date of the
acquisition);
(v) guaranteeing indebtedness of an entity other than a
subsidiary of Micro exceeding 5% of Micro's stockholders' equity
calculated in accordance with generally accepted accounting principles
for the most recent quarter for which financial information is available;
(vi) incurrence of indebtedness by Micro after the consummation
of the initial public offering of Micro Common Shares (other than
indebtedness incurred after the initial public offering of Micro which
renews or replaces a previously existing facility so long as the
aggregate amount of indebtedness is not increased) in a transaction which
could be reasonably expected to reduce Micro's investment rating lower
than one grade below the ratings of Micro by Moody's Investors Service
("Moody's"), Fitch Investors Service, L.P. ("Fitch") or Standard &
Poor's Rating Group ("Standard & Poor's") immediately following the
initial public offering, but in any event incurrence of indebtedness by
Micro after the consummation of the initial public offering which could
be reasonably expected to reduce such investment rating lower than Baa
by Moody's; BBB- by Fitch; or BBB- by Standard & Poor's; and
(vii) any other transaction having substantially the same effect
as a transaction described in clauses (i) through (vi) of this Section
2.5.
(b) Notices and Information Required To Be Given. Micro shall give
notice to each of the Approving Family Stockholders of any potential, proposed
or contemplated Significant Action, along with all information that Micro
believes in good faith that an Approving Family Stockholder might reasonably
consider to be material in deciding whether or not to approve such Significant
Action (an "Approving Family Stockholder Notice"). An Approving Family
Stockholder Notice will be given by Micro to each of the Approving Family
Stockholders as soon as is practicable under the circumstances, but in no
event later than five (5) days prior to the date on which the Significant
Action is expected to occur. Micro shall be deemed to have given the required
Approving Family Stockholder Notice to each Approving Family Stockholder when
the Family Agent receives such Approving Family Stockholder Notice consistent
with the requirements of Sections 2.5 and 3.3 and a copy of such Approving
Family Stockholder Notice is delivered to Bass, Berry & Sims PLC, Attention:
Leigh Walton, by telecopy to (615) 742-6298 or by physical delivery to 2700
First American Center, Nashville, TN 37238-2700.
(c) Consent Deemed to be Given. The approval of each Significant
Action required to be given by the Approving Family Stockholders consistent
with Section 2.5(a) will be deemed to have been given by the Approving Family
Stockholders if Micro does not receive communications from the Family Agent
withholding such approval within five (5) business days from the Date of
Confirmation. For purposes of this Section 2.5(c) "Date of Confirmation"
means the day Micro confirms the actual receipt of such Approving Family
Stockholder Notice by the Family Agent and Bass, Berry & Sims PLC consistent
with the requirements of Sections 2.5 and 3.3.
(d) Approving Family Stockholder Voting Power. With respect to any
vote pursuant to Section 2.5, and as of any given date, each Approving Family
Stockholder shall be entitled to cast a number of votes equal to (i) the
Outstanding Voting Power of all Micro Common Shares owned of record by such
Approving Family Stockholder, plus (ii) any voting power attributed to such
Approving Family Stockholder under Exhibit A hereto.
SECTION 2.6 Other Corporate Governance Provisions; Liability Insurance.
(a) Governance by Board. Micro will be managed by or under the
direction of its Board. The bylaws of Micro shall provide that each member of
the Board, and all committees of the Board, shall have at all times full
access to the books and records of Micro and all minutes of stockholder, Board
and committee meetings, proceedings and actions and that each member of the
Board shall have the right to add items to any agenda for a meeting of the
Board. The bylaws of Micro shall also provide that during the period of time
between each regularly scheduled meeting of the Board, management decisions
requiring the immediate attention of the Board may be made with the approval
of a majority of the members of the Executive Committee; provided, however,
that the Executive Committee will not have the authority to approve any of the
following items, all of which require the approval of the Board: (i) any
action that would require the approval of the holders of a majority of the
Outstanding Voting Power held by the Family Stockholders under Section 2.5
above or that would require approval of the holders of a majority of the
Micro Common Shares under applicable law or under the certificate of
incorporation or bylaws of Micro (provided, however, that subject to
applicable law, the Board shall be entitled to delegate to the Executive
Committee the authority to negotiate and finalize actions, the general
terms of which have been approved by the Board); (ii) any acquisition with
a total aggregate consideration in excess of 2% of Micro's stockholders'
equity calculated in accordance with generally accepted accounting
principles for the most recent quarter for which financial information is
available (after taking into account the amount of any indebtedness to be
assumed or discharged by Micro or any of its subsidiaries and any amounts
required to be contributed, invested or borrowed by Micro or any of its
subsidiaries); (iii) any action outside of the ordinary course of business
of Micro; or (iv) any other action involving a material shift in policy or
business strategy for the Board.
(b) Directors' Liability Insurance. Unless otherwise agreed by the
written consent of the Family Stockholders, Micro shall maintain, to the
extent commercially available at reasonable rates, for the benefit of the
directors adequate directors' liability insurance to cover the reasonably
anticipated risks associated with their positions. Micro shall enter into
contracts with directors which assure them of indemnification to the full
extent allowable by law both while they serve as directors and thereafter and
the Micro certificate of incorporation will include all applicable provisions
necessary to effect the maximum protection provided by Section 102(b)(7) of
the Delaware General Corporation Law.
SECTION 2.7 Agreement to Vote; Best Efforts.
(a) Generally. Each party to this Agreement agrees (i) to use its
best efforts to take all actions necessary to cause the Family Directors, the
Management Director and the Independent Directors to be elected or appointed
to the Board, (ii) to act in a manner consistent with the intent of this
Agreement in nominating and electing persons to be directors and in filling
any vacancy in the membership of the Board, and (iii) to take such other
necessary or appropriate actions as may be required to give effect to the
provisions of this Agreement.
(b) Amendment of Class A and B Shares. The provisions of the
certificate of incorporation of Micro relating to the Micro Common Shares will
not be altered without the consent of a majority of the Outstanding Voting
Power held by the Family Stockholders.
(c) Amendment of Bylaws. The bylaws of Micro shall provide that,
during the term of this Agreement, (i) the stockholders may alter, amend,
restate or repeal such bylaws or any of them, or make new bylaws, only by the
affirmative vote of the holders of 75 % of the voting power of the then
outstanding Micro Common Shares and (ii) the Board may alter, amend, restate
or repeal such bylaws or any of them, or make new bylaws, only by the
affirmative vote of three-quarters (3/4) of the members of the entire Board.
(d) No Conflicting Provisions of Certificate of Incorporation or
Bylaws. Except as may be required by applicable law, during the term of this
Agreement, the parties hereto agree to use their best efforts to prevent any
provision of Micro's certificate of incorporation or bylaws from containing
any terms inconsistent with the provisions of this Agreement, and from being
amended, modified, supplemented, restated or repealed in a manner inconsistent
with the provisions of this Agreement.
SECTION 2.8 Termination. This Agreement will terminate and be of no
further force or effect on the first date on which the Family Stockholders and
their Permitted Transferees together hold beneficially less than 25,000,000
Micro Common Shares (as such number is equitably adjusted to reflect stock
splits, stock dividends, recapitalizations or other transactions in the
capital stock of Micro).
ARTICLE 3
MISCELLANEOUS
SECTION 3.1 Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
SECTION 3.2 Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof.
SECTION 3.3 Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to another party hereto
shall be in writing (including telecopier or similar writing) and shall be
given to such party at its address set forth on the signature pages hereof, or
to such other address as the party to whom notice is to be given may provide
in a written notice to the party giving such notice, a copy of which written
notice shall be on file with the Secretary of Micro. Except as otherwise
provided herein, each such notice, request or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified on the signature pages hereof and the appropriate
confirmation is received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section 3.3.
SECTION 3.4 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to the conflicts of law rules of such state.
SECTION 3.5 Severability. The invalidity or unenforceability of any
provisions of this Agreement in any jurisdiction shall not affect the
validity, legality or enforceability of the remainder of this Agreement in
such jurisdiction or the validity, legality or enforceability of this
Agreement, including any such provision, in any other jurisdiction, it being
intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.
SECTION 3.6 Successors, Assigns, Transferees. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors and permitted assigns. Notwithstanding
the foregoing, neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by any
party hereto; provided that each Family Stockholder agrees that, in connection
with any transfer by such Family Stockholder of Micro Common Shares after the
Split-Off to a Permitted Transferee (as defined herein), such Family
Stockholder shall assign its rights hereunder with respect to the shares so
transferred to the transferee of such Micro Common Shares. In such event, such
transferee shall execute and deliver to Micro an instrument or instruments
substantially in the form of Exhibit B hereto confirming that the transferee
has agreed to be bound, to the same extent and in the same manner as the
transferor, by the terms of this Agreement, a copy of which instrument shall
be maintained on file with the Secretary of Micro and shall include the
address of such transferee to which notices hereunder shall be sent. Neither
this Agreement nor any provision hereof shall be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement,
those who agree to be bound hereby and their respective successors and
permitted assigns.
SECTION 3.7 Amendments; Waivers.
(a) No failure or delay on the part of any party 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 not exclusive of
any rights or remedies provided by law.
(b) Neither this Agreement nor any term or provision hereof may be
amended or waived except by an instrument in writing signed, in the case of an
amendment, by each of the parties hereto and, in the case of waiver, by the
party against whom the enforcement of such waiver is sought.
SECTION 3.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 3.9 Remedies. The parties hereby acknowledge and agree that in
the event of any breach of this Agreement, the parties would be irreparably
harmed and could not be made whole by monetary damages. Each party hereto
accordingly agrees (i) not to assert by way of defense or otherwise that a
remedy at law would be adequate, and (ii) in addition to any other remedy to
which the parties may be entitled, that the remedy of specific performance of
this Agreement is appropriate in any action in court.
SECTION 3.10 Consent to Jurisdiction. Each party hereto irrevocably
submits to the non-exclusive jurisdiction of any court of the State of
Delaware or any United States Federal Court sitting in the State of Delaware
over any suit, action or proceeding arising out of or relating to this
Agreement. Each party hereto waives any right it may have to assert the
doctrine of forum non conveniens or to object to venue to the extent any
proceeding is brought in accordance with this Section 3.10. Nothing in this
paragraph shall affect or limit any right to serve process in any manner
permitted by law, to bring proceedings in the courts of any jurisdiction or to
enforce in any lawful manner a judgment obtained in one jurisdiction in any
other jurisdiction.
SECTION 3.11 Reliance on Corporate Records of Micro. For purposes of
this Agreement, Micro shall be entitled to determine the identity or existence
of one or more Family Stockholders, Approving Family Stockholders and their
Permitted Transferees by relying on the shareholder and other records of Micro.
SECTION 3.12 Actions by Family Stockholders. Except as otherwise
provided herein, all actions required to be taken hereunder by the Family
Stockholders shall be taken by the holders of a majority of the Outstanding
Voting Power held by the Family Stockholders.
SECTION 3.13 Actions by the Approving Family Stockholders; Family Agent.
(a) All actions required to be taken hereunder by the Approving Family
Stockholders shall be taken by the holders of a majority of the Approving
Voting Power held by the Approving Family Stockholders.
(b) The Approving Family Stockholders agree to appoint a Person to serve
as Family Agent on or before the date of the Split-Off, and to maintain a
Family Agent for the duration of this Agreement. The appointment of a Person
to serve as Family Agent shall become effective upon the receipt by Micro of a
written notice pursuant to Section 3.3 of such appointment by the holders of
a majority of the Approving Voting Power held by the Approving Family
Stockholders. The Family Agent is authorized to report the decisions of the
Approving Family Stockholders, and Micro shall be entitled to rely on a
written statement from the Family Agent as to actions taken by the Approving
Family Stockholders.
(c) A Family Agent shall serve in the agency capacity set forth in this
Agreement until (i) this Agreement terminates pursuant to Section 2.8 or (ii)
Micro receives notice from the holders of a majority of the Approving Voting
Power held by the Approving Family Stockholders that another Person has been
appointed as the Family Agent.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
INGRAM MICRO INC.
By: /s/ Jeffrey R. Rodek
---------------------------------
Name: Jeffrey R. Rodek
Title: President
1600 East Saint Andrew Place
Santa Ana, California 92705
Telecopy: 714-566-7900
/s/ Martha R. Ingram
---------------------------------------
Martha R. Ingram
120 Hillwood Drive
Nashville, TN 37215
/s/ Orrin H. Ingram, II
---------------------------------------
Orrin H. Ingram, II
1475 Moran Road
Franklin, TN 37069
/s/ John R. Ingram
---------------------------------------
John R. Ingram
311 Jackson Boulevard
Nashville, TN 37205
/s/ David B. Ingram
---------------------------------------
David B. Ingram
4417 Tyne Boulevard
Nashville, TN 37215
/s/ Robin B. Ingram Patton
---------------------------------------
Robin B. Ingram Patton
1600 Chickering Road
Nashville, TN 37215
QTIP MARITAL TRUST CREATED UNDER
THE E. BRONSON INGRAM REVOCABLE
TRUST AGREEMENT DATED JANUARY 4, 1995
By: MARTHA R. INGRAM, ORRIN H.
INGRAM, JOHN R. INGRAM,
DAVID B. INGRAM AND ROBIN B. INGRAM
PATTON, as Co-Trustees
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
By: /s/ Orrin H. Ingram
----------------------------------
Name: Orrin H. Ingram
Title: Co-Trustee
Address: 1475 Moran Road
Franklin, TN 37069
By: /s/ John R. Ingram
----------------------------------
Name: John R. Ingram
Title: Co-Trustee
Address: 311 Jackson Boulevard
Nashville, TN 37205
By: /s/ David B. Ingram
----------------------------------
Name: David B. Ingram
Title: Co-Trustee
Address: 4417 Tyne Boulevard
Nashville, TN 37215
By: /s/ Robin B. Ingram Patton
----------------------------------
Name: Robin B. Ingram Patton
Title: Co-Trustee
Address: 1600 Chickering Road
Nashville, TN 37215
E. BRONSON INGRAM 1995 CHARITABLE
REMAINDER 5% UNITRUST
By: MARTHA R. INGRAM, as Trustee
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
MARTHA AND BRONSON INGRAM
FOUNDATION
By: ORRIN H. INGRAM, JOHN R. INGRAM,
DAVID B. INGRAM, AND ROBIN BIGELOW
INGRAM PATTON, as Co-Trustees
By: /s/ Orrin H. Ingram
----------------------------------
Name: Orrin H. Ingram
Title: Co-Trustee
Address: 1475 Moran Road
Franklin, TN 37069
By: /s/ John R. Ingram
----------------------------------
Name: John R. Ingram
Title: Co-Trustee
Address: 311 Jackson Boulevard
Nashville, TN 37205
By: /s/ David B. Ingram
----------------------------------
Name: David B. Ingram
Title: Co-Trustee
Address: 4417 Tyne Boulevard
Nashville, TN 37215
By: /s/ Robin Bigelow Ingram Patton
----------------------------------
Name: Robin Bigelow Ingram Patton
Title: Co-Trustee
Address: 1600 Chickering Road
Nashville, TN 37215
E. BRONSON INGRAM 1994
CHARITABLE LEAD ANNUITY TRUST
By: ORRIN H. INGRAM, JOHN R. INGRAM,
DAVID B. INGRAM, AND ROBIN B.
INGRAM PATTON, as Co-Trustees
By: /s/ Orrin H. Ingram
----------------------------------
Name: Orrin H. Ingram
Title: Co-Trustee
Address: 1475 Moran Road
Franklin, TN 37069
By: /s/ John R. Ingram
----------------------------------
Name: John R. Ingram
Title: Co-Trustee
Address: 311 Jackson Boulevard
Nashville, TN 37205
By: /s/ David B. Ingram
----------------------------------
Name: David B. Ingram
Title: Co-Trustee
Address: 4417 Tyne Boulevard
Nashville, TN 37215
By: /s/ Robin B. Ingram Patton
----------------------------------
Name: Robin B. Ingram Patton
Title: Co-Trustee
Address: 1600 Chickering Road
Nashville, TN 37215
TRUST FOR ORRIN HENRY INGRAM, II,
UNDER AGREEMENT WITH E. BRONSON
INGRAM DATED OCTOBER 27, 1967
By: SUNTRUST BANK, ATLANTA,
MARTHA R. INGRAM AND FREDERIC
B. INGRAM, AS CO-TRUSTEES
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
By: /s/ Frederic B. Ingram
----------------------------------
Name: Frederic B. Ingram
Title: Co-Trustee
Address: 813 Greenway Dr.
Beverly Hills, CA 90210
TRUST FOR ORRIN HENRY INGRAM, II, UNDER
AGREEMENT WITH E. BRONSON INGRAM DATED
JUNE 14, 1968
By: SUNTRUST BANK, ATLANTA, AND
MARTHA R. INGRAM, AS CO-TRUSTEES
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
TRUST FOR ORRIN HENRY INGRAM, II, UNDER
AGREEMENT WITH HORTENSE B. INGRAM DATED
DECEMBER 22, 1975
By: SUNTRUST BANK, ATLANTA,
Trustee
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
THE ORRIN H. INGRAM IRREVOCABLE TRUST
DATED JULY 9, 1992
By: ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
----------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
TRUST FOR THE BENEFIT OF ORRIN H. INGRAM
ESTABLISHED BY MARTHA R. RIVERS UNDER
AGREEMENT OF TRUST ORIGINALLY
DATED APRIL 30, 1982, AS AMENDED
By: ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
----------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
TRUST FOR JOHN RIVERS INGRAM, UNDER
AGREEMENT WITH E. BRONSON INGRAM DATED
OCTOBER 27, 1967
By: SUNTRUST BANK, ATLANTA, MARTHA R.
INGRAM AND FREDERIC B. INGRAM, AS
CO-TRUSTEES
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
By: /s/ Frederic B. Ingram
----------------------------------
Name: Frederic B. Ingram
Title: Co-Trustee
Address: 813 Greenway Dr.
Beverly Hills, CA 90210
TRUST FOR JOHN RIVERS INGRAM, UNDER
AGREEMENT WITH E. BRONSON INGRAM DATED
JUNE 14, 1968
By: SUNTRUST BANK, ATLANTA AND MARTHA R.
INGRAM, AS CO-TRUSTEES
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
TRUST FOR JOHN RIVERS INGRAM, UNDER
AGREEMENT WITH HORTENSE B. INGRAM DATED
DECEMBER 22, 1975
By: SUNTRUST BANK, ATLANTA, Trustee
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
THE JOHN R. INGRAM IRREVOCABLE TRUST DATED
JULY 9, 1992
By: ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
----------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
TRUST FOR THE BENEFIT OF JOHN R. INGRAM
ESTABLISHED BY MARTHA R. RIVERS UNDER
AGREEMENT OF TRUST ORIGINALLY DATED APRIL
30, 1982, AS AMENDED
By: ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
----------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
THE JOHN AND STEPHANIE INGRAM FAMILY 1996
GENERATION SKIPPING TRUST
By: WILLIAM S. JONES, as Trustee
By: /s/ William S. Jones
----------------------------------
Name: William S. Jones
Title: Trustee
Address:
TRUST FOR DAVID B. INGRAM, UNDER AGREEMENT
WITH E. BRONSON INGRAM DATED OCTOBER 27,
1967
By: SUNTRUST BANK, ATLANTA, MARTHA R.
INGRAM AND FREDERIC B. INGRAM, AS
CO-TRUSTEES
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
By: /s/ Frederic B. Ingram
----------------------------------
Name: Frederic B. Ingram
Title: Co-Trustee
Address: 813 Greenway Dr.
Beverly Hills, CA 90210
TRUST FOR DAVID B. INGRAM, UNDER AGREEMENT
WITH E. BRONSON INGRAM DATED JUNE 14, 1968
By: SUNTRUST BANK, ATLANTA AND MARTHA R.
INGRAM, AS CO-TRUSTEES
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
TRUST FOR DAVID B. INGRAM, UNDER AGREEMENT
WITH HORTENSE B. INGRAM DATED DECEMBER
22, 1975
By: SUNTRUST BANK, ATLANTA, Trustee
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
THE DAVID B. INGRAM IRREVOCABLE
TRUST DATED JULY 9, 1992
By: ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
----------------------------------
Name: ROY E. CLAVERIE
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
TRUST FOR THE BENEFIT OF DAVID B. INGRAM
ESTABLISHED BY MARTHA R. RIVERS UNDER
AGREEMENT OF TRUST ORIGINALLY DATED APRIL
30, 1982, AS AMENDED
By: ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
----------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
DAVID AND SARAH INGRAM FAMILY 1996
GENERATION SKIPPING TRUST
By: THOMAS H. LUNN, AS TRUSTEE
By: /s/ Thomas H. Lunn
-----------------------------------
Name: Thomas H. Lunn
Title: Trustee
Address: 509 Sugartree Lane
Franklin, TN 37064
TRUST FOR ROBIN BIGELOW INGRAM, UNDER
AGREEMENT WITH E. BRONSON INGRAM DATED
OCTOBER 27, 1967
By: SUNTRUST BANK, ATLANTA MARTHA R.
INGRAM AND FREDERIC B. INGRAM, AS
CO-TRUSTEES
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
By: /s/ Frederic B. Ingram
----------------------------------
Name: Frederic B. Ingram
Title: Co-Trustee
Address: 813 Greenway Drive
Beverly Hills CA 90210
TRUST FOR ROBIN BIGELOW INGRAM, UNDER
AGREEMENT WITH E. BRONSON INGRAM DATED
JUNE 14, 1968
By: SUNTRUST BANK, ATLANTA AND MARTHA R.
INGRAM, AS CO-TRUSTEES
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
By: /s/ Martha R. Ingram
----------------------------------
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
By: /s/ Frederic B. Ingram
----------------------------------
Name: Frederic B. Ingram
Title: Co-Trustee
Address: 813 Greenway Drive
Beverly Hills CA 90210
TRUST FOR ROBIN BIGELOW INGRAM, UNDER
AGREEMENT WITH HORTENSE B. INGRAM DATED
DECEMBER 22, 1975
By: SUNTRUST BANK, ATLANTA, Trustee
By: /s/ M. Steven Carroll
----------------------------------
Name: M. Steven Carroll
Title: Group Vice President
Address: SunTrust Bank, Atlanta
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
THE ROBIN INGRAM PATTON IRREVOCABLE
TRUST DATED JULY 9, 1992
By: ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
----------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
TRUST FOR THE BENEFIT OF ROBIN B. INGRAM
ESTABLISHED BY MARTHA R. RIVERS UNDER
AGREEMENT OF TRUST ORIGINALLY DATED APRIL
30, 1982, AS AMENDED
By: ROY E. CLAVERIE, as Trustee
By: /s/ Roy E. Claverie
----------------------------------
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
EXHIBIT A
Attribution of Approving Voting Power
1. With respect to any vote pursuant to Section 2.5, and as of any
given date, Martha R. Ingram shall be attributed and entitled to cast a
number of votes equal to the Outstanding Voting Power of all Micro Common
Shares owned by Trust for John Rivers Ingram, under an Agreement with E.
Bronson Ingram dated June 14, 1968, plus the Outstanding Voting Power of
all Micro Common Shares owned by the Trust for David B. Ingram, under an
Agreement with E. Bronson Ingram dated October 27, 1967, plus the
Outstanding Voting Power of all Micro Common Shares owned by the Trust for the
Benefit of David Bronson Ingram, dated June 14, 1968, plus the Outstanding
Voting Power of all Micro Common Shares owned by the Trust for Robin Bigelow
Ingram, under an Agreement with E. Bronson Ingram dated June 14, 1968.
2. With respect to any vote pursuant to Section 2.5, and as of any
given date, Orrin H. Ingram, II shall be attributed and entitled to cast a
number of votes equal to twenty-five percent (25%) of the Outstanding Voting
Power of all Micro Common Shares owned by E. Bronson Ingram 1994 Charitable
Lead Annuity Trust.
3. With respect to any vote pursuant to Section 2.5, and as of any
given date, John R. Ingram shall be attributed and entitled to cast a number
of votes equal to twenty-five percent (25%) of the Outstanding Voting Power of
all Micro Common Shares owned by E. Bronson Ingram 1994 Charitable Lead
Annuity Trust.
4. With respect to any vote pursuant to Section 2.5, and as of any
given date, David B. Ingram shall be attributed and entitled to cast a number
of votes equal to twenty-five percent (25%) of the Outstanding Voting Power of
all Micro Common Shares owned by E. Bronson Ingram 1994 Charitable Lead
Annuity Trust.
5. With respect to any vote pursuant to Section 2.5, and as of any
given date, Robin B. Ingram Patton shall be attributed and entitled to cast a
number of votes equal to twenty-five percent (25%) of the Outstanding Voting
Power of all Micro Common Shares owned by E. Bronson Ingram 1994 Charitable
Lead Annuity Trust.
EXHIBIT B
FORM OF AGREEMENT TO BE BOUND
[DATE]
To the Parties to the Board Representation Agreement
Dated as of _______, ____
Ladies and Gentlemen:
Reference is made to the Board Representation Agreement (the
"Agreement") dated as of __________ among Ingram Micro Inc. and the Persons
listed on the signature pages thereof.
In consideration of the transfer to the undersigned of Micro Common
Shares (as defined in the Agreement), the undersigned hereby confirms and
agrees to be bound by all of the provisions of the Agreement applicable to the
transferor.
This letter shall be construed and enforced in accordance with the laws
of the State of Delaware without regard to the conflicts of law rules of such
state.
Very truly yours,
Permitted Transferee
EXHIBIT 10.16
THRIFT PLAN LIQUIDITY AGREEMENT
THRIFT PLAN LIQUIDITY AGREEMENT dated as of November 6, 1996
between Ingram Micro Inc., a Delaware corporation ("MICRO"), and the Ingram
Thrift Plan (together with its successors and permitted assigns, the "THRIFT
PLAN").
In consideration of the mutual promises set forth below (the
mutuality, adequacy and sufficiency of which are hereby acknowledged), the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. DEFINITIONS. The following terms, as used herein, have
the following meanings:
"BENEFITS TRANSFER AGREEMENT" means the Employee Benefits Transfer
and Assumption Agreement of even date herewith among Micro, Ingram Industries
Inc. and Ingram Entertainment Inc.
"COMMISSION" means the Securities and Exchange Commission.
"ELIGIBLE REPURCHASE PERIOD" means the period commencing on the
effective date of the initial Public Offering and ending on the effective date
of any registration statement filed pursuant to Section 2.1(b); provided that
the "Eligible Repurchase Period" shall not include any period (i) commencing on
the date of delivery of a written notice by Micro pursuant to Section 2.1(a),
2.1(b) or 2.1(c) and (ii) ending on the day following the earliest to occur of
(a) the last day of effectiveness of the registration statement in respect of
which such notice was delivered, (b) the day after the date on which such
registration statement is withdrawn pursuant to Section 2.3 or (c) the 90th day
after the date of such written notice,
if such registration statement shall not have been declared effective by such
time.
"FAIR MARKET VALUE" means, with respect to one share of Micro Common
Stock as of any date, the reported closing price on such date of a share of
Micro Common Stock on such exchange or market as is the principal trading market
for the Micro Common Stock (regardless of whether such listed or traded share of
Micro Common Stock is of the same class as the share of Micro Common Stock in
respect of which the determination of Fair Market Value is being made).
"LIQUIDITY EVENT" means any event that requires that shares of Micro
Common Stock held by the Thrift Plan be sold in order to fund a distribution to
a participant required pursuant to the terms of the Thrift Plan consistent with
past practice.
"MICRO COMMON STOCK" means the common stock of Micro, including
without limitation the Class A common stock and the Class B common stock, par
value $0.01 per share, of Micro.
"PUBLIC OFFERING" means a public offering of Micro Common Stock
pursuant to an effective registration statement under the Securities Act, other
than pursuant to a registration statement on Form S-4 or Form S-8 or any
successor or similar form.
"REGISTRABLE SECURITIES" means, as of any date, (i) shares of Micro
Common Stock held by the Thrift Plan that the trustees of the Thrift Plan
determine, in their good faith opinion, should be sold as of such date in order
to comply with the provisions of Section 404(a) of The Employee Retirement
Income Security Act of 1974, as amended and (ii) shares of Micro Common Stock in
respect of which a Liquidity Event has occurred as of such date. Registrable
Securities shall cease to be Registrable Securities when (x) a registration
statement with respect to the disposition of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of pursuant to such effective registration statement, (y) such securities shall
have been sold under circumstances in which all of the applicable conditions of
Rule 144 under the Securities Act are met or (z) such securities may be sold
pursuant to Rule 144(k) under the Securities Act or otherwise in the public
market without being registered under the Securities Act.
"REGISTRATION EXPENSES" means all (i) registration and filing fees,
(ii) fees and expenses of compliance with
2
securities or blue sky laws and the reasonable fees and disbursements of counsel
in connection with blue sky qualifications of the Registrable Securities, (iii)
printing expenses, (iv) internal expenses of Micro (including, without
limitation, all salaries and expenses of officers and employees performing legal
or accounting duties), (v) fees and disbursements of counsel for Micro, (vi)
customary fees and expenses for independent certified public accountants
retained by Micro (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public accountants of a
comfort letter or comfort letters), (vii) fees and expenses of any special
experts retained by Micro in connection with such registration and (viii) fees
and expenses of listing the Registrable Securities to be registered pursuant to
this Agreement on a securities exchange.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
ARTICLE 2
REGISTRATION PROVISIONS; SHARE REPURCHASES
SECTION 2.1. SECURITIES ACT REGISTRATION. (a) Micro may elect, by
delivery of written notice to the Thrift Plan, to effect the registration, as
soon as practicable following the initial Public Offering, of Registrable
Securities on Form S-1 under the Securities Act; provided that if such
registration shall not have been effected within 90 days following such initial
Public Offering, Micro shall be obligated to repurchase such Registrable
Securities on the terms and conditions set forth in Section 2.4(a). The Thrift
Plan shall deliver written notice to Micro, within ten days after receipt by the
Thrift Plan of such written notice from Micro, of the number of Registrable
Securities to be included in such registration. Whether to make any election to
effect the registration of such Registrable Securities shall be in the sole and
absolute discretion of Micro.
(b) Micro may elect, by delivery of written notice to the Thrift
Plan, to effect the registration, as soon as practicable following the first
anniversary of the effective date of the initial Public Offering, of the
Registrable Securities on Form S-3 under the Securities Act; provided that if
such registration shall not have been effected within 90 days following such
anniversary, Micro
3
shall be obligated to repurchase such Registrable Securities on the terms and
conditions set forth in Section 2.4(a). The Thrift Plan shall deliver written
notice to Micro, within ten days after receipt by the Thrift Plan of such
written notice from Micro, of the number of Registrable Securities to be
included in such registration. Whether to make any election to effect the
registration of such Registrable Securities shall be in the sole and absolute
discretion of Micro.
(c) Micro shall deliver written notice to the Thrift Plan in the
event that Micro is required to use its best efforts to effect a registration
pursuant to Section 7.01(b) of the Stock Option, SAR and ISU Conversion and
Exchange Agreement dated as of September 4, 1996 among Micro and the other
parties thereto. The Thrift Plan shall then deliver written notice to Micro,
within ten days after receipt by the Thrift Plan of such written notice from
Micro, of the number of Registrable Securities to be included in any such
registration, and Micro shall use its best efforts to include such Registrable
Securities in such registration.
SECTION 2.2. EFFECTIVENESS OF REGISTRATIONS. (a) Micro shall use its
best efforts to cause any registration pursuant to Section 2.1(a) to remain
effective (and not be subject to any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason) for a period of not less than 30 days following the date on which such
registration was declared effective, or, if earlier, the date on which all
Registrable Securities registered thereunder have been sold.
(b) Subject to Section 2.3(b), Micro shall use its best efforts to
cause any registration pursuant to Section 2.1(b) to remain effective (and not
be subject to any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court for any reason) for the period
beginning on the date on which such registration was declared effective and
ending on the date on which all Registrable Securities registered thereunder
have been sold or, if earlier, the date on which no Registrable Securities
remain outstanding.
SECTION 2.3. EXPENSES; MICRO DISCRETION. (a) Micro shall pay all
Registration Expenses in connection with any registration effected pursuant to
the terms of this Agreement.
4
(b) With respect to any registration statement filed or to be filed
pursuant to this Agreement, if the Board of Directors of Micro shall determine,
in its good faith judgment, that to maintain the effectiveness of such
registration statement or to permit such registration statement to become
effective (or, if no registration statement has yet been filed, to file such a
registration statement) would be significantly disadvantageous to Micro, Micro
may cause such registration statement to be withdrawn and the effectiveness of
such registration statement to be temporarily suspended or, if no registration
statement has yet been filed, delay the filing of such registration statement.
Micro shall not be liable for the failure of any such registration statement to
become effective provided that Micro complies with its obligations under this
Agreement; provided that, if any registration effected pursuant to Section
2.1(a) or 2.1(b) is so withdrawn or delayed for a period of more than 120
consecutive days, Micro shall be obligated to repurchase the Registrable
Securities to have been included in such registration on the terms and
conditions set forth in Section 2.4(a).
SECTION 2.4 SHARE REPURCHASES. (a) Subject to Section 2.4(d), if a
registration of Registrable Securities shall not have been effected during the
applicable time period specified in Section 2.1(a) or 2.1(b), or if required
pursuant to Section 2.3(b), the Thrift Plan may elect, by written notice
delivered to Micro within 90 days following the expiration of the time period
specified in Section 2.1(a) or Section 2.1(b), respectively, or the expiration
of the 120-day period referred to in Section 2.3(b), to sell to Micro the
Registrable Securities otherwise to have been included in such registration at a
purchase price, payable in cash, equal to the Fair Market Value of such
Registrable Securities as of the date such purchase is effected pursuant to
Section 2.4(c) and otherwise in the manner set forth herein.
(b) Subject to Section 2.4(d), at any time during the Eligible
Repurchase Period, the Thrift Plan may elect, by written notice delivered to
Micro, to sell to Micro, and Micro shall be required to purchase from the Thrift
Plan, the shares of Micro Common Stock with respect to which a Liquidity Event
has occurred, at a purchase price, payable in cash, equal to the Fair Market
Value of such shares as of the date such purchase is effected pursuant to
Section 2.3(c) and otherwise in the manner set forth herein; provided that Micro
shall not be obligated to make a repurchase pursuant to this Section 2.4(b) on
more than one occasion during any calendar month.
5
(c) The closing of any repurchase made pursuant to this Section 2.4
shall be effected in one lump sum and, subject to Section 2.4(b), shall be
consummated as promptly as practicable following receipt of the written notice
from the Thrift Plan referred to in Section 2.4(a) or 2.4(b) upon at least five
days' prior notice by Micro of the date, time and place of the closing of such
repurchase.
(d) Notwithstanding anything herein to the contrary, (i) Micro shall
not be obligated to make any such purchase if Micro determines in good faith
that such purchase would adversely affect the qualification of the transactions
contemplated by the Exchange Agreement or Reorganization Agreement (as defined
in the Benefits Transfer Agreement) for tax-free treatment under Section 355 of
the Internal Revenue Code, as amended, or if such purchase would be prohibited
by the terms of any credit facility or financing agreement of Micro then in
effect, and (ii) Micro shall not be obligated to repurchase pursuant to Section
2.4(a), during any fiscal year, Registrable Securities of the type described in
clause (i) of the definition of "Registrable Securities" having an aggregate
purchase price in excess of the greater of $10 million or 3% of the stockholders
equity of Micro as of the beginning of such fiscal year (it being understood
that shares of Micro Common Stock shall be repurchased on a first-come,
first-served basis until the limit for such fiscal year has been reached).
(e) Micro hereby agrees to use commercially reasonable efforts to
negotiate the terms of each credit facility and financing agreement of Micro so
as to minimize any restrictions on the ability of Micro to make repurchases
hereunder.
ARTICLE 3
MISCELLANEOUS
SECTION 3.1. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
SECTION 3.2. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof.
6
SECTION 3.3. NOTICES. Any notice, request, instruction or other
document to be given hereunder by either party hereto to the other party hereto
shall be in writing (including telecopier or similar writing) and shall be given
to such party at its address set forth on the signature pages hereof, or to such
other address as the party to whom notice is to be given may provide in a
written notice to the party giving such notice. If notice is given pursuant to
this Section of a successor or permitted assign of a party to this Agreement,
then notice shall thereafter be given as set forth above to such successor or
assign. Each such notice, request or other communication shall be effective (i)
if given by telecopy, when such telecopy is transmitted to the telecopy number
specified on the signature pages hereof and electronic or oral confirmation of
receipt is received, (ii) if given by mail, at the close of business on the
third business day after such communication is deposited in the mails with first
class postage prepaid addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section 3.3.
SECTION 3.4. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the conflicts of law rules of such state.
SECTION 3.5. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
SECTION 3.6. SUCCESSORS, ASSIGNS. Neither this Agreement nor any
right, remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by Micro or by the Thrift Plan; provided that the Thrift
Plan may assign its rights hereunder to the Micro Thrift Plan or the
Entertainment Thrift Plan (each as defined in the Benefits Transfer Agreement)
in connection with any transfer of Micro Common Stock to the Micro Thrift Plan
or Entertainment Thrift Plan, respectively, pursuant to Section 3.1 of the
Benefits Transfer Agreement; provided that each such assignee shall have
executed and delivered to Micro an instrument in form and substance satisfactory
to Micro pursuant to which such assignee shall have agreed to be bound by the
terms of this Agreement. This Agreement is
7
binding upon the parties to this Agreement and their respective successors and
permitted assigns and inures to the benefit of the parties to this Agreement and
their respective successors and assigns. Neither this Agreement nor any
provision hereof shall be construed so as to confer any right or benefit upon
any entity other than the parties to this Agreement, those who agree to be bound
hereby and their respective successors and assigns. References to a party to
this Agreement are also references to any successor or permitted assign of such
party and, when appropriate to effect the binding nature of this Agreement for
the benefit of another party, any other successor or assign of a party.
SECTION 3.7. AMENDMENTS; WAIVERS. (a) No failure or delay on the
part of either party 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.
(b) Neither this Agreement nor any term or provision hereof may be
amended or waived except by an instrument in writing signed by the parties
hereto.
SECTION 3.8. COUNTERPARTS. This Agreement may be executed in two
counterparts, both of which shall be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 3.9. REMEDIES. The parties hereby acknowledge and agree that
in the event of any breach of this Agreement, the parties would be irreparably
harmed and could not be made whole by monetary damages. Each party hereto
accordingly agrees (i) not to assert by way of defense or otherwise that a
remedy at law would be adequate, and (ii) in addition to any other remedy to
which the parties may be entitled, that the remedy of specific performance of
this Agreement is appropriate in any action in court. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 3.10. EFFECTIVENESS. This Agreement shall become effective
commencing on the effective date of the initial Public Offering.
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
INGRAM MICRO INC.
By: /s/ Jeffrey R. Rodek
---------------------------------
Name: Jeffrey R. Rodek
Title: President
1600 Saint Andrew Place
Santa Ana, CA 92705
Telecopy: (714) 566-7900
INGRAM THRIFT PLAN
By W.M. HEAD, R.E. CLAVERIE
AND T.H. LUNN,
as Co-Trustees
By: /s/ William M. Head
---------------------------------
Name: William M. Head
Title: Co-Trustee
Address: 1229 Nichol Lane
Nashville, TN 37205
By: /s/ R.E. Claverie
---------------------------------
Name: R.E. Claverie
Title: Co-Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
By: /s/ T.H. Lunn
---------------------------------
Name: T.H. Lunn
Title: Co-Trustee
Address: 509 Sugartree Lane
Franklin, TN 37064
9
EXHIBIT 10.17
Tax Sharing and Tax Services
Agreement
This Agreement is entered into the 6th day of November, 1996,
by and among Ingram Industries Inc. ("Industries"), Ingram Entertainment
Inc. ("Entertainment") and Ingram Micro Inc. ("Micro") (Entertainment
and Micro are sometimes hereinafter referred to collectively as the
"Subsidiaries" and individually as a "Subsidiary").
WHEREAS, Industries is the common parent corporation of an
affiliated group of corporations (the "Affiliated Group") within the
meaning of section 1504(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), which files consolidated federal income tax returns
("Consolidated Federal Returns");
WHEREAS, the Subsidiaries are currently wholly-owned subsidiaries of
Industries and members of the Affiliated Group;
WHEREAS, Industries files consolidated, combined or unitary state
income tax returns (collectively, "Consolidated State Returns") in certain
states for groups of corporations which include the Subsidiaries;
WHEREAS, Industries is distributing all of its stock in each of the
Subsidiaries to certain of the shareholders of Industries in split-off
transactions (each, a "Split-off" and together, the "Split-offs");
WHEREAS, the parties hereto desire to set forth their agreement
concerning the manner in which various matters relating to federal state
and foreign taxes based upon income (collectively, "Income Taxes") will be
handled after the dates of the Split-offs;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties agree as follows:
1. Termination of Other Income Tax Sharing Agreements. Any existing
Income Tax sharing agreements or arrangements, whether written or
unwritten, between Industries and a Subsidiary shall terminate on the date
of the Split-off of such Subsidiary, (the "Subsidiary's Split-off Date"),
and this Agreement shall thereafter constitute the sole Income Tax sharing
agreement between Industries and such Subsidiary.
2. Filing of Income Tax Returns and Payment of Tax Liability.
(a) Federal Income Tax Returns.
(i) Return for Affiliated Group. Industries will prepare and file
the Consolidated Federal Return for the Affiliated Group for the taxable year
which includes a Subsidiary's Split-off Date.
(ii) Separate Federal Income Tax Returns. Industries shall prepare
on behalf of each Subsidiary, in consideration of a fee to be negotiated by
the parties, a separate federal income tax return for the short taxable year
of such Subsidiary which begins immediately after such Subsidiary's Split-off
Date.
(b) State Income Tax Returns.
(i) Consolidated State Income Tax Returns. Industries shall
prepare and file state income tax returns for the taxable year which includes
a Subsidiary's Split-off Date for those states in which Consolidated State
Returns are filed.
(ii) Separate State Income Tax Returns. With respect to those
states in which a Subsidiary files a separate income tax return, Industries
shall prepare on behalf of such Subsidiary, in consideration of a fee to be
negotiated by the parties, an income tax return for the taxable year of the
Subsidiary which includes such Subsidiary's Split-off Date. With respect to
those states in which Consolidated State Returns are filed in accordance with
Section 2(b)(i) above, Industries shall prepare on behalf of each Subsidiary,
in consideration of a fee to be negotiated by the parties, a separate income
tax return for the short taxable year of the Subsidiary which begins
immediately after such Subsidiary's Split-off Date.
(c) In preparing the Consolidated Federal Return and any Consolidated
State Returns for the taxable period which includes a Subsidiary's Split-off
Date, the items attributable to such Subsidiary for the portion of such
taxable period ending on the Subsidiary's Split-off Date shall be determined
by closing the books of the Subsidiary as of the Subsidiary's Split-off Date.
All such returns shall be prepared using the same procedures and on the same
basis as returns for prior periods, except as the parties hereto may otherwise
agree.
(d) Payment of Tax.
(i) Consolidated Federal and State Returns. Within thirty (30)
days after the Consolidated Federal Return and each Consolidated State
Return for the taxable year which includes a Subsidiary's Split-off Date is
filed, Industries shall notify such Subsidiary of the amount of the tax
liability reflected on such return which is allocable to such Subsidiary.
Such Subsidiary shall pay to Industries, within ten (10) days after the
date of such notice, the excess of the amount of tax liability reflected on
such tax return which is allocable to the Subsidiary over the amount
previously paid by such Subsidiary to Industries with respect to the
Subsidiary's tax liability for such taxable year, together with interest,
at the intercompany rate of interest determined by Industries' Treasury
Department (the "Inter-Company Rate") for such period, on such excess
amount for the period from the date the tax return is filed until the date
of payment by the Subsidiary. In the event that the amount of tax
liability reflected on such tax return which is allocable to the Subsidiary
is less than the amount previously paid by such Subsidiary to Industries
with respect to the Subsidiary's tax liability for such taxable year,
Industries shall pay such Subsidiary the difference, together with interest
at the Inter-Company Rate on such amount for the period from the date the
tax return is filed until the date of payment to the Subsidiary; provided,
however, that interest shall only be paid to the extent such Subsidiary's
overpayment was used to fund an underpayment by Industries or another
Subsidiary or interest on such overpayment was actually received from the
relevant taxing authority. Industries shall allocate the tax liability
reflected on the Consolidated Federal Return and each Consolidated State
Return in accordance with the method prescribed in Treas. Reg. Section
1.1552-1(a)(3).
(ii) Separate Federal and State Returns. Each Subsidiary
shall be responsible for the payment of any Income Tax liability reflected
on the Separate Income Tax returns prepared by Industries on behalf of such
Subsidiary pursuant to Sections 2(a)(ii) and 2(b)(ii) of this Agreement.
3. Subsequent Adjustments.
(a) In the event that adjustments are made to a Consolidated Federal
Return, a Consolidated State Return or a foreign or separate state Income
Tax return of Industries or a Subsidiary for any taxable year or portion
thereof ending on or before the date of the Split-off of Micro (the "Micro
Split-off Date"), whether by reason of an audit, amended return or
otherwise, and such adjustments result in an increase in the Income Tax
liability for such taxable period, the responsibility for the payment of
such increase in Income Tax liability and any interest, penalties, or
additions to tax imposed with respect to such increase (collectively, a
"Deficiency") shall, except as provided Section 3(c) and Section 4(b)
below, be determined in the following manner:
(i) The amount of a Deficiency shall first be offset against and
reduce the amount reflected in the reserve for taxes recorded on the books of
Industries as of the Micro Split-off Date (the "Reserve"). Industries shall be
responsible for payment of the amount of such Deficiency which is offset
against the Reserve in accordance with this Section 3(a)(i).
(ii) To the extent that the amount of a Deficiency exceeds the
balance in the Reserve (after giving effect to any prior reduction in the
Reserve made pursuant to this Agreement), the parties hereto shall be
responsible for the payment of the amount of such excess in the following
proportions:
Industries 23.01 percent
Micro 72.84 percent
Entertainment 4.15 percent;
(iii) Provided, however, that in the event that a Deficiency
involves a timing issue and results in a decrease in income or an increase
in a deduction, credit or other tax attribute (an "Offsetting Adjustment")
for a taxable period or portion thereof beginning after the Micro Split-off
Date, the amount of the Deficiency to be taken into account for purposes of
applying Sections 3(a)(i) and 3(a)(ii) above shall be reduced by the
present value (using a discount rate equal to 10 percent) of the tax
benefit (based on the applicable maximum corporate tax rate in effect on
the date of such adjustment) which will result from the Offsetting
Adjustment and the Subsidiary benefiting from such Offsetting Adjustment
shall pay 100 percent of the foregoing reduction in the Deficiency.
(b) In the event that a Deficiency is imposed with respect to a
Consolidated Federal Return or Consolidated State Return, or a foreign or a
separate state Income Tax Return of Entertainment, and any portion of such
Deficiency is attributable to items of Entertainment for the period beginning
immediately after the Micro Split-off Date and ending on the date of the
Split-off of Entertainment (the "Interim Period"), such portion of the
Deficiency (the "Interim Period Deficiency") shall first be offset against and
reduce the amount reflected in the reserve for taxes recorded on the books of
Industries for the Interim Period (the "Interim Period Reserve"), which shall
be established using the same procedures and on the same basis as in prior
periods. Industries shall be responsible for payment of the amount of any
Interim Period Deficiency which is offset against the Interim Reserve pursuant
to this Section 3(b). To the extent that the Interim Period Deficiency exceeds
the balance in the Interim Period Reserve (after giving effect to any prior
reduction in the Interim Period Reserve made under this Agreement),
Entertainment shall be solely responsible for the payment of the amount of
such excess.
(c) Notwithstanding the provisions of Section 3(a) or 3(b), (i) if
either the Split-off of Micro or the Split-off of Entertainment fails to
qualify for tax-free treatment under Section 355 of the Code as the result
of the breach by one of Industries, Micro or Entertainment of a
representation or covenant contained in Section 6.2 or Section 6.3 of the
Amended and Restated Exchange Agreement dated September 4, 1996, as amended
and restated on October 17, 1996 (the "Exchange Agreement"), to which
Industries and the Subsidiaries are parties, the responsibility for the
payment of any resulting Deficiency shall be borne solely by the
corporation which committed such breach; and in the event the Deficiency
results from the breach by more than one of the corporations of such
representations or covenants, the responsibility for the payment of the
Deficiency shall be shared by each of the corporations which committed such
breach in the proportion which the percentage specified for such
corporation in Section 3(a)(ii) bears to the sum of the percentages
specified therein for each of the corporations which committed such breach;
and (ii) if a Deficiency is attributable to a transaction, other than the
Split-offs, which was consummated pursuant to the Amended and Restated
Reorganization Agreement dated September 4, 1996, as amended and restated
on October 17, 1996 (the "Reorganization Agreement"), among Industries,
Micro and Entertainment, the responsibility for the payment of such
Deficiency shall be borne 23.01 percent by Industries, 72.84 percent by
Micro and 4.15 percent by Entertainment, as determined after the
application of the procedures set forth in Section 3(a)(iii), if
appropriate.
(d) In the event that the Split-off of Entertainment fails to
qualify for tax-free treatment under Section 355 of the Code and Section
3(c)(i) of this Agreement is not applicable, the amount of the resulting
Deficiency shall first be offset against and reduce the amount reflected in
the Interim Reserve and, to the extent that such Deficiency exceeds the
balance in the Interim Reserve (after giving effect to any prior reduction
in the Interim Reserve made under this Agreement), shall then be offset
against and reduce the balance reflected in the Reserve (after giving
effect to any prior reduction in the Reserve made under this Agreement);
provided, however, that no such offset against and reduction of the Reserve
shall be permitted if (i) the Split-off of Entertainment was not completed
in accordance with the provisions of the Exchange Agreement and the
Reorganization Agreement, or (ii) the facts and circumstances of the Split-
off of Entertainment differed in any material respect from the description
thereof (including the representations relating thereto) set forth in the
private letter ruling dated October 16, 1996 from the Internal Revenue
Service regarding the Split-offs unless a supplemental private letter
ruling reasonably satisfactory to Micro addressing any such differences is
obtained prior to such Split-off. Industries shall be responsible for the
payment of the amounts of such resulting Deficiency which are offset
against the Interim Reserve and the Reserve in accordance with this Section
3(d). To the extent that the amount of the resulting Deficiency exceeds
the amount offset against the Interim Reserve and the Reserve under this
Section 3(d), the responsibility for the payment of such excess amount
shall be borne 23.01 percent by Industries, 72.84 percent by Micro and 4.15
percent by Entertainment. In all other instances, the Deficiency shall be
borne 84.72 percent by Industries and 15.28 percent by Entertainment.
4. Refunds.
(a) In the event that a refund of Income Tax (other than a
refund attributable to a carryback of a loss or tax credit) is received by
Industries with respect to a Federal Consolidated Return or a State
Consolidated Return for any taxable year or portion thereof ending on or
before a Subsidiary's Split-off Date, the portion of such refund which is
attributable to items of a Subsidiary shall be promptly paid by Industries
to such Subsidiary, together with any interest received on such portion;
provided, however, that in the event that a refund is received with respect
to an amount of a Deficiency which was paid by Industries or a Subsidiary
in accordance with Section 3 above, Industries and each Subsidiary shall be
entitled to the portion of such refund, together with interest thereon,
which is the same as the proportion of the Deficiency which was paid by
such party.
(b) In the event that a Subsidiary has a net operating loss, net
capital loss or credits against tax for a taxable year beginning after such
Subsidiary's Split-off Date which, under applicable federal or state law,
may be carried back to a Consolidated Federal Return or State Consolidated
Return for a taxable period or portion thereof of the Subsidiary which ends
on or before such Subsidiary's Split-off Date, Industries shall pay to such
Subsidiary, within ten (10) days of the receipt of such refund, the amount
of the Income Tax benefit actually received by the Affiliated Group or the
applicable state consolidated, combined or unitary group, as the case may
be, as a result of such carryback. The tax benefit received as a result of
a carryback shall be considered to be equal to the excess of (i)
the Income Taxes which would have been payable for the taxable period to which
the loss or credit is carried in the absence of such carryback over (ii) the
Income Taxes actually payable for such period after taking such carryback into
effect. In the event that any portion of a carryback is disallowed following
payment to a Subsidiary of the tax benefit received from such carryback, the
Subsidiary shall repay to Industries the amount which would not have been
payable to the Subsidiary hereunder if only the portion of the carryback
actually allowed had been taken into account.
5. Allocation of Items. In the case of an assessment or refund
which is imposed or received with respect to an Income Tax Refund filed for
a taxable period that includes but does not end on a Subsidiary's Split-off
Date, the amount of the assessment or refund which relates to the portion
of the taxable period ending on such Subsidiary's Split-off Date shall be
determined by allocating the items to which the assessment or refund
relates to the date on which such items are properly taken into account for
Income Tax purposes, and in the case of any item which cannot be allocated
to a specific date, by ratably allocating such item between the portion of
the taxable period ending on such Subsidiary's Split-off Date and the
portion of the taxable period beginning immediately after such Subsidiary's
Split-off Date based on the number of days in such respective portions.
6. Certain Changes. Following a Subsidiary's Split-off Date, neither
Industries nor such Subsidiary shall, without the prior written consent of the
other parties to this Agreement, make or change any Income Tax election, adopt
or change any accounting method, file any amended Income Tax Return or agree
to or settle any claim, proposed adjustment or assessment if such action would
result in an increase in Income Tax liability or a reduction in any deduction,
credit, loss or other Income Tax attribute for any taxable period or portion
thereof of Industries or such Subsidiary which ends on or before such
Subsidiary's Split-off Date.
7. Deductions Related to Options. It is agreed by the parties that
where an option to purchase stock of Industries which is held by an
employee of Industries or Entertainment is converted in connection with the
Micro Split-off into an option to purchase stock of Micro, and Micro issues
its stock to such employee pursuant to the exercise of the converted
option, then, to the extent that Industries or Entertainment is entitled to
an Income Tax deduction for the amount of compensation which results to the
employee from exercise of the converted option, Industries or Entertainment
shall pay to Micro the amount of the tax benefit received by such
corporation from the compensation deduction.
8. Contests. Industries shall have the right to control any audit,
administrative or judicial proceeding involving a claim, proposed
adjustment, assessment or other contest with respect to a Consolidated
Federal Return, Consolidated State Return, or a separate Income Tax return
filed by Industries or a Subsidiary for any taxable period or portion
thereof ending on or prior to such Subsidiary's Split-off Date, and
Industries shall have the right to determine when to settle such claim,
adjustment, assessment or contest; provided, however, that Industries shall
consult with a Subsidiary regarding any such proceeding to the extent that
such proceeding may affect the tax liability of such Subsidiary for a
taxable period or portion thereof beginning after such Subsidiary's Split-
off Date and shall obtain the consent of a Subsidiary, which consent shall
not be unreasonably withheld, to any proposed settlement if such settlement
would increase the tax liability of such Subsidiary for a taxable period or
portion thereof beginning after such Subsidiary's Split-off Date. The
legal fees and other expenses incurred by Industries in connection with any
such proceeding shall be borne 23.01 percent by Industries, 72.84 percent
by Micro and 4.15 percent by Entertainment for proceedings related to
periods ending on or before the Micro Split-off Date. For proceedings
relating to the Interim Period, any such fees and expenses shall be borne
84.72 percent by Industries and 15.28 percent by Entertainment. Industries
shall allow a Subsidiary and its counsel to participate in any such
proceeding to the extent that the proceeding relates to such Subsidiary,
and the legal fees and other expenses incurred by a Subsidiary in this
regard shall be borne by the parties in the same proportions set forth in
the immediately preceding sentence.
9. Cooperation and Assistance. Industries and each Subsidiary agree
to provide each other with such cooperation and information as either of
them may reasonably request in connection with the preparation of Income
Tax returns, amended returns, claims for refunds or other income tax
filings or the conduct of any audit, administrative or judicial proceeding
relating to Income Taxes. Industries and each Subsidiary further agree to
retain all books, records, documents, accounting data or other information
which relate to Income Tax returns for taxable periods ending on or prior
to or which include such Subsidiary's Split-off Date, until the expiration
of the applicable statute of limitations (giving effect to any extension,
waiver or mitigation thereof).
10. Governing Law. This Agreement shall be construed under and governed
by the laws of the State of Tennessee.
11. Headings. The headings contained in this Agreement are for
reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
12. Entire Agreement; Amendment; Waiver. This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and may not be altered or amended except in writing
signed by the parties. The failure of a party hereto at any time to
require the performance of any provision hereunder shall in no manner
affect the right to enforce the same. No waiver by any party hereto of any
condition, or of the breach of any provision of this Agreement shall be
deemed or construed as a further or continuing waiver of any such condition
or of the breach of any other provision herein contained.
13. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. This Agreement shall not be construed so as
to benefit any person other than the parties hereto and such successors and
assigns.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the date first written above.
INGRAM INDUSTRIES INC.
By: /s/ John R. Ingram
---------------------------
Title: Co-President
INGRAM ENTERTAINMENT INC.
By: /s/ David B. Ingram
---------------------------
Title: Chairman and President
INGRAM MICRO HOLDINGS INC.
By: /s/ Jeffrey R. Rodek
---------------------------
Title: President
EXHIBIT 10.18
MASTER SERVICES AGREEMENT
AGREEMENT dated as of November 6, 1996, between Ingram
Industries Inc., a Tennessee corporation ("Industries") and Ingram Micro Inc.,
a Delaware corporation ("Micro").
In consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
ARTICLE 1
PERFORMANCE OF SERVICES
SECTION 1.1. Provision of Services. (a) On the terms and
subject to the conditions of this Agreement, during the term of this Agreement
Industries agrees to provide to Micro and its Subsidiaries, or procure the
provision to Micro and its Subsidiaries of, and Micro (on behalf of itself and
its Subsidiaries) agrees to purchase from Industries, the services described
on the Schedules attached hereto (the "Services"), including without
limitation Services in connection with the administration of certain employee
benefit plans and arrangements set forth on such Schedules (the "Plans").
Notwithstanding anything herein to the contrary, Industries shall only perform
Services involving the administration of the Micro Thrift Plan (as defined in
the Employee Benefits Transfer and Assumption Agreement dated as of
November 6, 1996 among the parties hereto) upon the written request of
Micro (or an appropriate committee designated thereby) and on the condition
that the terms of the Micro Thrift Plan are acceptable to Industries.
Unless otherwise specifically agreed by the parties, the Services to be
provided or procured by Industries hereunder shall be substantially similar
in scope, quality and nature to those provided to, or procured on behalf
of, Micro and its Subsidiaries prior to the date hereof.
(b) Any administration of the Plans by Industries pursuant to
the terms hereof shall be subject to applicable regulatory requirements and
the terms of the governing plan documents as interpreted by the appropriate
plan fiduciaries. The parties shall cooperate fully with each other in the
administration and coordination of regulatory and administrative
requirements associated with the Plans. Such coordination, upon request,
will include (but not be limited to) the following: sharing payroll data
for determination of highly compensated associates, providing census
information (including accrued benefits) for purposes of running
discrimination tests, providing actuarial reports for purposes of
determining the funded status of any plan, review and coordination of
insurance and other independent third party contracts, and providing for
review of all summary plan descriptions, requests for determination
letters, insurance contracts, Forms 5500, financial statement disclosures
and plan documents.
SECTION 1.2. Service Fees; Expenses. (a) The Schedules
hereto indicate, with respect to each Service listed thereon, the method by
which fees (the "Service Fees") to be charged to Micro for such Service
will be determined. Micro agrees to pay to Industries in the manner set
forth in Section 1.3 the Service Fees applicable to each of the Services
provided by Industries to Micro (and its Subsidiaries) pursuant to the
terms hereof.
(b) In addition to any other amounts payable to Industries
hereunder, Micro shall reimburse Industries in the manner set forth in
Section 1.3 for (i) all out-of-pocket expenses (including without
limitation travel expenses, professional fees, printing and postage)
incurred by Industries in connection with the performance of Services
pursuant to this Agreement, to the extent that such expenses have not
already been taken into account in determining the Service Fees applicable
to such Services and (ii) without duplication, all costs and expenses
(including without limitation any contributions, premium costs and third-
party expenses), incurred by Industries in connection with its
administration of the Plans.
(c) In addition to any other amounts payable to Industries
hereunder, Micro shall reimburse Industries in the manner set forth in
Section 1.3 for any taxes, excises, imposts, duties, levies, withholdings
or other similar charges (excepting any charges for taxes due on
Industries' income) that Industries and its Subsidiaries may be required to
pay on account of Micro (and its Subsidiaries) in connection with the
performance of Services or with respect to payments made by Micro for such
Services pursuant to this Agreement.
SECTION 1.3. Invoicing and Settlement of Costs. (a)
Industries will deliver an invoice to Micro on a monthly basis (not later
than the fifth day of each accounting month) for (i) Service Fees in
respect of Services provided during the prior accounting month to Micro
(and its Subsidiaries) and (ii) other amounts owing to Industries pursuant
to Section 1.2. Except as otherwise provided in this Agreement, each such
invoice will be prepared and delivered in a manner substantially consistent
with the billing practices used in connection with services provided to
Micro prior to the date hereof; provided that each such invoice shall (A)
provide sufficient detail to identify each Service, the fee therefor and
the method of calculating such fee, (B) identify all third party costs
included in the invoice to the extent specifically billed and (C) include
such other data as may be reasonably requested by Micro. In addition,
Micro shall have the right to examine any and all books and records as it
reasonably requests in order to confirm and verify the calculation of the
amount of any payment pursuant to this Section and Industries shall
cooperate in any reasonable manner in such examination as Micro shall
request.
(b) Payment (including payment of any amounts disputed
pursuant to Section 1.3(c)) of each invoice shall be due from Micro on the
day (or the next business day, if such day is not a business day) that is
the later of (i) the third day prior to the end of the accounting month in
which such invoice was received and (ii) the tenth day after the receipt of
such invoice (each, a "Payment Date"), by wire transfer of immediately
available funds payable to the order of Industries. If Micro fails to make
any payment within 30 days of the relevant Payment Date, the party that has
failed to make such payment shall be obligated to pay, in addition to the
amount due on such Payment Date, interest on such amount at the prime, or
best rate announced by Nationsbank of Texas, N.A. per annum compounded
annually from the relevant Payment Date through the date of payment.
(c) In the event that Micro disputes any charges invoiced by
Industries pursuant to this Agreement, Micro shall deliver a written
statement describing the dispute to Industries within 15 days following
receipt of the disputed invoice. The statement shall provide a
sufficiently detailed description of the disputed items. The parties
hereto shall use their best efforts to resolve any such disputes. Amounts
not so disputed shall be deemed accepted. Disputed amounts resolved in
favor of Micro (together with interest on such amounts at the prime, or
best rate announced by Nationsbank of Texas, N.A. per annum compounded
annually from the date such disputed amounts were paid to Industries to the
next relevant Payment Date) shall be credited against payments owing by
Micro to Industries on the next relevant Payment Date.
(d) Unless otherwise specified on the Schedules hereto, in
the event that the actual utilization of a Service is less than the period
specified on such Schedules with respect to such Service, then the Service
Fees for such Service shall be prorated on the basis of actual utilization
of such Service; provided that the monthly charges shall not be prorated on
any period of time less than one day, the per diem charge shall not be
prorated on any period of time less than one-half day, and the hourly
charges shall not be prorated on any period of time less than one hour.
SECTION 1.4. Term. (a) The term of this Agreement shall
commence on the date hereof and shall end on December 31, 1996 (or, with
respect to payroll services provided to Micro, on December 31, 1997), unless
earlier terminated pursuant to the terms hereof. The provisions of Section
1.2 (with respect to amounts accrued prior to such termination) shall survive
any termination of this Agreement.
(b) At any time, Micro may request Industries to discontinue
performing all or any portion of the Services upon 45 days' prior written
notice.
SECTION 1.5. Limited Warranty. Industries will provide
the Services hereunder in good faith, with the care and diligence that it
exercises in the performance of such services for its divisions and
Subsidiaries. Micro hereby acknowledges that Industries does not regularly
provide to third parties services such as the Services as part of its
business and that, except as set forth in Section 1.1 or in this Section
1.5, Industries does not otherwise warrant or assume any responsibility for
its Services. The warranty stated above is in lieu of and exclusive of all
other representations and warranties of any kind whatsoever. EXCEPT AS
STATED ABOVE, THERE ARE NO WARRANTIES RELATING TO THE SERVICES OF ANY KIND,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
SECTION 1.6. Performance Remedy. In the event that
Industries fails to provide a Service hereunder, or the quality of a
Service is not in accordance with Section 1.1 or Section 1.5, Micro may
give Industries prompt written notice thereof. Industries will then have
thirty days to cure the defective Service. If after such period Industries
has failed to cure the defective Service, Micro may seek an alternative
provider for such Service and Industries shall discontinue performing such
Service at the written request of Micro. Micro shall be liable to
Industries for any Service performed by Industries after Industries has
been given written notice of termination of such Service pursuant to this
Section 1.6, except for any out-of-pocket costs incurred by Industries in
connection with the cessation of such Services or the transfer of such
Services back to Micro or its designees. Except as otherwise expressly
provided in Article 2, the provisions of this Section 1.6 will provide the
exclusive remedy for any misrepresentation, breach of warranty, covenant or
other agreement or other claim arising out of this Agreement or the
Services to be performed hereunder.
ARTICLE 2
INDEMNIFICATION
SECTION 2.1. Limitation of Liability. Micro agrees that
none of Industries, any of its Subsidiaries or any of their respective
directors, officers, agents and employees (each, an "Industries Indemnified
Person") shall have any liability, whether direct or indirect, in contract,
tort or otherwise, to Micro arising out of or attributable to the performance
or nonperformance of Services pursuant to this Agreement.
SECTION 2.2. Indemnification. (a) Micro agrees to and
does hereby indemnify and hold each Industries Indemnified Person harmless
from and against any and all damage, loss, liability and expense (including
without limitation reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any action, claim, suit or
proceeding, including any expenses incurred in connection with the
enforcement of the rights of such Industries Indemnified Person pursuant to
this Agreement) to which such Industries Indemnified Person may be
subjected as a result of a claim made by a third party arising out of or
attributable, directly or indirectly, (i) to the performance or
nonperformance for Micro of any Services or (ii) otherwise in connection
with this Agreement.
(b) The parties agree to follow the procedures set forth in
Section 5.3(a) and 5.3(b) of the Amended and Restated Reorganization
Agreement dated as of September 4, 1996, as amended and restated as of
October 17, 1996, among the parties hereto and Ingram Entertainment Inc.
with respect to any claim for indemnification made pursuant to this Section
2.2.
SECTION 2.3. Ownership of Work Product. (a) Except for
the data provided by Micro to Industries and the reports produced by
Industries for Micro pursuant to this Agreement, all proprietary tools and
methodologies and all written material including programs, tapes, listing
and other programming documentation which were preexisting or originated
and prepared by Industries pursuant to this Agreement shall belong to
Industries except as otherwise agreed by the parties in a separate written
agreement signed by each party.
(b) No license under any trade secrets, copyrights, or other
rights is granted by this Agreement or any disclosure hereunder.
(c) Micro shall have reasonable access to all data, records,
files, statements, records, invoices, billings, and other information
generated by or in custody of Industries relating to the Services provided
pursuant to this Agreement. Unless otherwise specified by Micro or
required by law, Industries shall maintain all such business records
pertaining to the Services and will retain the records pertaining to each
Service for a period of twelve months after the cessation of such Service.
At the request of Micro, Industries shall provide copies of records
pertaining to the Services.
ARTICLE 3
GENERAL PROVISIONS
SECTION 3.1. Parties. Nothing in this Agreement, express
or implied, is intended to confer upon any person not a party any rights and
remedies hereunder.
SECTION 3.2. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Tennessee, without regard to its conflict of laws provisions.
SECTION 3.3. Headings. The Section and other headings
contained in this Agreement are for reference purposes only and shall not in
any way affect the meaning or interpretation of this Agreement.
SECTION 3.4. Entire Agreement. This Agreement constitutes
the entire agreement between the parties in respect of the subject matter
contained herein and neither this Agreement nor any term or provision
hereof may be amended or waived except by an instrument in writing signed,
in the case of an amendment, by each party and, in the case of a waiver, by
the party against whom the waiver is to be effective.
SECTION 3.5. Assignments. This Agreement shall not be
assignable by either party without the written consent of the other parties
hereto. No assignment of any right or benefit hereunder shall relieve any
obligation of the assignor hereunder without the written consent of the other
parties.
SECTION 3.6. Notices. Any notice, request, instruction or
other document to be given hereunder by either party hereto to the other
party hereto shall be in writing (including telecopier or similar writing)
and shall be given to such party at its address set forth on the signature
pages hereof, or to such other address as the party to whom notice is to be
given may provide in a written notice to the party giving such notice, a
copy of which written notice shall be on file with the Secretary of
Industries. Each such notice, request or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to
the telecopy number specified on the signature pages hereof and the
appropriate confirmation is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage
prepaid addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in this Section 3.6.
SECTION 3.7. Definitions. Terms used but not defined
herein shall have the meanings set forth in the Amended and Restated
Reorganization Agreement dated as of September 4, 1996, as amended and
restated as of October 17, 1996 among the parties hereto and Ingram
Entertainment Inc.
SECTION 3.8. Severability. The invalidity or
unenforceability of any provisions of this Agreement in any jurisdiction
shall not affect the validity, legality or enforceability of the remainder
of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any
other jurisdiction, it being intended that all rights and obligations of
the parties hereunder shall be enforceable to the fullest extent permitted
by law.
SECTION 3.9. Independent Contractors. The parties hereto
are independent contractors. Nothing in this Agreement is intended or
shall be deemed to constitute a partnership, agency, franchise or joint
venture relationship between the parties. No party shall incur any debts
or make any commitments for the others, except to the extent, if at all,
specifically provided herein.
SECTION 3.10. Remedies. The parties hereby acknowledge and
agree that in the event of any breach of this Agreement, the parties would
be irreparably harmed and could not be made whole by monetary damages.
Each party hereto agrees (i) not to assert by way of defense or otherwise
that a remedy at law would be adequate, and (ii) in addition to any other
remedy to which the parties may be entitled, that the remedy of specific
performance of this Agreement is appropriate in any action in court.
SECTION 3.11. Consent to Jurisdiction. Each party hereto
irrevocably submits to the non-exclusive jurisdiction of any Tennessee
State Court or United States Federal Court sitting in the Middle District
of Tennessee over any suit, action or proceeding arising out of or relating
to this Agreement. Each party hereto waives any right it may have to
assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this Section 3.11.
Nothing in this paragraph shall affect or limit any right to serve process
in any manner permitted by law, to bring proceedings in the courts of any
jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
SECTION 3.12. Counterparts. This Agreement may be executed
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.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
INGRAM INDUSTRIES INC.
By: /s/ John R. Ingram
----------------------------
Name: John R. Ingram
Title: Co-President
One Belle Meade Place
4400 Harding Road
Nashville, TN 32705
Telecopy: (615) 298-8242
INGRAM MICRO INC.
By: /s/ Jeffrey R. Rodek
----------------------------
Name: Jeffrey R. Rodek
Title: President
1600 East Saint Andrew Place
Santa Ana, CA 92705
Telecopy: (714) 566-7900
EXHIBIT 10.19
EMPLOYEE BENEFITS TRANSFER and ASSUMPTION
AGREEMENT
AGREEMENT dated as of November 6, 1996, among Ingram
Industries Inc., a Tennessee corporation ("Industries"), Ingram Micro Inc., a
Delaware corporation ("Micro"), and Ingram Entertainment Inc., a Tennessee
corporation ("Entertainment" and, together with Industries and Micro, the
"Ingram Companies").
NOW, THEREFORE, it is agreed as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used
herein, shall have the following meanings:
"Code" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder.
"Employee Benefit Plan" means any "employee benefit plan" (as
defined in Section 3(3) of ERISA) maintained at any time by any of the Ingram
Companies or their Subsidiaries.
"Entertainment Employees" means those individuals listed on the
payroll records of Entertainment or any Subsidiary thereof immediately after
the Second Closing.
"Entertainment Group" means all Entertainment Employees and
Entertainment Retirees, including their respective beneficiaries.
"Entertainment Retiree" means each individual who was employed
by Entertainment or any Subsidiary thereof immediately prior to such
individual's retirement or other termination of employment from all Ingram
Companies and their Subsidiaries or is otherwise listed on Schedule 3 as an
Entertainment Retiree.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder.
"Exchange Agreement" means the Amended and Restated Exchange
Agreement dated as of September 4, 1996, as amended and restated as of October
17, 1996, among the Ingram Companies and the other persons listed on the
signature pages thereof.
"First Closing" and "First Closing Date" shall have the
meanings ascribed thereto in the Exchange Agreement.
"Industries Employees" means those individuals listed on the
payroll records of Industries or any Subsidiary thereof immediately after the
First Closing.
"Industries Equity-Based Plans" means the plans identified as
such on Schedule 6 hereto.
"Industries Group" means all Industries Employees and
Industries Retirees, including their respective beneficiaries.
"Industries Retiree" means each individual who was employed by
Industries or any Subsidiary thereof immediately prior to such individual's
retirement or other termination of employment from all Ingram Companies and
their Subsidiaries and who is not otherwise a member of the Micro Group or
Entertainment Group.
"Micro Common Stock" means shares of Class B common stock, par
value $.01 per share, of Micro.
"Micro Employees" means those individuals listed on the payroll
records of Micro or any Subsidiary thereof immediately after the First
Closing.
"Micro Group" means all Micro Employees and Micro Retirees,
including their respective beneficiaries.
"Micro Retiree" means each individual who was employed by Micro
or any Subsidiary thereof immediately prior to such individual's retirement or
other termination of employment from all Ingram Companies and their
Subsidiaries or is otherwise listed on Schedule 3 as a Micro Retiree.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust, or other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Reorganization Agreement" shall have the meaning set forth in
the Exchange Agreement.
"Second Closing" and "Second Closing Date" shall have the
meanings ascribed thereto in the Exchange Agreement.
"Subsidiary" means, (i) with respect to Entertainment or Micro,
any entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are directly or indirectly owned by such Person
immediately after the First Closing and (ii) with respect to Industries, any
entity (other than Entertainment or its Subsidiaries) of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are
directly or indirectly owned by Industries immediately after the First Closing.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Terms Sections
- ----- --------
Actuarial Valuation 3.03
Entertainment Assumed Liabilities 3.04
Entertainment Indemnified Person 5.01
Entertainment Plan Participants 3.03
Entertainment Retirement Plan 3.03
Entertainment Supplemental Retirement
Assets and Liabilities 3.02
Entertainment Supplemental Thrift
Assets and Liabilities 3.02
Entertainment Thrift Plan 3.01
ERP Amount 3.03
ERP Transition Period 3.03
Industries Indemnified Person 5.01
Industries Retained Liabilities 3.04
Industries Retirement Plan 3.03
Industries Supplemental Executive Retirement Plan 3.02
Industries Supplemental Thrift Plan 3.02
Industries Thrift Plan 3.01
IRS 3.01
Loss 5.02
Micro Assumed Liabilities 3.04
Micro Indemnified Person 5.02
Micro Plan Participants 3.03
Micro Retirement Plan 3.03
Micro Supplemental Retirement
Assets and Liabilities 3.02
Micro Supplemental Thrift Assets
and Liabilities 3.02
Micro Thrift Plan 3.01
MRP Amount 3.03
MRP Transition Period 3.03
PBGC 3.03
Retained Retirement Assets and Liabilities 3.03
Retained Supplemental Assets
and Liabilities 3.02
Retained Thrift Assets and Liabilities 3.01
ARTICLE II
EMPLOYEES;
CERTAIN AGREEMENTS
SECTION 2.01. Employees. Subject to the terms and conditions
of this Agreement, effective at the time of the First Closing, Industries,
Micro and Entertainment or their respective Subsidiaries shall employ each
Industries Employee, Micro Employee or Entertainment Employee,
respectively. No provision of this Agreement, however, shall require any
Ingram Company or any of their respective Subsidiaries to continue the
employment of any of their respective employees following the First
Closing.
SECTION 2.02. Certain Agreements. (a) Except as provided
in Section 2.02(b), this Agreement shall not apply or be deemed to apply to
the Industries Equity-Based Plans and any options, awards, grants or sales
made or to be made thereunder shall not be deemed to be Micro Assumed
Agreements or Entertainment Assumed Agreements.
(b) Micro shall assume all liability relating to, and be
responsible for, all incentive stock units granted to Mr. Lawrence
Elcheson, under the Industries Equity-Based Plans. Industries shall inform
Micro on a quarterly basis of the status of such liability, including any
changes thereto.
ARTICLE III
ALLOCATION OF ASSETS AND LIABILITIES
SECTION 3.01. Industries Thrift Plan. (a) (i) As soon as
practicable after and effective as of the First Closing, Micro shall adopt
or designate a profit-sharing plan with a salary reduction arrangement that
covers the Micro Group and meets the requirements of Sections 401(a) and
401(k) of the Code ("Micro Thrift Plan"). Micro agrees that all service
credited under the Ingram Thrift Plan ("Industries Thrift Plan") as of the
First Closing with respect to the Micro Group shall be credited under the
Micro Thrift Plan for all plan purposes, including eligibility and vesting.
(ii) Within 30 days after the adoption or designation of
the Micro Thrift Plan by Micro or as soon as practicable thereafter,
Industries shall cause an amount, in cash or in kind as Industries and
Micro shall agree, equivalent to the account balances of all members of the
Micro Group under the Industries Thrift Plan as of the date of the
transfer, to be transferred from the trust maintained under the Industries
Thrift Plan to the trust maintained under the Micro Thrift Plan. Such
transfer shall include the number of shares of Micro Common Stock allocable
or attributable to the account balances of all members of the Micro Group.
Such transfer of assets shall be made only after Micro has supplied to
Industries either (A) a copy of an Internal Revenue Service ("IRS")
determination letter finding the Micro Thrift Plan to be a qualified plan
meeting the requirements of Sections 401(a) and 401(k) of the Code or (B)
an opinion of counsel or written representation from Micro (with
appropriate indemnities), in either case, to the effect that the Micro
Thrift Plan has been established in accordance with the Code and ERISA, and
an agreement that Micro will request a determination letter from the IRS
and make any and all changes to the Micro Thrift Plan necessary to receive
a favorable determination letter. Micro and Industries shall cooperate
with each other during the period beginning on the date hereof and ending
on the date the assets are transferred to the trust maintained under the
Micro Thrift Plan to ensure the ongoing operation and administration of the
Micro Thrift Plan and the Industries Thrift Plan with respect to the Micro
Group.
(iii) Notwithstanding anything herein to the contrary, each
transfer to the Micro Thrift Plan of shares of Micro Common Stock pursuant
to this Section shall be made in compliance with the provisions of the
Transfer Restrictions Agreement, if any, of even date herewith among Micro
and each of the other parties thereto, including Sections 2.1 and 3.7
thereof.
(b) (i) Not later than the Second Closing, Entertainment
shall adopt or designate a profit-sharing plan with a salary reduction
arrangement that covers the Entertainment Group and meets the requirements
of Sections 401(a) and 401(k) of the Code ("Entertainment Thrift Plan").
Entertainment agrees that all service credited under the Industries Thrift
Plan as of such adoption or designation with respect to the Entertainment
Group shall be credited under the Entertainment Thrift Plan for all plan
purposes, including eligibility and vesting.
(ii) Within 30 days after the adoption or designation of
the Entertainment Thrift Plan by Entertainment or as soon as practicable
thereafter, Industries shall cause an amount, in cash or in kind as
Industries and Entertainment shall agree, equivalent to the account
balances of all members of the Entertainment Group under the Industries
Thrift Plan as of the date of transfer to be transferred from the trust
maintained under the Industries Thrift Plan to the trust maintained under
the Entertainment Thrift Plan. Such transfer shall include the number of
shares of Micro Common Stock allocable or attributable to the account
balances of all members of the Entertainment Group. Such transfer of
assets shall be made only after Entertainment has supplied to Industries
either (A) a copy of an IRS determination letter finding the Entertainment
Thrift Plan to be a qualified plan meeting the requirements of Sections
401(a) and 401(k) of the Code or (B) an opinion of counsel or written
representation from Entertainment (with appropriate indemnities), in either
case, to the effect that the Entertainment Thrift Plan has been established
in accordance with the Code and ERISA, and an agreement that Entertainment
will request a determination letter from the IRS and make any and all
changes to the Entertainment Thrift Plan necessary to receive a favorable
determination letter. Entertainment and Industries shall cooperate with
each other during the period beginning on the date hereof and ending on the
date the assets are transferred to the trust maintained under the
Entertainment Thrift Plan to ensure the ongoing operation and
administration of the Entertainment Thrift Plan and the Industries Thrift
Plan with respect to the Entertainment Group.
(iii) Notwithstanding anything herein to the contrary, each
transfer to the Entertainment Thrift Plan of shares of Micro Common Stock
pursuant to this Section shall be made in compliance with the provisions of
the Transfer Restrictions Agreement, if any, of even date herewith among
Entertainment and each of the other parties thereto, including Sections 2.1
and 3.7 thereof.
(c) Industries shall retain all assets and liabilities
under the Industries Thrift Plan except as otherwise provided in Section
3.01(a) and (b) ("Retained Thrift Assets and Liabilities").
SECTION 3.02. Industries Supplemental Plans. (a) All
liabilities under the Ingram Supplemental Thrift Plan ("Industries
Supplemental Thrift Plan") and the Ingram Industries Inc. Supplemental
Executive Retirement Plan ("Industries Supplemental Retirement Plan") to
the extent applicable to any member of the Micro Group and any assets
allocable to such liabilities shall be transferred to and assumed by Micro
as of the First Closing ("Micro Supplemental Assets and Liabilities").
(b) All liabilities under the Industries Supplemental
Thrift Plan and the Industries Supplemental Retirement Plan to the extent
applicable to any member of the Entertainment Group and any assets
allocable to such liabilities shall be transferred to and assumed by
Entertainment not later than the Second Closing ("Entertainment
Supplemental Assets and Liabilities").
(c) Industries shall retain all assets and liabilities
under the Industries Supplemental Thrift Plan and the Industries
Supplemental Retirement Plan except as otherwise provided in Section
3.02(a) and (b) hereof and Article 3 of the Reorganization Agreement
("Retained Supplemental Assets and Liabilities").
SECTION 3.03. Industries Retirement Plan. (a) (i) As
soon as practicable after and effective as of the First Closing, Micro
shall adopt or designate a defined benefit plan ("Micro Retirement Plan")
that covers the members of the Micro Group listed as participants therein
on Schedule 2 and Schedule 3 ("Micro Plan Participants") and meets the
requirements of Section 401(a) of the Code. Micro agrees that all service
credited under the Ingram Retirement Plan (as amended effective January 1,
1989 and restated December 31, 1994) ("Industries Retirement Plan") as of
the First Closing with respect to the Micro Plan Participants shall be
credited under the Micro Retirement Plan for all plan purposes, including
eligibility, vesting and benefit accrual; provided, however, that those
individuals determined to be highly compensated employees under Section
414(q) of the Code shall accrue their benefits on and after the First
Closing under an unfunded defined benefit plan that is not qualified under
Section 401(a) of the Code.
(ii) Within 30 days after the adoption or designation of
the Micro Retirement Plan by Micro or as soon as practicable thereafter,
Industries shall cause an amount in cash or in kind determined as of the
First Closing pursuant to subparagraph (iii) below (the "MRP Amount"),
adjusted as set forth therein, to be transferred from the trust maintained
under the Industries Retirement Plan to the trust maintained under the
Micro Retirement Plan. Such transfer of assets shall be made only after
Micro has supplied to Industries (x) either (A) a copy of an IRS
determination letter finding the Micro Retirement Plan to be a qualified
plan meeting the requirements of Section 401(a) of the Code or (B) an
opinion of counsel or a written representation from Micro (with appropriate
indemnities), in either case, to the effect that the Micro Retirement Plan
has been established in accordance with the Code and ERISA, and an
agreement that Micro will request a determination letter from the IRS and
make any and all changes to the Micro Retirement Plan necessary to receive
a favorable determination letter and (y) information enabling the enrolled
actuary for the Industries Retirement Plan to issue the certification
required by Section 414(l) of the Code (Form 5310-A). Micro and Industries
shall cooperate with each other during the period beginning on the date
hereof and ending on the date the assets are transferred to the trust
maintained under the Micro Retirement Plan ("MRP Transition Period") to
ensure the ongoing operation and administration of the Micro Retirement
Plan and the Industries Retirement Plan with respect to the Micro Plan
Participants.
(iii) The MRP Amount shall be equal to that portion of the
total value of the assets held in the Industries Retirement Plan, valued as
of the First Closing Date or as soon as practicable thereafter, that bears
the same relation to such total as the aggregate present value of benefits
(vested and non-vested, including special early retirement benefits and
death benefit coverage both before and after the expected retirement ages
of Micro Plan Participants) accrued under the Industries Retirement Plan
for Micro Plan Participants, as determined in the Industries Retirement
Plan actuarial valuation as of January 1, 1996 (the "Actuarial Valuation"),
shall bear to the aggregate present value of such benefits accrued under
the Industries Retirement Plan for all participants therein, in each case
determined by Industries' enrolled actuary, using the projected unit credit
funding method and based on the actuarial assumptions used for funding
purposes as set forth in the Actuarial Valuation. The MRP Amount shall be
adjusted as may be required by the Pension Benefit Guaranty Corporation
("PBGC") and the IRS to maintain the status of the Industries Retirement
Plan or the Micro Retirement Plan as an employee pension plan meeting the
requirements of Section 401(a) of the Code. Within at least 30 days prior
to the First Closing or as soon as practicable thereafter, Industries and
Micro shall make any required governmental filings necessary to effect the
asset transfers described herein, including the filing of IRS Form 5310-A.
(iv) The assets to be transferred to the trust maintained
under the Micro Retirement Plan shall be held, invested and distributed as
required under the Industries Retirement Plan and the related trust
thereunder for the benefit of Micro Plan Participants during the MRP
Transition Period, pending the transfer to the trust maintained under the
Micro Retirement Plan pursuant to this Section 3.03(a). Industries and
Micro shall use their best efforts to effectuate the above transfer as
promptly as possible following the First Closing.
(b) (i) Not later than the Second Closing, Entertainment
shall adopt or designate a defined benefit plan that covers the
Entertainment Employees and members of the Entertainment Group listed on
Schedule 3 ("Entertainment Plan Participants") and meets the requirements
of Section 401(a) of the Code ("Entertainment Retirement Plan").
Entertainment agrees that all service credited under the Industries
Retirement Plan as of such adoption or designation with respect to the
Entertainment Plan Participants shall be credited under the Entertainment
Retirement Plan for all plan purposes, including eligibility, vesting and
benefit accrual.
(ii) Within 30 days after the adoption or designation of
the Entertainment Retirement Plan by Entertainment or as soon as
practicable thereafter, Industries shall cause an amount in cash or in kind
determined as of the Second Closing pursuant to subparagraph (iii) below
(the "ERP Amount"), adjusted as set forth therein, to be transferred from
the trust maintained under the Industries Retirement Plan to the trust
maintained under the Entertainment Retirement Plan. Such transfer of
assets shall be made only after Entertainment has supplied to Industries
(x) either (A) a copy of an IRS determination letter finding the
Entertainment Retirement Plan to be a qualified plan meeting the
requirements of Section 401(a) of the Code or (B) an opinion of counsel or
a written representation from Entertainment (with appropriate indemnities),
in either case, to the effect that the Entertainment Retirement Plan has
been established in accordance with the Code and ERISA, and an agreement
that Entertainment will request a determination letter from the IRS and
make any and all changes to the Entertainment Retirement Plan necessary to
receive a favorable determination letter and (y) information enabling the
enrolled actuary for the Industries Retirement Plan to issue the
certification required by Section 414(l) of the Code (Form 5310-A).
Entertainment and Industries shall cooperate with each other during the
period beginning on the date hereof and ending on the date the assets are
transferred to the trust maintained under the Entertainment Retirement Plan
(the "ERP Transition Period") to ensure the ongoing operation and
administration of the Entertainment Retirement Plan and the Industries
Retirement Plan with respect to the Entertainment Plan Participants.
(iii) The ERP Amount shall be equal to that portion of the
total value of the assets held in the Industries Retirement Plan, valued as
of the adoption or designation referred to in (i) above or as soon as
practicable thereafter, that bears the same relation to such total as the
aggregate present value of benefits (vested and non-vested, including
special early retirement benefits and death benefit coverage both before
and after the expected retirement ages of Entertainment Plan Participants)
accrued under the Industries Retirement Plan for Entertainment Plan
Participants, as determined in the Actuarial Valuation or such later
valuation to the extent one is available, shall bear to the aggregate
present value of such benefits accrued under the Industries Retirement Plan
for all participants therein, in each case determined by Industries'
enrolled actuary using the projected unit credit funding method and based
on the actuarial assumptions used for funding purposes as set forth in the
Actuarial Valuation. The ERP Amount shall be adjusted as may be required
by the PBGC and the IRS to maintain the status of the Industries Retirement
Plan or the Entertainment Retirement Plan as an employee pension plan
meeting the requirements of Section 401(a) of the Code. Within at least 30
days prior to the Second Closing or as soon as practicable thereafter,
Industries and Entertainment shall make any required governmental filings
necessary to effect the asset transfers described herein, including the
filing of IRS Form 5310-A.
(iv) The assets to be transferred to the trust maintained
under the Entertainment Retirement Plan shall be held, invested and
distributed as required under the Industries Retirement Plan and the
related trust thereunder for the benefit of Entertainment Plan Participants
during the ERP Transition Period, pending the transfer to the trust
maintained under the Entertainment Retirement Plan pursuant to this Section
3.03(b). Industries and Entertainment shall effectuate the above transfer
on such date as Industries and Entertainment shall agree but not later than
the Second Closing.
(c) Industries shall retain all assets and liabilities
under the Industries Retirement Plan except as otherwise provided in
Section 3.03(a) and (b) ("Retained Retirement Assets and Liabilities").
SECTION 3.04. Assumption of Liabilities Generally. (a)
Subject to the terms and conditions of this Agreement, effective as of the
First Closing, Micro shall assume and agree to pay when due, honor and
discharge, the following ("Micro Assumed Liabilities"):
(i) all obligations and liabilities arising under any
employment, separation or retirement agreement or arrangement to
the extent applicable to any member of the Micro Group which has
been established or entered into by any of the Ingram Companies or
any of their Subsidiaries, whether or not listed on any Schedule
attached hereto;
(ii) all obligations and liabilities arising under the Micro
Thrift Plan, the Micro Supplemental Assets and Liabilities and the
Micro Retirement Plan;
(iii) all obligations and liabilities arising under the welfare
benefit plans and other arrangements listed on or otherwise
described in Schedule 4 hereto to the extent applicable to any
member of the Micro Group;
(iv) all obligations and liabilities arising under any other
employee benefit plan or arrangement maintained at any time by any
of the Ingram Companies or any of their Subsidiaries to the extent
applicable to any member of the Micro Group;
(v) all obligations and liabilities to any member of the
Micro Group in respect of the continuation of coverage rules under
Sections 601 through 608 of ERISA and Section 4980B of the Code,
including all liabilities and obligations relating to qualifying
events that have occurred on or prior to the First Closing;
(vi) all obligations and liabilities arising under any
federal, state, local or foreign law, order or regulation
(including, without limitation, ERISA and the Code) to the extent
they relate to participation by any member of the Micro Group in
any Employee Benefit Plan, whether relating to events occurring on
or prior to the First Closing or arising by reason of the
transactions contemplated by this Agreement or otherwise; and
(vii) all statutory obligations and liabilities to any member
of the Micro Group, which arise, directly or indirectly, by reason
of the transactions contemplated by this Agreement.
(b) Subject to the terms and conditions of this Agreement,
effective as of such date as Industries and Entertainment shall agree but
not later than the Second Closing, Entertainment shall assume and agree to
pay when due, honor and discharge, the following ("Entertainment Assumed
Liabilities"):
(i) all obligations and liabilities arising under any
employment, separation or retirement agreement or arrangement to
the extent applicable to any member of the Entertainment Group
which has been established or entered into by any Ingram Company
or any of their Subsidiaries, whether or not listed on any
Schedule attached hereto;
(ii) all obligations and liabilities arising under the
Entertainment Thrift Plan, the Entertainment Supplemental Assets
and Liabilities and the Entertainment Retirement Plan;
(iii) all obligations and liabilities arising under the welfare
benefit plans and other arrangements listed on or otherwise
described in Schedule 4 hereto to the extent applicable to any
member of the Entertainment Group;
(iv) all obligations and liabilities arising under any other
employee benefit plan or arrangement maintained at any time by any
of the Ingram Companies or any of their Subsidiaries to the extent
applicable to any member of the Entertainment Group;
(v) all obligations and liabilities to any member of the
Entertainment Group in respect of the continuation of coverage
rules under Sections 601 through 608 of ERISA and Section 4980B of
the Code, including all liabilities and obligations relating to
qualifying events that have occurred on or prior to the Second
Closing;
(vi) all obligations and liabilities arising under any
federal, state, local or foreign law, order or regulation
(including, without limitation, ERISA and the Code) to the extent
they relate to participation by any member of the Entertainment
Group in any Employee Benefit Plan, whether relating to events
occurring on or prior to the Second Closing or arising by reason
of the transactions contemplated by this Agreement or otherwise;
and
(vii) all statutory obligations and liabilities to any member
of the Entertainment Group which arises, directly or indirectly,
by reason of the transactions contemplated by this Agreement.
(c) Subject to the terms and conditions of this Agreement,
effective as of the First Closing, Industries shall retain and agree to pay
when due, honor and discharge, the following ("Industries Retained
Liabilities"):
(i) all obligations and liabilities arising under any
employment, separation or retirement agreement or arrangement to
the extent applicable to any member of the Industries Group which
has been established or entered into by any of the Ingram
Companies or any of their Subsidiaries, whether or not listed on
any Schedule attached hereto;
(ii) obligations and liabilities arising under the Retained
Thrift Assets and Liabilities, the Retained Supplemental Assets
and Liabilities, and the Retained Retirement Assets and
Liabilities;
(iii) all obligations and liabilities arising under the welfare
benefit plans and other arrangements listed on or otherwise
described in Schedule 4 hereto to the extent applicable to any
member of the Industries Group;
(iv) all obligations and liabilities arising under any other
employee benefit plan or arrangement maintained at any time by any
Ingram Company or any of their Subsidiaries to the extent
applicable to any member of the Industries Group;
(v) all obligations and liabilities to any member of the
Industries Group in respect of the continuation of coverage rules
under Sections 601 through 608 of ERISA and Section 4980B of the
Code, including all liabilities and obligations relating to
qualifying events that have occurred on or prior to the First
Closing;
(vi) all obligations and liabilities arising under any
federal, state, local or foreign law, order or regulation
(including, without limitation, ERISA and the Code) to the extent
they relate to participation by any member of the Industries Group
in any Employee Benefit Plan, whether relating to events occurring
on or prior to the First Closing or arising by reason of the
transactions contemplated by this Agreement or otherwise; and
(vii) all statutory obligations and liabilities to any member
of the Industries Group, which arise, directly or indirectly, by
reason of the transactions contemplated by this Agreement.
(d) Subject to the terms and conditions of this Agreement,
effective as of the Second Closing Industries shall confirm to Entertainment
the retention by and agreement of Industries to pay when due, honor and
discharge the Industries Retained Liabilities.
(e) All obligations, liabilities and responsibilities arising
out of or relating to workers' compensation shall be transferred among and
assumed by the parties pursuant to the terms of the Risk Management Agreement
dated as of the First Closing among Industries, Micro and Entertainment.
SECTION 3.05. Method of Settlement. Notwithstanding anything
herein to the contrary, any transfer or assumption of liabilities pursuant to
this Article III shall be effected through a corresponding adjustment in the
relevant intercompany account balances of the parties hereto.
SECTION 3.06. Further Assurances. (a) On and after the date
hereof, Industries will, at the reasonable request of Micro, execute,
acknowledge and deliver all such endorsements, assurances, consents,
assignments, transfers, conveyances, powers of attorney and other instruments
and documents, and take such other actions necessary (i) to assign, transfer,
convey and deliver to Micro, acting in its fiduciary capacity, all the assets
to be transferred to Micro pursuant to Article III hereof and (ii) to assist
Micro in obtaining the consent and approval of all governmental bodies and
other Persons required to be obtained by Micro to effect the transfer thereof
and the assumption of the Micro Assumed Liabilities by Micro or otherwise
appropriate to carry out the transactions contemplated hereby.
(b) On and after the date hereof, Industries will, at the
reasonable request of Entertainment, execute, acknowledge and deliver all
such endorsements, assurances, consents, assignments, transfers,
conveyances, powers of attorney and other instruments and documents, and
take such other actions necessary (i) to assign, transfer, convey and
deliver to Entertainment, acting in its fiduciary capacity, all the assets
to be transferred to Entertainment pursuant to Article III hereof, and (ii)
to assist Entertainment in obtaining the consent and approval of all
governmental bodies and other Persons required to be obtained by
Entertainment to effect the transfer thereof and the assumption of the
Entertainment Assumed Liabilities by Entertainment or otherwise appropriate
to carry out the transactions contemplated hereby.
(c) On and after the date hereof, each of Micro and
Entertainment will, at the reasonable request of Industries, execute,
acknowledge and deliver all such assumptions, endorsements and other
instruments and documents, and take such other actions necessary (i) to
assume, pay, honor and discharge the Micro Assumed Liabilities and
Entertainment Assumed Liabilities, respectively, and (ii) to assist
Industries in obtaining the consent and approval of all governmental bodies
and other Persons required to be obtained by Industries to effect the
transfer of the assets to be transferred to Micro or Entertainment pursuant
to Article III hereof, respectively, and the assumption of the Micro
Assumed Liabilities and Entertainment Assumed Liabilities by Micro and
Entertainment, respectively, or otherwise appropriate to carry out the
transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Certain Industries Representations.
Industries hereby represents and warrants to Micro and Entertainment on the
date hereof, and to Entertainment on the date of the adoption or
designation of the Entertainment Thrift Plan and the Entertainment
Retirement Plan, that the Industries Thrift Plan and the Industries
Retirement Plan have been established in accordance with the Code and
ERISA, are qualified under Section 401(a) of the Code, have been so
qualified during the period from their adoption to the date hereof and each
will be so qualified as of the date of the transfers referred to in Section
3.01 and 3.03 respectively, and that each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code.
ARTICLE V
INDEMNIFICATION
SECTION 5.01. Indemnification by Micro. Micro agrees to
indemnify and hold harmless Entertainment and its Subsidiaries and their
respective directors, officers, agents and employees (each, an
"Entertainment Indemnified Person") and Industries, its Subsidiaries and
their respective directors, officers, agents and employees (each, an
"Industries Indemnified Person") from any and all damage, loss, liability
and expense (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection
with any action, suit or proceeding) (collectively, "Loss") incurred or
suffered by such Entertainment Indemnified Person or Industries Indemnified
Person, as the case may be, arising out of or related to the Micro Assumed
Liabilities.
SECTION 5.02. Indemnification by Entertainment.
Entertainment agrees to indemnify and hold harmless Micro and its
Subsidiaries and their respective directors, officers, agents and employees
(each, a "Micro Indemnified Person") and each Industries Indemnified Person
from any and all Losses, incurred or suffered by such Micro Indemnified
Person or Industries Indemnified Person, as the case may be, arising out of
or related to the Entertainment Assumed Liabilities.
SECTION 5.03. Indemnification by Industries. Industries
agrees to indemnify and hold harmless each Entertainment Indemnified Person
and each Micro Indemnified Person from any and all Losses, incurred or
suffered by such Micro Indemnified Person or Industries Indemnified Person,
as the case may be, arising out of or related to the Industries Retained
Liabilities.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. Parties. Nothing in this Agreement, express
or implied, is intended to confer upon any person not a party any rights
and remedies hereunder.
SECTION 6.02. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Tennessee, without regard to its conflict of laws provisions.
SECTION 6.03. Headings. The Section and other headings
contained in this Agreement are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.
SECTION 6.04. Entire Agreement. This Agreement constitutes
the entire agreement between the parties in respect of the subject matter
contained herein and neither this Agreement nor any term or provision
hereof may be amended or changed except by an instrument in writing signed
by Industries, Micro and Entertainment. Industries shall deliver prompt
written notice to each other party hereto of any amendment to this
Agreement approved pursuant to this Section.
SECTION 6.05. Assignments. This Agreement shall not be
assignable by any party, without the written consent of the other parties
hereto. No assignment of any right or benefit hereunder shall relieve any
obligation of the assignor hereunder without the written consent of the
other party.
SECTION 6.06. Notices. Any notice, request, instruction or
other document to be given hereunder by any party hereto to another party
hereto shall be in writing (including telecopier or similar writing) and
shall be given to such party at its address set forth on the signature
pages hereof, or to such other address as the party to whom notice is to be
given may provide in a written notice to the party giving such notice, a
copy of which written notice shall be on file with the Secretary of
Industries. Each such notice, request or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to
the telecopy number specified on the signature pages hereof and the
appropriate confirmation is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage
prepaid addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in this Section 6.06.
SECTION 6.07. Severability. The invalidity or
unenforceability of any provisions of this Agreement in any jurisdiction
shall not affect the validity, legality or enforceability of the remainder
of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any
other jurisdiction, it being intended that all rights and obligations of
the parties hereunder shall be enforceable to the fullest extent permitted
by law.
SECTION 6.08. Counterparts. This Agreement may be executed
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.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
INGRAM INDUSTRIES INC.
By: /s/ John R. Ingram
----------------------------
Name: John R. Ingram
Title: Co-President
One Belle Meade Place
4400 Harding Road
Nashville, TN 32705
Telecopy: (615) 298-8242
INGRAM MICRO INC.
By: /s/ Jeffrey R. Rodek
----------------------------
Name: Jeffrey R. Rodek
Title:
1600 East Saint Andrew Place
Santa Ana, CA 92705
Telecopy: (714) 566-7900
INGRAM ENTERTAINMENT INC.
By: /s/ David B. Ingram
----------------------------
Name: David B. Ingram
Title: Chairman and President
Two Ingram Boulevard
La Vergne, TN 37086
Telecopy: (615) 287-4985
EXHIBIT 10.20
DATA CENTER SERVICES AGREEMENT
AGREEMENT dated as of November 6, 1996, among Ingram Micro
Inc., a Delaware corporation ("MICRO"), Ingram Book Company ("BOOK"), a
division of Ingram Industries Inc., a Tennessee corporation, and Ingram
Entertainment Inc., a Tennessee corporation ("ENTERTAINMENT").
In consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:
ARTICLE 1
PERFORMANCE OF SERVICES
SECTION 1.1. PROVISION OF SERVICES. On the terms and subject
to the conditions of this Agreement, during the term of this Agreement
Micro agrees to provide to Book, Entertainment and their respective
Subsidiaries, or procure the provision to each of Book, Entertainment and
their respective Subsidiaries of, and each of Book and Entertainment (on
behalf of itself and its Subsidiaries) agrees to purchase from Micro, the
services performed at the Ingram Micro Data Center in La Vergne, Tennessee
and described on the Schedules attached hereto (the "SERVICES"). Unless
otherwise specifically agreed by the parties, the Services to be provided
or procured by Micro hereunder shall be substantially similar in scope,
quality and nature to those provided to, or procured on behalf of, Book,
Entertainment and their respective Subsidiaries prior to the date hereof.
SECTION 1.2. SERVICE FEES; EXPENSES. (a) The Schedules
hereto indicate, with respect to each Service listed thereon, the method by
which fees (the "SERVICE FEES") to be charged to Book or Entertainment, as
the case
may be, for such Service will be determined. Each of Book and Entertainment
agrees to pay to Micro in the manner set forth in Section 1.3 the Service Fees
applicable to each of the Services provided by Micro to Book (and its
Subsidiaries) and Entertainment (and its Subsidiaries), respectively, pursuant
to the terms hereof.
(b) In addition to any other amounts payable to Micro
hereunder, each of Book and Entertainment shall reimburse Micro in the
manner set forth in
(c) In addition to any other amounts payable to Micro
hereunder, each of Book and Entertainment shall reimburse Micro in the
manner set forth in Section 1.3 for all out-of-pocket expenses (including
without limitation travel expenses, professional fees, printing and
postage) incurred by Micro in connection with the performance of Services
pursuant to this Agreement, to the extent that such expenses have not
already been taken into account in determining the Service Fees applicable
to such Services.
(c) In addition to any other amounts payable to Micro
hereunder, each of Book and Entertainment shall reimburse Micro in the
manner set forth in Section 1.3 for any taxes, excises, imposts, duties,
levies, withholdings or other similar charges (excepting any charges for
taxes due on Micro's income) that Micro and its Subsidiaries may be
required to pay on account of Book (and its Subsidiaries) and Entertainment
(and its Subsidiaries), respectively, in connection with the performance of
Services or with respect to payments made by Book or Entertainment for such
Services pursuant to this Agreement.
SECTION 1.3. INVOICING AND SETTLEMENT OF COSTS. (a) Micro
will deliver an invoice to each of Book and Entertainment on a monthly
basis (not later than the fifth day of each accounting month) for (i)
Service Fees in respect of Services provided during the prior accounting
month to Book (and its Subsidiaries) and Entertainment (and its
Subsidiaries), respectively, and (ii) other amounts owing to Micro pursuant
to Section 1.2. Each such invoice shall (A) provide sufficient detail to
identify each Service, the fee therefor and the method of calculating such
fee, (B) identify all third party costs included in the invoice to the
extent specifically billed and (C) include such other data as may be
reasonably requested by Book or Entertainment. In addition, Book and
Entertainment shall have the right to examine any and all books and records
as they reasonably request in order to confirm and verify the calculation
of the amount of any payment pursuant to this Section and Micro shall
cooperate in any reasonable manner in such examination as Book or
Entertainment shall request.
(b) Payment (including payment of any amounts disputed pursuant to
Section 1.3(c)) of each invoice shall
III-2
be due from Book and Entertainment on the day (or the next business day, if
such day is not a business day) that is the later of (i) the third day
prior to the end of the accounting month in which such invoice was received
and (ii) the tenth day after the receipt of such invoice (each, a "PAYMENT
DATE"), by wire transfer of immediately available funds payable to the
order of Micro. If either Book or Entertainment fails to make any payment
within 30 days of the relevant Payment Date, the party that has failed to
make such payment shall be obligated to pay, in addition to the amount due
on such Payment Date, interest on such amount at the prime, or best rate
announced by Nationsbank of Texas, N.A. per annum compounded annually from
the relevant Payment Date through the date of payment.
(c) In the event that Book or Entertainment disputes any
charges invoiced by Micro pursuant to this Agreement, Book or Entertainment
shall deliver a written statement describing the dispute to Micro within 15
days following receipt of the disputed invoice. The statement shall
provide a sufficiently detailed description of the disputed items. The
parties hereto shall use their best efforts to resolve any such disputes.
Amounts not so disputed shall be deemed accepted. Disputed amounts
resolved in favor of Book or Entertainment (together with interest on such
amounts at the prime, or best rate announced by Nationsbank of Texas, N.A.
per annum compounded annually from the date such disputed amounts were paid
to Micro to the next relevant Payment Date) shall be credited against
payments owing by Book and Entertainment, respectively, to Micro on the
next relevant Payment Date.
(d) Unless otherwise specified on the Schedules hereto, in the
event that the actual utilization of a Service is less than the period
specified on such Schedules with respect to such Service, then the Service
Fees for such Service shall be prorated on the basis of actual utilization
of such Service; provided that the monthly charges shall not be prorated on
any period of time less than one day, the per diem charge shall not be
prorated on any period of time less than one-half day, and the hourly
charges shall not be prorated on any period of time less than one hour.
SECTION 1.4. TERM. The term of this Agreement shall
commence on the date hereof and shall end on July 31, 1999, unless earlier
terminated pursuant to the terms hereof. The provisions of Section 1.2
(with respect to amounts accrued prior to such termination) shall survive
any termination of this Agreement.
III-3
SECTION 1.5. LIMITED WARRANTY. Micro will provide the
Services hereunder in good faith, with the care and diligence that it
exercises in the performance of such services for its divisions and
Subsidiaries. Each of Book and Entertainment hereby acknowledges that
Micro does not regularly provide to third parties services such as the
Services as part of its business and that, except as set forth in Section
1.1 or in this Section 1.5, Micro does not otherwise warrant or assume any
responsibility for its Services. The warranty stated above is in lieu of
and exclusive of all other representations and warranties of any kind
whatsoever. EXCEPT AS STATED ABOVE, THERE ARE NO WARRANTIES RELATING TO
THE SERVICES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
SECTION 1.6. PERFORMANCE REMEDY. In the event that Micro
fails to provide a Service hereunder, or the quality of a Service is not in
accordance with Section 1.1 or Section 1.5, Book or Entertainment may give
Micro prompt written notice thereof. Micro will then have thirty days to
cure the defective Service. If after such period Micro has failed to cure
the defective Service, Book or Entertainment, as the case may be, may seek
an alternative provider for such Service and Micro shall discontinue
performing such Service at the written request of Book or Entertainment,
respectively. Neither Book nor Entertainment shall be liable to Micro for
any Service performed by Micro after Micro has been given written notice of
termination of such Service pursuant to this Section 1.6, except for any
out-of-pocket costs incurred by Micro in connection with the cessation of
such Services or the transfer of such Services back to Book, Entertainment
or their respective designees. Except as otherwise expressly provided in
Article 2, the provisions of this Section 1.6 will provide the exclusive
remedy for any misrepresentation, breach of warranty, covenant or other
agreement or other claim arising out of this Agreement or the Services to
be performed hereunder.
III-4
ARTICLE 2
INDEMNIFICATION
SECTION 2.1. LIMITATION OF LIABILITY. Book and Entertainment
agree that none of Micro, any of its Subsidiaries or any of their
respective directors, officers, agents and employees (each, an "MICRO
INDEMNIFIED PERSON") shall have any liability, whether direct or indirect,
in contract, tort or otherwise, to Book or Entertainment arising out of or
attributable to the performance or nonperformance of Services pursuant to
this Agreement.
SECTION 2.2. INDEMNIFICATION. (a) Book agrees to and does
hereby indemnify and hold each Micro Indemnified Person harmless from and
against any and all damage, loss, liability and expense (including without
limitation reasonable expenses of investigation and reasonable attorneys'
fees and expenses in connection with any action, claim, suit or proceeding,
including any expenses incurred in connection with the enforcement of the
rights of such Micro Indemnified Person pursuant to this Agreement) to
which such Micro Indemnified Person may be subjected as a result of a claim
made by a third party arising out of or attributable, directly or
indirectly, (i) to the performance or nonperformance for Book of any
Services or (ii) otherwise in connection with this Agreement.
(b) Entertainment agrees to and does hereby indemnify and hold
each Micro Indemnified Person harmless from and against any and all damage,
loss, liability and expense (including without limitation reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, claim, suit or proceeding, including any
expenses incurred in connection with the enforcement of the rights of such
Micro Indemnified Person pursuant to this Agreement) to which such Micro
Indemnified Person may be subjected as a result of a claim made by a third
party arising out of or attributable, directly or indirectly, (i) to the
performance or nonperformance for Entertainment of any Services or (ii)
otherwise in connection with this Agreement.
(c) The parties agree to follow the procedures set forth in
Section 5.3(a) and 5.3(b) of the Reorganization Agreement dated as of
September 4, 1996 among the parties hereto with respect to any claim for
indemnification made pursuant to this Section 2.2.
SECTION 2.3. OWNERSHIP OF WORK PRODUCT. (a) Except for the
data provided by Book or Entertainment to
III-5
Micro and the reports produced by Micro for Book or Entertainment pursuant
to this Agreement, all proprietary tools and methodologies and all written
material including programs, tapes, listing and other programming
documentation which were preexisting or originated and prepared by Micro
pursuant to this Agreement shall belong to Micro except as otherwise agreed
by the parties in a separate written agreement signed by each party.
(b) No license under any trade secrets, copyrights, or other
rights is granted by this Agreement or any disclosure hereunder.
(c) Book and Entertainment shall have reasonable access to all
data, records, files, statements, records, invoices, billings, and other
information generated by or in custody of Micro relating to the Services
provided pursuant to this Agreement. Unless otherwise specified by Book or
Entertainment or required by law, Micro shall maintain all such business
records pertaining to the Services and will retain the records pertaining
to each Service for a period of twelve months after the cessation of such
Service. At the request of Book or Entertainment, Micro shall provide
copies of records pertaining to the Services.
ARTICLE 3
GENERAL PROVISIONS
SECTION 3.1. PARTIES. Nothing in this Agreement, express or
implied, is intended to confer upon any person not a party any rights and
remedies hereunder.
SECTION 3.2. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of Tennessee,
without regard to its conflict of laws provisions.
SECTION 3.3. HEADINGS. The Section and other headings
contained in this Agreement are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.
SECTION 3.4. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement among the parties in respect of the subject matter
contained herein and neither this Agreement nor any term or provision
hereof may be amended or waived except by an instrument in writing signed,
in the case of an amendment, by each party and, in the case
III-6
of a waiver, by the party against whom the waiver is to be effective.
SECTION 3.5. ASSIGNMENTS. This Agreement shall not be
assignable by any party without the written consent of the other parties
hereto. No assignment of any right or benefit hereunder shall relieve any
obligation of the assignor hereunder without the written consent of the
other parties.
SECTION 3.6. NOTICES. Any notice, request, instruction or
other document to be given hereunder by any party hereto to another party
hereto shall be in writing (including telecopier or similar writing) and
shall be given to such party at its address set forth on the signature
pages hereof, or to such other address as the party to whom notice is to be
given may provide in a written notice to the party giving such notice, a
copy of which written notice shall be on file with the Secretary of Micro.
Each such notice, request or other communication shall be effective (i) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified on the signature pages hereof and the appropriate confirmation is
received, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid addressed as
aforesaid or (iii) if given by any other means, when delivered at the
address specified in this Section 3.6.
SECTION 3.7. DEFINITIONS. Terms used but not defined herein
shall have the meanings set forth in the Reorganization Agreement dated as
of September 4, 1996 among the parties hereto.
SECTION 3.8. SEVERABILITY. The invalidity or unenforceability
of any provisions of this Agreement in any jurisdiction shall not affect
the validity, legality or enforceability of the remainder of this Agreement
in such jurisdiction or the validity, legality or enforceability of this
Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder
shall be enforceable to the fullest extent permitted by law.
SECTION 3.9. INDEPENDENT CONTRACTORS. The parties hereto are
independent contractors. Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, agency, franchise or joint venture
relationship among the parties. No party shall incur any debts or make any
commitments for the others, except to the extent, if at all, specifically
provided herein.
III-7
SECTION 3.10. REMEDIES. The parties hereby acknowledge and
agree that in the event of any breach of this Agreement, the parties would
be irreparably harmed and could not be made whole by monetary damages.
Each party hereto agrees (i) not to assert by way of defense or otherwise
that a remedy at law would be adequate, and (ii) in addition to any other
remedy to which the parties may be entitled, that the remedy of specific
performance of this Agreement is appropriate in any action in court.
SECTION 3.11. CONSENT TO JURISDICTION. Each party hereto
irrevocably submits to the non-exclusive jurisdiction of any Tennessee
State Court or United States Federal Court sitting in the Middle District
of Tennessee over any suit, action or proceeding arising out of or relating
to this Agreement. Each party hereto waives any right it may have to
assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this Section 3.11.
Nothing in this paragraph shall affect or limit any right to serve process
in any manner permitted by law, to bring proceedings in the courts of any
jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
SECTION 3.12. COUNTERPARTS. This Agreement may be executed 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.
III-8
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
INGRAM MICRO INC.
By: /s/ Jeffrey R. Rodek
---------------------------------------
Name: Jeffrey R. Rodek
Title: President
1600 East Saint Andrew Place
Santa Ana, CA 92705
Telecopy: (714) 566-7900
INGRAM BOOK COMPANY, A
DIVISION OF INGRAM INDUSTRIES
INC.
By: /s/ John R. Ingram
---------------------------------------
Name: John R. Ingram
Title: Co-President
One Belle Meade Place
4400 Harding Road
Nashville, TN 32705
Telecopy: (615) 298-8242
INGRAM ENTERTAINMENT INC.
By: /s/ David B. Ingram
---------------------------------------
Name: David B. Ingram
Title: Chairman & President
Two Ingram Boulevard
La Vergne, TN 37086
Telecopy: (615) 287-4985
III-9
EXHIBIT 10.21
AMENDED AND RESTATED EXCHANGE AGREEMENT
among
INGRAM INDUSTRIES INC.,
INGRAM MICRO INC.,
INGRAM ENTERTAINMENT INC.,
AND
THE PERSONS IDENTIFIED
ON THE SIGNATURE PAGES HEREOF
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions.................................. 1
ARTICLE 2
EXCHANGE
SECTION 2.1. Exchange by Holders.......................... 3
SECTION 2.2. The First Closing............................ 4
SECTION 2.3. The Second Closing........................... 6
SECTION 2.4. Other Holders................................ 6
SECTION 2.5. Exercising Optionholders..................... 6
SECTION 2.6. Acknowledgement and Release.................. 7
SECTION 2.7. Surrender of Existing Certificates........... 8
SECTION 2.8. Certain Representations and
Warranties.................................. 8
SECTION 2.9. Legend....................................... 9
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF EACH HOLDER
SECTION 3.1. Private Placement............................ 9
SECTION 3.2. Ownership.................................... 10
SECTION 3.3. Tax Matters.................................. 10
SECTION 3.4. Community Property........................... 11
SECTION 3.5. Representation of the Thrift Plan............ 11
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF EACH PARTY
SECTION 4.1. Authority; No Other Action................... 11
SECTION 4.2. Binding Effect............................... 12
ARTICLE 5A
CONDITIONS TO FIRST CLOSING
SECTION 5A.1. Conditions to Obligations of the
Parties.................................... 12
SECTION 5A.2. Conditions to Obligation of the Ingram
Companies.................................. 13
SECTION 5A.3. Conditions to Obligation of the
Holders.................................... 14
SECTION 5A.4. Conditions to Obligation of Certain
Stockholders............................... 15
SECTION 5A.5. Conditions to Obligation of the Thrift
Plan....................................... 15
ARTICLE 5B
CONDITIONS TO SECOND CLOSING
SECTION 5B.1. Conditions to Obligations of the
Parties.................................... 16
SECTION 5B.2. Conditions to Obligation of Industries and
Entertainment.............................. 16
SECTION 5B.3. Conditions to Obligation of Certain
Holders.................................... 17
SECTION 5B.4. Conditions to Obligation of David B.
Ingram..................................... 18
ARTICLE 6
CERTAIN AGREEMENTS; TAX MATTERS
SECTION 6.1. Tax Representation of the Holders............ 18
SECTION 6.2. Tax Representation of the Ingram
Companies.................................. 18
SECTION 6.3. Tax Covenant................................. 19
SECTION 6.4. Agreements of Investment Manager............. 19
SECTION 6.5. True-Up...................................... 20
SECTION 6.6. Termination of Stock Purchase Agreement
Obligations................................ 22
SECTION 6.7. Cooperation.................................. 22
SECTION 6.8. Issuance of Entertainment Common
Stock...................................... 22
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Headings..................................... 22
SECTION 7.2. Entire Agreement............................. 23
SECTION 7.3. Notices...................................... 23
SECTION 7.4. Applicable Law............................... 23
SECTION 7.5. Severability................................. 23
SECTION 7.6. Termination.................................. 24
SECTION 7.7. Successors, Assigns, Transferees............. 24
SECTION 7.8. Amendments; Waivers.......................... 24
SECTION 7.9. Counterparts................................. 26
SECTION 7.10. Remedies..................................... 26
SECTION 7.11. Consent to Jurisdiction...................... 26
SECTION 7.12. Expenses..................................... 26
Exhibit A - Form of Transfer Restrictions Agreement
Exhibit B - Form of Registration Rights Agreement
Exhibit C - Form of Board Representation Agreement
Exhibit D - Form of Amended and Restated Stock Option, SAR/ISU
Conversion and Exchange Agreement
Exhibit E - Form of Certificate of Incorporation of Micro
Exhibit F - Form of Bylaws of Micro
Exhibit G - Form of Thrift Plan Liquidity Agreement
Annex I - Industries stockholders and optionholders as of
12/31/95
Annex II - Family Stockholders
AMENDED AND RESTATED EXCHANGE AGREEMENT
AGREEMENT dated as of September 4, 1996, as amended and
restated as of October 17, 1996, among Ingram Industries Inc., a Tennessee
corporation ("Industries"), Ingram Micro Inc., a Delaware corporation
("Micro"), Ingram Entertainment Inc., a Tennessee corporation ("Entertainment"
and, together with Industries and Micro, the "Ingram Companies"), and each
Person listed on the signature pages hereof.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. (a) The following terms, as
used herein, have the following meanings:
"Board Representation Agreement" means the Board Representation
Agreement substantially in the form attached as Exhibit C hereto.
"Entertainment Common Stock" means shares of common stock,
without par value, of Entertainment.
"Exchange" means the exchange of Industries Common Stock
pursuant to Article 2.
"Exchange Securities" means the shares of Industries Common
Stock to be exchanged pursuant to Article 2.
"Family Stockholders" means the Family Stockholders set forth
on Annex II hereto.
"First Closing" means the closing of the transactions
contemplated by Section 2.2.
"Group" means any Stockholder Group, which includes the Micro
Group, the Entertainment Group, the Industries Group, the Family Group, and
the Industries Optionholder Group, in each case as indicated on Annex I
hereto.
"Holder" means each Person listed on the signature pages hereof
(other than any Ingram Company), each Person who becomes a party to this
Agreement pursuant to Section 2.4 or 2.5, or all of them, as the context
requires; provided that any Person who withdraws from this Agreement pursuant
to Section 7.8(d) shall cease to be a Holder effective on the date of such
withdrawal.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Industries Common Stock" means shares of Class A common stock
and Class B common stock, without par value, of Industries.
"Investment Manager" means State Street Bank and Trust Company,
in its capacity as investment manager with respect to the Thrift Plan.
"Micro Common Stock" means shares of Class B common stock, par
value $0.01 per share, of Micro.
"Person" means an individual, corporation, partnership, limited
liability company, trust, association or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"QTIP" means the E. Bronson Ingram Qtip Marital Trust.
"Related Agreements" means the Transfer Restrictions Agreement
substantially in the form attached as Exhibit A hereto, the Registration
Rights Agreement substantially in the form attached as Exhibit B hereto, the
Amended and Restated Stock Option, SAR and ISU Conversion and Exchange
Agreement substantially in the form attached as Exhibit D hereto and the
Thrift Plan Liquidity Agreement.
"Reorganization Agreement" means the Amended and Restated
Reorganization Agreement dated as of September 4, 1996, as amended and
restated as of October 17, 1996, among Industries, Micro and Entertainment.
"Second Closing" means the closing of the transactions
contemplated by Section 2.3.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means, (i) with respect to Entertainment or Micro,
any entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are directly or indirectly owned by such Person
immediately after the First Closing and (ii) with respect to Industries, any
entity (other than Entertainment or its Subsidiaries) of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are
directly or indirectly owned by Industries immediately after the First Closing.
"Thrift Plan" means the Ingram Thrift Plan.
"Thrift Plan Liquidity Agreement" means the Thrift Plan
Liquidity Agreement substantially in the form attached as Exhibit G hereto.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
---- -------
Adjustment Amount 6.5
Affected Group 7.8
Charitable Trusts and
Foundation 7.8
Claims 2.6
Entertainment Tax Ruling 5B.2
Exercising Optionholder 2.5
First Closing Date 2.2
HLH&Z 5.5
Holder's Fraction 2.1
Initial Adjustment Period 6.5
Micro Tax Ruling 5A.2
Offer Period 2.4
Option Record Date 2.5
Other Holder 2.4
Required Holders 7.8
Second Closing Date 2.3
Unexchanged Shares 2.1
ARTICLE 2
EXCHANGE
SECTION 2.1. Exchange by Holders. On the terms and
subject to the conditions set forth herein, each Holder who is a member of the
Stockholder Groups hereby agrees to exchange the number of shares of
Industries Common Stock set forth opposite the name of such Holder under the
heading "III Common Stock To Be Exchanged" on Annex I; provided that the
number of shares of Industries Common Stock to be exchanged for shares of
Micro Common Stock by each Holder that is a member of the Family Group shall
be increased by an amount equal to the product of
(a) the sum (the "Unexchanged Shares") of (x) the product of
of .7599 and the aggregate number of shares of Industries Common Stock set
forth under the heading "III Common Stock Owned" on Annex I opposite the
name of each Holder that is a member of the Industries Group identified
under such heading who does not elect to participate in the Exchange
pursuant to Section 2.4; and (y) the product of .7284 and the aggregate
number of shares of Industries Common Stock acquired upon exercise after
December 31, 1995 of options held as of December 31, 1995 as set forth
under the heading "III Common Stock Owned" on Annex I opposite the name of
each Holder that is a member of the Industries Optionholder Group who does
not elect to participate in the Exchange pursuant to Section 2.4; and
(b) a fraction (the "Holder's Fraction"), the numerator of
which shall equal the number of shares of Industries Common Stock set forth
opposite the name of such Holder that is a member of the Family Group under the
heading "III Common Stock Owned" on Annex I and the denominator of which shall
equal the total number of shares of Industries Common Stock set forth opposite
the name of all Holders that are members of the Family Group under the heading
"III Common Stock Owned" on Annex I.
Except as otherwise determined by the Board of Directors of
Industries, if the Exchange Securities of any Holder constitute less than 100%
of such Holder's Industries Common Stock, the Exchange Securities of such
Holder shall, to the extent practicable, consist of 90% of Class B common
stock of Industries and 10% of Class A common stock of Industries.
SECTION 2.2. The First Closing. (a) The First Closing
shall take place at the executive offices of Industries in Nashville,
Tennessee or at such other place, and at such time, as the Ingram Companies
may agree following satisfaction or waiver of the conditions set forth in
Article 5A. The date and time of such closing are referred to herein as the
"First Closing Date". The First Closing shall take place in two phases as
specified below.
(b) In the first phase, the following actions shall take
place simultaneously:
(i) the Thrift Plan, pursuant to the written instructions of
the Investment Manager, shall deliver to Industries (x) certificates
representing the Exchange Securities of the Thrift Plan, duly endorsed
in blank or accompanied by a duly executed stock power and (y)
executed counterpart signature pages to each Related Agreement; and
(ii) Industries shall deliver to the Thrift Plan certificates
representing the number of shares of Micro Common Stock, rounded up
to the nearest whole share, which the Thrift Plan is entitled to
receive as set forth opposite the name of the Thrift Plan on Annex I
thereto.
(c) Immediately following the first phase, the following
actions shall take place simultaneously in the second phase:
(i) The Exchange Securities to be exchanged pursuant to
Section 2.2(c)(ii) and the other related documents tendered pursuant
to Section 2.7 shall be released from escrow to Industries;
(ii) Industries shall deliver to each Holder (other than the
Thrift Plan), certificates representing the number of shares of Micro
Common Stock which such Holder is entitled to receive as set forth
opposite the name of such Holder on Annex I, rounded up to the
nearest whole share, plus with respect to each Holder that is a
member of the Family Group, the number of shares of Micro Common
Stock, rounded up to the nearest whole share, represented by the
product of (A) such Holder's Fraction and (B) the product of 1.3729
and the Unexchanged Shares; and
(iii) Industries shall deliver to Micro for cancellation all of
the shares of Micro Common Stock that have not been delivered to the
Thrift Plan pursuant to Section 2.2(b) or to the Holders pursuant to
Section 2.2(c).
(d) If pursuant to Section 2.7 any Holder (other than a
Holder that is a member of the Entertainment Group) has delivered to
Industries certificates representing a greater number of shares of Industries
Common Stock than the number of Exchange Securities of such Holder, at the
First Closing, Industries shall deliver to such Holder a new certificate
representing the number of shares (if any) of the class of Industries Common
Stock, rounded up to the nearest whole share, to be retained by such Holder
immediately following the Exchange.
SECTION 2.3. The Second Closing. The Second Closing shall
take place at the executive offices of Industries in Nashville, Tennessee or
at such other place, and at such time, as Industries and Entertainment may
agree following satisfaction or waiver of the conditions set forth in Article
5B. The date and time of closing are referred to herein as the "Second
Closing Date". At the Second Closing:
(i) The Exchange Securities to be exchanged pursuant to
Section 2.3(ii) and the other related documents tendered pursuant to
Section 2.7 shall be released from escrow to Industries;
(ii) Industries shall deliver to each Holder identified on
Annex I hereto as being a member of the Entertainment Group,
certificates representing the number of shares of Entertainment
Common Stock, rounded up to the nearest whole share, which such
Holder is entitled to receive as set forth opposite the name of such
Holder on Annex I hereto; and
(iii) Industries shall deliver to Entertainment for
cancellation all of the shares of Entertainment Common Stock that
have not been delivered to the Holders pursuant to Section 2.3(ii).
SECTION 2.4. Other Holders. Within 15 days following
September 4, 1996, Industries shall offer each stockholder of Industries set
forth on Annex I that has not signed this Agreement on September 4, 1996
(each, an "Other Holder") the opportunity to participate in the Exchange by
exchanging the Exchange Securities of such Person on the terms and conditions
set forth on Annex I. Each Other Holder may elect to participate in the
Exchange by delivering to Industries no later than 20 business days following
the date on which the offer is made or such later date as Industries may
specify in its sole discretion following September 4, 1996 (the "Offer
Period"), an executed counterpart signature page to this Agreement and the
documents referred to in Section 2.7. Upon execution and delivery thereof to
Industries, such Other Holder shall become a party to this Agreement effective
as of September 4, 1996 and shall be bound by all of the provisions hereof.
SECTION 2.5. Exercising Optionholders. Industries shall
offer each Person listed on Annex I as being a member of the Entertainment
Group who acquires shares of Industries Common Stock upon exercise of stock
options after the First Closing Date and prior to a date (the "Option Record
Date") fixed by the board of directors of Industries, which date shall not be
more than 30 business days prior to the Second Closing Date (an "Exercising
Optionholder"), the opportunity to exchange such shares of Industries Common
Stock on the terms and conditions set forth in Sections 2.1 and 2.3 for shares
of Entertainment Common Stock. Industries shall deliver notice of the Option
Record Date promptly following determination thereof to each such Person
holding stock options that will be exercisable prior to such Option Record
Date. Each Exercising Optionholder may elect to participate in the Exchange by
delivering to Industries, no later than 20 business days following the Option
Record Date, an executed counterpart signature page to this Agreement and the
documents referred to in Section 2.7. Upon execution and delivery thereof to
Industries, such Exercising Optionholder shall become a party to this
Agreement effective as of September 4, 1996 and shall be bound by all of the
provisions hereof.
SECTION 2.6. Acknowledgement and Release. (a) Each
Holder hereby agrees that, as of September 4, 1996, the fair value of the
securities to be received by such Holder in the Exchange is equal to the fair
value of such Holder's Exchange Securities. Each Holder hereby acknowledges
that an initial public offering of Micro Common Stock is contemplated, but no
assurance can be given as to whether such public offering will be consummated
or as to the market value of the Micro securities to be sold in such public
offering or whether a market for such securities will develop or be maintained.
(b) In consideration of the Exchange and effective at the
First Closing (in the case of each Holder, with respect to Exchange Securities
of such Holder that are exchanged at the First Closing) and at the Second
Closing (in the case of each Holder that is a member of the Entertainment
Group, with respect to Exchange Securities of such Holder that are exchanged
at the Second Closing), each Holder hereby unconditionally and irrevocably
releases and discharges each Ingram Company and each other Person directly or
indirectly controlling, controlled by, or under common control with, such
Ingram Company and any and all directors, officers and shareholders of any of
the foregoing, of any claim, obligation or liability, in law or in equity,
that such Holder had in the past, now has or hereafter shall or may have for,
upon or by reason of any event, matter or thing which has occurred from the
beginning of the world to the First Closing Date or the Second Closing Date,
respectively (the "Claims"), arising out of or relating to such Holder's
ownership of Industries Common Stock, including without limitation (i) Claims
alleging that such Holder has a right to receive additional or different
consideration in the Exchange and (ii) Claims against directors of any Ingram
Company alleging a breach of fiduciary duty of such directors arising in
connection with the transactions contemplated hereby or by the Board
Representation Agreement, the Related Agreements, the Reorganization Agreement
or the Ancillary Agreements (as defined in the Reorganization Agreement) or
any other agreement referred to herein or therein, except that no Holder shall
agree hereby to waive any such Claim to the extent that any such director was
not acting in good faith.
SECTION 2.7. Surrender of Existing Certificates. (a)
Except as otherwise provided in Section 2.7(b), concurrently with the
execution by each Holder (other than the Thrift Plan) of this Agreement, such
Holder will deliver to Industries in escrow pending the consummation of the
First Closing or the Second Closing, as applicable, executed counterpart
signature pages to each Related Agreement and all certificates representing
the Exchange Securities owned by such Holder. Each certificate representing
such Exchange Securities shall be duly endorsed in blank or accompanied by a
duly executed stock power. Each Holder that is an Exercising Optionholder
also will deliver to Industries in escrow pending the consummation of the
Second Closing executed counterpart signature pages to an agreement pursuant
to which such Holder would be subject to certain restrictions on the ability
of such Holder to transfer shares of Entertainment Common Stock to be received
by such Holder in the Exchange (which restrictions will be similar to the
restrictions applicable to the Exchange Securities of Holder immediately prior
to the Second Closing).
(b) Notwithstanding anything to the contrary in Section
2.7(a), (i) no later than two days prior to the First Closing Date, each of
the Family Stockholders, the QTIP and the Charitable Trusts and Foundation
will deliver to Industries in escrow pending consummation of the First Closing
all certificates representing the Exchange Securities owned by such Holder,
duly endorsed in blank or accompanied by a duly executed stock power, and (ii)
all certificates representing Exchange Securities which are currently pledged
to Nationsbank, N.A., Nationsbank of Tennessee, N.A. or First American
National Bank shall be delivered by the pledgee to Industries at the First
Closing (or, in the case of Exchange Securities to be exchanged at the Second
Closing pursuant to Section 2.3, at the Second Closing), duly endorsed as
described above.
(c) Certificates representing Exchange Securities held in
escrow pursuant to this Section 2.7 shall promptly be returned to the Holder
thereof upon any termination of this Agreement pursuant to Section 7.6.
SECTION 2.8. Certain Representations and Warranties.
Micro represents and warrants to each Holder as of September 4, 1996 and as of
the First Closing Date that the shares of Micro Common Stock to be delivered
pursuant to Section 2.2 are validly issued, fully paid and non-assessable.
Entertainment represents and warrants to each Holder as of September 4, 1996
and as of the Second Closing Date that the shares of Entertainment Common
Stock to be delivered pursuant to Section 2.3 are validly issued, fully paid
and non-assessable.
SECTION 2.9. Legend. Each certificate representing a
share of Micro Common Stock or Entertainment Common Stock to be acquired
pursuant to this Agreement shall (except as provided below) include any
legends required pursuant to applicable securities laws and a legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE OR FOREIGN SECURITIES LAWS
AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH.
Any Holder or transferee of a share of Micro Common Stock or Entertainment
Common Stock may, upon providing evidence (including without limitation an
opinion of counsel) reasonably satisfactory to Micro or Entertainment,
respectively, that such share either is not a "restricted security" (as
defined in Rule 144 promulgated under the Securities Act) or may be sold
pursuant to Rule 144(k) promulgated under the Securities Act, exchange the
certificate representing such share for a new certificate that does not bear
such legend.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF EACH HOLDER
Each Holder hereby represents and warrants to each Ingram
Company as of September 4, 1996, as of October 17, 1996, as of the First
Closing Date and, in the case of any Holder that is a member of the
Entertainment Group, as of the Second Closing Date, as follows:
SECTION 3.1. Private Placement. (a) Such Holder
understands that (i) the Exchange and the delivery of securities in the
Exchange as contemplated hereby is intended to be exempt from registration
under the Securities Act pursuant to Section 4(2) of the Securities Act and
(ii) there is no existing public or other market for such securities and,
except as otherwise provided in the Related Agreements, there can be no
assurance that such Holder will be able to sell or dispose of the securities
delivered to such Holder pursuant to the terms hereof.
(b) The securities to be acquired by such Holder pursuant to
this Agreement are being acquired for its own account for investment and
without a view to the public distribution of such securities or any interest
therein.
(c) Unless Industries has been notified in writing to the
contrary prior to September 4, 1996, such Holder is an "Accredited Investor"
as such term is defined in Regulation D promulgated under the Securities Act.
(d) Such Holder has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits
and risks of its investment in the securities to be acquired by such Holder
pursuant to this Agreement and such Holder is capable of bearing the economic
risks of such investment, including a complete loss of its investment in such
securities, since such securities may not be transferred except as provided in
the Related Agreements.
(e) Such Holder has been given the opportunity to ask
questions of, and receive answers from the Ingram Companies concerning the
Ingram Companies, the securities to be acquired by such Holder pursuant to
this Agreement, the transactions contemplated hereby and by the Reorganization
Agreement and other related matters. Such Holder further represents and
warrants to each Ingram Company that such Ingram Company has made available to
such Holder or its agents all documents and information relating to an
investment in such securities requested by or on behalf of such Holder. In
evaluating the suitability of an investment in such securities, such Holder
has not relied upon any other representations or other information (whether
oral or written) made by or on behalf of any Ingram Company.
(f) Such Holder understands that (i) the securities to be
acquired by such Holder pursuant to this Agreement may not be transferred
except in compliance with the provisions of the Related Agreements and (ii)
such securities will bear a legend to such effect.
SECTION 3.2. Ownership. Except as set forth on Schedule
3.2, such Holder is the record and beneficial owner of the Exchange Securities
of such Holder. Except as set forth on Schedule 3.2, such Exchange Securities
are and, as of the First Closing (and, if such Holder is a member of the
Entertainment Group, as of the Second Closing) will be, free and clear of any
lien, pledge, charge, security interest or encumbrance of any kind and any
other limitation or restriction (including without limitation any restriction
on the right to vote, sell or otherwise dispose of such Exchange Securities).
SECTION 3.3. Tax Matters. There is no plan or intention
by such Holder to sell, exchange, transfer by gift or otherwise dispose of any
of such Holder's stock in any of the Ingram Companies subsequent to the
Exchange.
SECTION 3.4. Community Property. If such Holder's
Exchange Securities constitute community property, this Agreement has been
executed and delivered by such Holder's spouse, who shall be bound hereby, and
the representations and warranties contained in Article 3 (other than the
first sentence of Section 3.2), Article 4 and Section 6.2 are true and correct
as to such spouse.
SECTION 3.5. Representation of the Thrift Plan. If such
Holder is the Thrift Plan, the Investment Manager has made the determination
as of September 4, 1996 that the exchange of the Thrift Plan's shares of
Industries Common Stock for Micro Common Stock is prudent and in the best
interest of the Thrift Plan participants and beneficiaries.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF EACH PARTY
Each party hereto hereby represents and warrants to each other
party hereto as of September 4, 1996, as of October 17, 1996, as of the First
Closing Date and, in the case of Entertainment, Industries and each Holder
that is a member of the Entertainment Group, as of the Second Closing Date, as
follows:
SECTION 4.1. Authority; No Other Action. (a) Such
Person, if an individual, has the legal capacity to enter into this Agreement
and each Related Agreement. If such Person is not an individual, the
execution, delivery and performance by such Person of this Agreement and each
Related Agreement are within such Person's powers and have been duly
authorized on its part by all requisite action.
(b) No action by or in respect of, or filing with, any
governmental authority, agency or official is required for the execution,
delivery and performance by such Person of this Agreement and each Related
Agreement, other than compliance with any applicable requirements of the HSR
Act. The execution, delivery and performance by such Person of this Agreement
and each Related Agreement do not (i) contravene or conflict with or
constitute a violation of any provision of any existing law, regulation,
judgment, injunction, order or decree binding upon or applicable to such
Person or (ii) after giving effect to the actions to be taken in connection
with the First Closing and, if applicable, the Second Closing, require any
further consent, approval or other action by any other Person or constitute a
default under any provision of any material agreement, contract, indenture,
lease or other instrument binding upon such Person or any material license,
franchise, permit or other similar authorization held by such Person which
would have a material adverse effect on the business, financial condition or
prospects of any such Person.
SECTION 4.2. Binding Effect. This Agreement has been duly
executed by such Person and constitutes, and, when executed and delivered,
each Related Agreement shall constitute, a valid and binding agreement of such
Person.
ARTICLE 5A
CONDITIONS TO FIRST CLOSING
SECTION 5A.1. Conditions to Obligations of the Parties.
The obligations of each party to consummate the First Closing are subject to
the satisfaction of the following conditions:
(i) any applicable waiting period under the HSR Act
relating to the consummation of the First Closing and the
transactions contemplated by the Reorganization Agreement and the
other agreements referred to herein or therein shall have expired or
been terminated;
(ii) no provision of any applicable law or regulation and
no judgment, injunction, order or decree shall prohibit the
consummation of the First Closing or the transactions contemplated by
the Reorganization Agreement and the other agreements referred to
herein or therein;
(iii) all actions by or in respect of or filings with any
governmental body, agency, official or authority required to permit
the consummation of the First Closing and the transactions
contemplated by the Reorganization Agreement and the other agreements
referred to herein or therein shall have been taken, made or obtained;
(iv) the Related Agreements, the Board Representation
Agreement, the Reorganization Agreement and the Ancillary Agreements
(as defined in the Reorganization Agreement) shall have been executed
and delivered by each of the parties thereto and shall be in full
force and effect; and
(v) the certificate of incorporation and bylaws of Micro
shall be substantially in the forms attached as Exhibits E and F,
respectively.
SECTION 5A.2. Conditions to Obligation of the Ingram
Companies. The obligation of each Ingram Company to consummate the First
Closing is subject to the satisfaction of the following further conditions:
(i) (A) each Holder shall have performed in all material
respects all of its obligations under this Agreement and any other
agreement, certificate or other writing delivered in connection
herewith required to be performed by it on or prior to the First
Closing Date and (B) the representations and warranties of each
Holder contained in this Agreement and in any other agreement,
certificate or other writing delivered in connection herewith shall
be true at and as of the First Closing Date, as if made at and as of
such date;
(ii) (A) a ruling (the "Micro Tax Ruling") with respect to the
federal income tax consequences of the transactions contemplated by
Section 2.2 and by the Reorganization Agreement and the other
agreements referred to herein and therein in form and substance
reasonably satisfactory to Industries (and which may be in the same
ruling as the Entertainment Tax Ruling) shall have been received and
shall not have been revoked and (B) nothing shall have come to the
attention of the Board of Directors of Industries that causes them to
conclude, after consideration of advice of tax counsel and all other
facts and circumstances that they deem appropriate, that significant
questions exist as to the validity of the Micro Tax Ruling as applied
to the transactions contemplated hereby and by the Reorganization
Agreement and the other agreements referred to herein and therein;
(iii) each Ingram Company shall have received an opinion of
McDermott, Will & Emery, counsel to the Investment Manager, dated the
date of the First Closing, to the effect that the transactions
contemplated to be entered into by the Thrift Plan at the First
Closing and the consummation thereof will not constitute prohibited
transactions under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Internal
Revenue Code of 1986, as amended;
(iv) all third party non-governmental consents, authorizations
and approvals required in connection with the consummation of the
First Closing and the transactions contemplated by the Reorganization
Agreement and the other agreements referred to herein or therein
shall have been received, in each case in form and substance
reasonably satisfactory to Industries, and no such consent,
authorization or approval shall have been revoked;
(v) all receivables, payables and other liabilities (other
than loans made to or by any stockholder of Industries and other than
purchases and sales of goods in the ordinary course of business)
owing between Industries, Entertainment or any of their respective
Subsidiaries, on the one hand, and Micro or any of its Subsidiaries,
on the other hand, shall have been settled and repaid;
(vi) agreements relating to the transactions referred to on
Schedule 5A.2(vi) shall have been executed and delivered by the
parties thereto and shall be in full force and effect, and the
conditions to closing of each such agreement shall have been
satisfied;
(vii) the Offer Period referred to in Section 2.4 shall have
expired; and
(viii) the exchanges and conversions contemplated to occur on
or prior to the First Closing by the Amended and Restated Stock
Option, SAR and ISU Conversion and Exchange Agreement substantially
in the form attached as Exhibit D hereto shall have occurred (or
shall occur concurrently with the First Closing).
SECTION 5A.3. Conditions to Obligation of the Holders. The
obligation of each Holder to consummate the First Closing is subject to the
satisfaction of the following further conditions that (i) each Ingram Company
shall have performed in all material respects all of its obligations under
this Agreement and any other agreement, certificate or other writing delivered
in connection herewith required to be performed by it at or prior to the First
Closing Date and (ii) the representations and warranties of each Ingram
Company contained in this Agreement and in any other agreement, certificate or
other writing delivered in connection herewith shall be true at and as of the
First Closing Date, as if made at and as of such date.
SECTION 5A.4. Conditions to Obligation of Certain
Stockholders. The obligation of each of the Family Stockholders and the QTIP
to consummate the First Closing is subject to the satisfaction of the further
conditions that (i) the Micro Tax Ruling, in form and substance reasonably
satisfactory to each of the Family Stockholders and the QTIP, shall have been
received and shall not have been revoked and (ii) nothing shall have come to
the attention of any Family Stockholder or the QTIP that causes them to
conclude, after consideration of advice of tax counsel and all other facts and
circumstances that they deem appropriate, that significant questions exist as
to the validity of the Micro Tax Ruling as applied to the transactions
contemplated hereby and by the Reorganization Agreement and the other
agreements referred to herein and therein.
SECTION 5A.5. Conditions to Obligation of the Thrift Plan.
The obligation of the Thrift Plan to consummate the First Closing is subject
to the satisfaction of the following further conditions:
(i) the Thrift Plan shall have received an opinion dated the
date of the First Closing of McDermott, Will & Emery, counsel to the
Investment Manager, in form and substance satisfactory to the
trustees of the Thrift Plan, to the effect that the transactions to
be entered into by the Thrift Plan, at the First Closing and the
consummation thereof will not constitute prohibited transactions
under Section 406 of the Employee Retirement Income Security Act of
1974, as amended, or Section 4975 of the Internal Revenue Code of
1986, as amended;
(ii) the Investment Manager of the Thrift Plan shall have
received a written opinion from Houlihan, Lokey, Howard & Zukin
("HLH&Z") to the effect that (A) the fair market value of the shares
of Micro Common Stock to be received by the Thrift Plan pursuant to
Section 2.2 is at least equal to the fair market value of the
Exchange Securities of the Thrift Plan and (B) the terms and
conditions of the Exchange are fair and reasonable to the Thrift Plan
from a financial point of view;
(iii) the Investment Manager shall have provided the written
direction to the trustees of the Thrift Plan contemplated under
Section 2.2(b)(i); and
(iv) Nothing shall have come to the attention of the
Investment Manager that causes it to conclude that its decision to
exchange the Thrift Plan's shares of Industries Common Stock for
Micro Common Stock was not prudent or in the best interest of the
Thrift Plan participants and beneficiaries.
ARTICLE 5B
CONDITIONS TO SECOND CLOSING
SECTION 5B.1. Conditions to Obligations of the Parties.
The obligations of Industries, Entertainment and each Holder that is a member
of the Entertainment Group to consummate the Second Closing are subject to the
satisfaction of the following conditions:
(i) any applicable waiting period under the HSR Act
relating to the consummation of the Second Closing and the
transactions contemplated by the Reorganization Agreement and the
other agreements referred to herein or therein shall have expired or
been terminated;
(ii) no provision of any applicable law or regulation and
no judgment, injunction, order or decree shall prohibit the
consummation of the Second Closing or the transactions contemplated
by the Reorganization Agreement and the other agreements referred to
herein or therein; and
(iii) all actions by or in respect of or filings with any
governmental body, agency, official or authority required to permit
the consummation of the Second Closing and the transactions
contemplated by the Reorganization Agreement and the other agreements
referred to herein or therein shall have been taken, made or obtained.
SECTION 5B.2. Conditions to Obligation of Industries and
Entertainment. The obligation of Industries and Entertainment to consummate
the Second Closing is subject to the satisfaction of the following further
conditions:
(i) (A) each Holder that is a member of the Entertainment
Group shall have performed in all material respects all of its
obligations under this Agreement and any other agreement, certificate
or other writing delivered in connection herewith required to be
performed by it on or prior to the Second Closing Date and (B) the
representations and warranties of each Holder that is a member of the
Entertainment Group contained in this Agreement and in any other
agreement, certificate or other writing delivered in connection
herewith shall be true at and as of the Second Closing Date, as if
made at and as of such date;
(ii) (A) a ruling (the "Entertainment Tax Ruling") with
respect to the federal income tax consequences of the transactions
contemplated by Section 2.3 and the other agreements referred to
herein in form and substance reasonably satisfactory to Industries
(and which may be in the same ruling as the Micro Tax Ruling) shall
have been received and shall not have been revoked and (B) nothing
shall have come to the attention of the Board of Directors of
Industries that causes them to conclude, after consideration of
advice of tax counsel and all other facts and circumstances that they
deem appropriate, that significant questions exist as to the validity
of the Entertainment Tax Ruling as applied to the transactions
contemplated hereby and the other agreements referred to herein;
(iii) all third party non-governmental consents,
authorizations and approvals required in connection with the
consummation of the Second Closing and the transactions contemplated
by the Reorganization Agreement and the other agreements referred to
herein or therein shall have been received, in each case in form and
substance reasonably satisfactory to Industries, and no such consent,
authorization or approval shall have been revoked;
(iv) all receivables, payables and other liabilities (other
than loans made to or by any stockholder of Industries and other than
purchases and sales of goods in the ordinary course of business)
owing between Industries or any of its Subsidiaries, on the one hand,
and Entertainment or any of its Subsidiaries, on the other hand,
shall have been settled and repaid; and
(v) the exchanges and conversions contemplated to occur on
or prior to the Second Closing by the Amended and Restated Stock
Option, SAR and ISU Conversion and Exchange Agreement substantially
in the form attached as Exhibit D hereto shall have occurred (or
shall occur concurrently with the Second Closing).
SECTION 5B.3. Conditions to Obligation of Certain Holders.
The obligation of each Holder that is a member of the Entertainment Group to
consummate the Second Closing is subject to the satisfaction of the following
further conditions that (i) each of Industries and Entertainment shall have
performed in all material respects all of its obligations under this Agreement
and any other agreement, certificate or other writing delivered in connection
herewith required to be performed by it at or prior to the Second Closing Date
and (ii) the representations and warranties of Industries and Entertainment
contained in this Agreement and in any other agreement, certificate or other
writing delivered in connection herewith shall be true at and as of the Second
Closing Date, as if made at and as of such date.
SECTION 5B.4. Conditions to Obligation of David B. Ingram.
The obligation of David B. Ingram to consummate the Second Closing is subject
to the satisfaction of the further conditions that (i) the Entertainment Tax
Ruling, in form and substance reasonably satisfactory to David B. Ingram,
shall have been received and shall not have been revoked and (ii) nothing
shall have come to the attention of David B. Ingram that causes him to
conclude, after consideration of all other facts and circumstances that he
deems appropriate, that significant questions exist as to the validity of the
Entertainment Tax Ruling as applied to the transactions contemplated hereby
and the other agreements referred to herein.
ARTICLE 6
CERTAIN AGREEMENTS; TAX MATTERS
SECTION 6.1. Tax Representation and Covenant of the
Holders. Each Holder hereby represents and warrants to each Ingram Company as
of September 4, 1996, as of the First Closing Date and, if such Holder is a
member of the Entertainment Group, as of the Second Closing Date, that there
is no plan or intention by such Holder to sell, exchange, transfer by gift or
otherwise dispose of any of such Holder's stock in any of the Ingram Companies
subsequent to the Exchange. Each Holder that is a member of the Entertainment
Group hereby agrees not to sell, exchange, or otherwise transfer any of such
Holder's shares of Entertainment Common Stock subsequent to the Second Closing
to any entity formed for the purpose of holding all of the outstanding shares
of Entertainment Common Stock unless such Holder first obtains an opinion from
recognized tax counsel acceptable to the Ingram Companies, or a ruling from the
Internal Revenue Service, that such sale, exchange, transfer or other
disposition will not affect the qualification of the transactions contemplated
by this Agreement for tax-free treatment under Section 355 of the Internal
Revenue Code of 1986, as amended.
SECTION 6.2. Tax Representation of the Ingram Companies.
Each Ingram Company represents and warrants to each Holder as of September 4,
1996 and as of the First Closing Date that such Ingram Company has no plan or
intention to liquidate, merge or consolidate with any other Person, or to sell
or otherwise dispose of its assets other than in the ordinary course of
business following the First Closing. Each of Industries and Entertainment
further represents and warrants to each Holder as of September 4, 1996 and as
of the Second Closing Date that it has no plan or intention to liquidate,
merge or consolidate with any other Person, or to sell or otherwise dispose of
its assets other than in the ordinary course of business following the Second
Closing.
SECTION 6.3. Tax Covenant. Each Ingram Company covenants
that, during the two-year period following the First Closing (and, with
respect to Industries and Entertainment, during the two-year period following
the Second Closing), it will not, and will not enter into any agreement to,
(i) liquidate, merge or consolidate with any other Person, or sell, exchange,
distribute or otherwise dispose of any material asset other than in the
ordinary course of business; (ii) redeem or reacquire any of its capital stock
transferred pursuant to this Agreement (except for the redemption of the stock
held by an employee or by the Thrift Plan on behalf of an employee upon the
employee's termination or death in accordance with the terms of (x) an
applicable stock purchase agreement or a repurchase agreement referred to in
Section 4.4 of the Reorganization Agreement, (y) Section 2.6 or Section
2.7(a)(ii) of the Transfer Restrictions Agreement or (z) the Thrift Plan
Liquidity Agreement) or, in the case of Industries, any of the Industries
common stock outstanding as of the First Closing or the Second Closing, as the
case may be, that is not transferred pursuant to this Agreement (except for the
redemption of the stock held by an employee upon such employee's termination
or death in accordance with the terms of an applicable stock purchase
agreement or a repurchase agreement referred to in Section 4.4 of the
Reorganization Agreement); (iii) cease to conduct the principal active trade
or business conducted by it during the five years immediately preceding the
First Closing or the Second Closing, as the case may be; or (iv) otherwise
take any actions inconsistent with the facts and representations set forth in
the Tax Ruling; provided that such Ingram Company may take an action
inconsistent with any of the foregoing covenants if it first obtains an
opinion from recognized tax counsel acceptable to the other Ingram Companies,
or a ruling from the Internal Revenue Service, that such action will not
affect the qualification of the transactions contemplated by this Agreement
for tax-free treatment under Section 355 of the Internal Revenue Code of 1986,
as amended.
SECTION 6.4. Agreements of Investment Manager. (a) The
Investment Manager represents and warrants to each Holder as of September 4,
1996 that it has received written confirmation, attached hereto as Schedule
6.4, from HLH&Z that HLH&Z will deliver the opinion contemplated pursuant to
Section 5A.5(ii), provided that, immediately after the First Closing (and
without giving effect to any shares of Micro Common Stock to be issued in the
initial public offering of Micro), the Thrift Plan will own shares of Micro
Common Stock representing not less than 9.1% (as adjusted to reflect rounding
and any sale of Micro Common Stock to the Chief Executive Officer of Micro) of
all shares of Micro Common Stock outstanding at such time.
(b) The Investment Manager hereby agrees to cooperate with
the Ingram Companies and HLH&Z in connection with obtaining the opinion from
HLH&Z referred to in Section 5A.5(ii). The Investment Manager hereby further
agrees to deliver the written direction to the trustees of the Thrift Plan
referred to in Section 2.2(b)(i) and 5A.5(iii) promptly following receipt of
such HLH&Z opinion.
(c) The Investment Manager hereby agrees (i) to deliver to
the trustees of the Thrift Plan the written direction contemplated pursuant to
Section 2.2(b)(i), provided that the applicable conditions to the obligation of
the Thrift Plan set forth in Article 5A are satisfied or waived and (ii) to
direct the trustees of the Thrift Plan to enter into the Exchange Agreement on
behalf of the Thrift Plan.
SECTION 6.5. True-Up. (a) (i) Subject to Section 6.5(b),
each Ingram Company hereby agrees that, at or immediately prior to the First
Closing, the Adjustment Amount (as defined below) shall be allocated 23.01% to
Industries, 72.84% to Micro and 4.15% to Entertainment. Such allocation shall
be made through appropriate adjustments effected by way of dividends or capital
contributions to balance (A) the actual amount which each of Industries, Micro
and Entertainment and their respective Subsidiaries have contributed to the
Adjustment Amount with (B) the respective share of the Adjustment Amount to be
allocated to each of them pursuant to the foregoing sentence. As used herein,
"Adjustment Amount" shall mean the sum of (i) consolidated net income as
reported in Industries' unaudited interim financial statements for the period
(the "Initial Adjustment Period") commencing January 1, 1996 and ending (x) on
the last day of the full accounting month ended immediately prior to the First
Closing Date (if the First Closing Date occurs later than the 15th day of the
month) or (y) the last day of the second full accounting month ended prior to
the First Closing Date (if the First Closing Date occurs on or prior to the
15th day of the month) and (ii) the consolidated net income of Industries, as
projected by Industries, for the period commencing on the first day following
the end of the Initial Adjustment Period and ending on the last day of the
fiscal year, assuming for purposes of this clause (ii) that the First Closing
does not occur during such fiscal year; provided that the Adjustment Amount
shall be determined without giving effect to (a) any net income or losses
related to IMS or IPSI (each, as defined in the Reorganization Agreement), (b)
the after-tax effect of the Industries LIFO provision for such period, (c) any
accrual for expenses related to the transactions contemplated hereby, by the
Related Agreements, by the Reorganization Agreement or by the Ancillary
Agreements (as defined in the Reorganization Agreement), (d) any non-cash
charges related to Micro's stock option plans or (e) any expenses referred to
in Section 7.12 of this Agreement; provided further that the Adjustment Amount
shall be increased or decreased by such other amounts as the Ingram Companies
may agree.
(ii) Subject to Section 6.5(b), each of Industries and
Entertainment hereby agree that, at or prior to the Second Closing, the
Adjustment Amount shall be recalculated; provided that for purposes of such
recalculation, the consolidated net income of Industries for the period
commencing on the first day following the end of the Initial Adjustment Period
and ending on the last day of the fiscal year during which the First Closing
occurred shall be based on the actual net income of Industries and its
Subsidiaries and Entertainment and its Subsidiaries during such period (with
the net income of Micro and its Subsidiaries continuing to be as projected in
Section 6.5(a)). Such recalculation shall continue to assume that the First
Closing did not occur during such fiscal year. Following such recalculation,
appropriate adjustments shall be made between Industries and Entertainment in
the manner described in Section 6.5(a)(i) such that, after taking into account
any adjustments made at or immediately prior to the First Closing pursuant to
Section 6.5(a)(i), the recalculated Adjustment Amount shall (to the extent
possible) be allocated 23.01% to Industries and 4.15% to Entertainment.
(b) Notwithstanding anything herein to the contrary, the
parties agree that, in consideration of distributions to Industries previously
made by Micro and Entertainment, no costs and expenses shall be allocated to,
and no liabilities or obligations shall be assumed or borne by, Micro or
Entertainment pursuant to Section 6.5(a) or Section 7.12 of this Agreement or
pursuant to Article 3 of the Reorganization Agreement, until the aggregate of
such costs, expenses, liabilities and obligations shall exceed $20,778,000, in
the case of Micro, or $1,160,000, in the case of Entertainment, in which event
such allocation or assumption shall be made only to the extent of such excess.
To the extent that the aggregate of such costs, expenses, liabilities and
obligations is less than $20,778,000 in the case of Micro, or $1,160,000 in
the case of Entertainment, Industries shall make a payment in the amount of
such difference to Micro or Entertainment, as the case may be.
SECTION 6.6. Termination of Stock Purchase Agreement
Obligations. Industries and each Holder who is a party to a stock purchase
agreement with Industries hereby acknowledges that all obligations of the
other party to such stock purchase agreement will cease with respect to all
shares of Industries common stock of such Holder that are exchanged for shares
of Micro Common Stock or Entertainment Common Stock pursuant to this
Agreement. Such cessation shall be effective at the First Closing with
respect to shares of Industries common stock exchanged for Micro Common Stock
and at the Second Closing with respect to shares of Industries common stock
exchanged for Entertainment Common Stock.
SECTION 6.7. Cooperation. Each Holder agrees to cooperate
with Micro in connection with the initial registered public offering of shares
of Micro Common Stock. Without limiting the generality of the foregoing, each
Holder agrees to execute and deliver such documents, certificates, agreements
and other writings (including without limitation any lock-up agreement
requested by the underwriters) and to take such other actions requested by
Micro in connection with the consummation of such initial public offering.
SECTION 6.8. Issuance of Entertainment Common Stock. The
parties hereto agree that if a stock option of Industries is exercised by a
Person listed on Annex I as being a member of the Entertainment Group after
the First Closing Date and prior to the Option Record Date, Industries shall
subscribe for, and shall cause Entertainment to issue, 3.68 shares of
Entertainment Common Stock for each option to purchase one share of Industries
Common Stock that is so exercised (which aggregate number of shares of
Entertainment Common Stock issued in respect of the exercise of stock options
by any such member of the Entertainment Group shall be rounded up to the
nearest whole share). In consideration for such issuance, Industries shall
make a capital contribution to Entertainment in an amount equal to the sum of
(i) the aggregate exercise price received by Industries in connection with any
such exercise and (ii) the estimated tax benefit to be realized by Industries
as a result of any such exercise of nonqualified options.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Headings. The headings in this Agreement are
for convenience of reference only and shall not control or affect the meaning
or construction of any provision hereof.
SECTION 7.2. Entire Agreement. This Agreement, the Board
Representation Agreement, the Related Agreements, the Reorganization Agreement
and the Ancillary Agreements (as defined in the Reorganization Agreement)
constitute the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. This Agreement
and such other agreements supersede all prior agreements and understandings
between the parties hereto and thereto with respect to the subject matter
hereof and thereof.
SECTION 7.3. Notices. Any notice, request, instruction or
other document to be given hereunder by any party hereto to another party
hereto shall be in writing (including telecopier or similar writing) and shall
be given to such party at its address set forth on the signature pages hereof,
or to such other address as the party to whom notice is to be given may
provide in a written notice to the party giving such notice, a copy of which
written notice shall be on file with the Secretary of Industries. If notice
is given pursuant to this Section of a permitted successor or assign of a
party to this Agreement, then notice shall thereafter be given as set forth
above to such successor or assign of such party to this Agreement. Each such
notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
on the signature pages hereof and electronic or oral confirmation of receipt
is received, (ii) if given by mail, at the close of business on the third
business day after such communication is deposited in the mails with first
class postage prepaid addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section 7.3.
SECTION 7.4. Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Tennessee without regard to the conflicts of law rules of such state.
SECTION 7.5. Severability. The invalidity or
unenforceability of any provisions of this Agreement in any jurisdiction shall
not affect the validity, legality or enforceability of the remainder of this
Agreement in such jurisdiction or the validity, legality or enforceability of
this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall
be enforceable to the fullest extent permitted by law.
SECTION 7.6. Termination. (a) This Agreement may be
terminated in its entirety at any time prior to the First Closing at the
election of Industries or the holders of a majority of the outstanding shares
of Industries Common Stock for any reason or for no reason without any
liability to any Person.
(b) This Agreement may be terminated with respect to the
transactions contemplated to take place at the Second Closing at any time
prior to the Second Closing at the election of Industries or the holders of a
majority of the outstanding shares of Industries Common Stock or David B.
Ingram for any reason or for no reason without any liability to any Person.
This Agreement shall terminate with respect to the transactions contemplated
to take place at the Second Closing if the Second Closing does not occur prior
to December 31, 1997.
SECTION 7.7. Successors, Assigns, Transferees. No Holder
or Ingram Company may assign or otherwise transfer any of its rights under
this Agreement without the consent of each Ingram Company. This Agreement is
binding upon the parties to this Agreement and their respective legal
representatives, heirs, devisees, legatees, beneficiaries and successors and
permitted assigns and inures to the benefit of the parties to this Agreement
and their respective permitted legal representatives, heirs, devisees,
legatees, beneficiaries and other permitted successors and assigns, if any.
Neither this Agreement nor any provision hereof shall be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement, those who agree to be bound hereby and their respective permitted
legal representatives, heirs, devisees, legatees, beneficiaries and other
permitted successors and assigns. References to a party to this Agreement are
also references to any permitted successor or assign of such party and, when
appropriate to effect the binding nature of this Agreement for the benefit of
another party, any other successor or assign of a party.
SECTION 7.8. Amendments; Waivers. (a) No failure or
delay on the part of any party 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 not exclusive of any rights or
remedies provided by law.
(b) Neither this Agreement nor any term or provision hereof
may be amended or waived except by an instrument in writing:
(i) signed by (x) each of the Family Stockholders, (y) each
Ingram Company, following approval of such amendment or waiver by the
Board of Directors of such Ingram Company and (z) the Thrift Plan;
provided that the Thrift Plan is materially adversely affected by
such amendment or waiver; and
(ii) approved by the Holders that are members of each Group
which is materially adversely affected by such amendment or waiver
(an "Affected Group"); provided that the approval referred to in this
clause (ii) shall be deemed to have been received with respect to any
Affected Group (A) if Industries has not received written notice of
disapproval within ten business days after effective delivery of the
proposed amendment or waiver signed by (x) the Holders of at least
66% of the shares of Industries Common Stock (other than shares held
by the Family Stockholders and the Thrift Plan) held by all members
of such Affected Group (other than the Family Stockholders and the
Thrift Plan) and (y) at least 66% of the members (other than the
Family Stockholders and the Thrift Plan) of each such Affected Group
(the Persons referred to in clause (x) and (y) above are hereinafter
referred to as the "Required Holders"), or (B) if the amendment or
waiver is signed by the Holders of more than 33% of the shares of
Industries Common Stock (other than shares held by the Family
Stockholders and the Thrift Plan) held by the members of such
Affected Group or by more than 33% of the members (other than the
Family Stockholders or the Thrift Plan) of such Affected Group;
provided further that for purposes of this clause (ii), the Micro
Group shall be divided into two Groups, the first of which shall
include the E. Bronson Ingram 1995 Charitable Remainder 5% Unitrust,
the Martha and Bronson Ingram Foundation, the E. Bronson Ingram 1994
Charitable Lead Annuity Trust (collectively, the "Charitable Trusts
and Foundation") and the QTIP, and the second of which shall include
all other members of the Micro Group (other than the Family
Stockholders and the Thrift Plan).
(c) Industries shall deliver prompt written notice to each
other party hereto of any amendment or waiver to this Agreement approved
pursuant to this Section.
(d) Any Holder (other than an Ingram Stockholder, the QTIP,
the Charitable Trusts and Foundation or the Thrift Plan) who is materially
adversely affected by an amendment approved pursuant to this Section and who
did not execute such amendment pursuant to clause (b) above shall have the
right to withdraw as a party to this Agreement by written notice to Industries
delivered within 10 days following receipt of the notice described in clause
(c) above, in which event such Holder shall not participate in the Exchange
and shall retain its shares of Industries Common Stock.
SECTION 7.9. Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be an original with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 7.10. Remedies. The parties hereby acknowledge and
agree that in the event of any breach of this Agreement, the parties would be
irreparably harmed and could not be made whole by monetary damages. Each party
hereto accordingly agrees (i) not to assert by way of defense or otherwise
that a remedy at law would be adequate, and (ii) in addition to any other
remedy to which the parties may be entitled, that the remedy of specific
performance of this Agreement is appropriate in any action in court.
SECTION 7.11. Consent to Jurisdiction. Each party hereto
irrevocably submits to the non-exclusive jurisdiction of any Tennessee State
Court or United States Federal Court sitting in the Middle District of
Tennessee over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereto (other than any Ingram Company) hereby
irrevocably appoints CT Corporation System as its authorized agent to accept
and acknowledge on its behalf service of any and all process which may be
served in any such suit, action or proceeding in any such court and represents
and warrants that such agent has accepted such appointment. Each party hereto
consents to process being served in any such suit, action or proceeding by
serving a copy thereof upon the agent for service of process, provided that to
the extent lawful and possible, written notice of such service shall also be
mailed to such party. Each party hereto waives any right it may have to
assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this Section 7.11.
Nothing in this paragraph shall affect or limit any right to serve process in
any manner permitted by law, to bring proceedings in the courts of any
jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
SECTION 7.12. Expenses. (a) Subject to Section 6.5(b), all
costs and expenses of the Ingram Companies (i) incurred as a result of
services provided by third parties in connection with the preparation of this
Agreement, the Reorganization Agreement, the Ancillary Agreements (as defined
in the Reorganization Agreement) and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby (including
without limitation (x) rating agency fees incurred in connection with the
refinancings referred to in Section 5.2(vi), (y) expenses incurred in
connection with the Tax Ruling and (z) fees charged by software vendors in
connection with the transfer or replacement (but not enhancement), directly as
a result of the consummation of the transactions contemplated hereby, of
software packages currently used by the Ingram Companies and related equipment
costs) and (ii) incurred by the party providing services pursuant to the
Ancillary Agreements as a result of the cessation of such services, shall be
borne 23.01% by Industries, 72.84% by Micro and 4.15% by Entertainment, except
as otherwise specifically provided in this Agreement, the Reorganization
Agreement, any Ancillary Agreement or any Related Agreement; provided that (A)
to the extent that any of the costs and expenses referred to in clause (i) or
(ii) above are incurred as a result of arrangements pertaining solely to the
transactions contemplated by the Second Closing, and to the extent that Micro
did not participate in the negotiation of such arrangements, such costs and
expenses shall be borne 84.72% by Industries and 15.28% by Entertainment, (B)
all costs and expenses incurred in connection with the initial public offering
of Micro and the adoption and grant of awards under the 1996 Equity Incentive
Plan and 1996 Key Employee Stock Purchase Plan of Micro shall be borne by
Micro and (C) rating agency fees incurred in connection with all financings
(other than those referred to in Section 5.2(vi)) shall be borne by the party
undertaking such financing.
(b) All costs and expenses incurred by the parties to this
Agreement (other than the Ingram Companies) in connection with the preparation
of this Agreement, the Reorganization Agreement, the Ancillary Agreements and
the Related Agreements and the consummation of the transactions contemplated
hereby and thereby shall be borne by the party incurring such costs and
expenses, except as otherwise specifically provided herein or therein.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
INGRAM INDUSTRIES INC.
By: /s/ John B. Ingram
----------------------------------------
Name: John B. Ingram
Title: Co-President
Address: One Belle Meade Place
4400 Harding Road
Nashville, TN 37205
Telecopy: (615) 298-8242
INGRAM MICRO INC.
By: /s/ Jeffrey R. Rodek
----------------------------------------
Name: Jeffrey R. Rodek
Title: President
Address: 1600 East Saint Andrew Place
Santa Ana, CA 92705
Telecopy: 714-566-7900
INGRAM ENTERTAINMENT INC.
By: /s/ David B. Ingram
----------------------------------------
Name: David B. Ingram
Title: Chairman and President
Address: Two Ingram Blvd.
La Vergne, TN 37086
Telecopy: 615-287-4985
STATE STREET BANK & TRUST COMPANY
By:________________________________________
Name: Kelly Q. Driscoll
Title: Vice President
Address: Batterymarch Park III
3 Pinehill Drive
Quincy, MA 02169
Telecopy: 617-376-7313
HOLDERS E. BRONSON INGRAM
Q-TIP MARITAL TRUST
By: MARTHA R. INGRAM, ORRIN H. INGRAM,
JOHN R. INGRAM, DAVID B. INGRAM AND
ROBIN I. PATTON, as Co-Trustees
By:________________________________________
Name: Martha R. Ingram
Title: Co-Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
By:________________________________________
Name: Orrin H. Ingram
Title: Co-Trustee
Address: 1475 Moran Road
Franklin, TN 37069
By:________________________________________
Name: John R. Ingram
Title: Co-Trustee
Address: 311 Jackson Boulevard
Nashville, TN 37205
By:________________________________________
Name: David B. Ingram
Title: Co-Trustee
Address: 4417 Tyne Boulevard
Nashville, TN 37215
By:________________________________________
Name: Robin I. Patton
Title: Co-Trustee
Address: 1600 Chickering Road
Nashville, TN 37215
E. BRONSON INGRAM 1995 CHARITABLE
REMAINDER 5% UNITRUST
By: MARTHA R. INGRAM, as Trustee
By:________________________________________
Name: Martha R. Ingram
Title: Trustee
Address: 120 Hillwood Drive
Nashville, TN 37215
MARTHA AND BRONSON INGRAM FOUNDATION
By:________________________________________
Name: John R. Ingram
Title: President
Address: c/o Ingram Industries Inc.
4440 Harding Road
Nashville, TN 37205
(615) 298-8200
E. BRONSON INGRAM 1994
CHARITABLE LEAD ANNUITY TRUST
By: ORRIN H. INGRAM, JOHN R. INGRAM,
DAVID B. INGRAM, AND ROBIN B.
INGRAM PATTON, as Co-Trustees
By:________________________________________
Name: Orrin H. Ingram
Title: Co-Trustee
Address: 1475 Moran Road
Franklin, TN 37069
By:________________________________________
Name: John R. Ingram
Title: Co-Trustee
Address: 311 Jackson Boulevard
Nashville, TN 37205
By:________________________________________
Name: David B. Ingram
Title: Co-Trustee
Address: 4417 Tyne Boulevard
Nashville, TN 37215
By:________________________________________
Name: Robin B. Ingram Patton
Title: Co-Trustee
Address: 1600 Chickering Road
Nashville, TN 37215
INGRAM THRIFT PLAN
By: W.M. HEAD, R.E. CLAVERIE
AND T.H. LUNN, as Co-Trustees
By:________________________________________
Name: William M. Head
Title: Co-Trustee
Address: 1229 Nichol Lane
Nashville, TN 37205
By:________________________________________
Name: R.E. Claverie
Title: Co-Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
By:________________________________________
Name: T.H. Lunn
Title: Co-Trustee
Address: 509 Sugartree Lane
Franklin, TN 37064
___________________________________________
Linwood A. Lacy, Jr.
2304 Cranborne Road
Midlothian, VA 23113
LINWOOD A. LACY, JR.
1996 IRREVOCABLE TRUST DATED
MARCH 24, 1996
By: NATIONSBANK, N.A, as Trustee
By:________________________________________
Name:
Title:
Address: NationsBank, N.A.
Attention: Phil Rudder,
Vice President
12th and Main, 12th Floor
Richmond, VA 23261
____________________________ ___________________________________________
Spouse David W. Rutledge
34 Deerwood East
Irvine, CA 92714
____________________________ ___________________________________________
Spouse Ronald K. Hardaway
2 Moss Glen
Irvine, CA 92715
___________________________________________
Victoria L. Cotten
8 Medici
Aliso Viejo, CA 92656
___________________________________________
David B. Ingram
4417 Tyne Boulevard
Nashville, TN 37215
DAVID AND SARAH INGRAM
FAMILY 1996 GENERATION SKIPPING TRUST
By: THOMAS H. LUNN, as Trustee
By:________________________________________
Name: Thomas H. Lunn
Title: 509 Sugartree Lane
Address: Franklin, TN 37064
TRUST FOR THE BENEFIT OF
DAVID BRONSON INGRAM,
DATED OCTOBER 27, 1967
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF
DAVID BRONSON INGRAM,
DATED JUNE 14, 1968
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF
DAVID B. INGRAM, DATED DECEMBER 22, 1975
By: TRUST COMPANY BANK,
as Successor Trustee
By:____________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
DAVID B. INGRAM IRREVOCABLE TRUST
DATED AUGUST 16, 1988
By: ROY E. CLAVERIE, as Trustee
By:________________________________________
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
1994 DAVID BRONSON INGRAM TRUST
By: ROY E. CLAVERIE, as Trustee
By:________________________________________
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
___________________________________________
Thomas H. Lunn
509 Sugartree Lane
Franklin, TN 37064
LUNN FAMILY PARTNERS, L.P.
By: LUNN INVESTMENT COMPANY,
as General Partner
By:________________________________________
Name: Thomas H. Lunn
Title: President
Address: 509 Sugartree Lane
Franklin, TN 37064
___________________________________________
Philip M. Pfeffer
836 Treemont Court
Nashville, TN 37220
PFEFFER FAMILY PARTNERS, L.P.
By:
as General Partner
By:________________________________________
Name:
Title:
Address: 836 Treemont Court
Nashville, TN 37220
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA INGRAM,
GRANTORS, AND EDWARD G. NELSON,
TRUSTEE FOR THE BENEFIT OF
JOHN-LINDELL PHILIP PFEFFER
By: EDWARD G. NELSON, as Trustee
By:________________________________________
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
___________________________________________
John-Lindell Philip Pfeffer
Rue General Potton, 29
1050 Brussels
Belgium
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA INGRAM,
GRANTORS, AND EDWARD G. NELSON, TRUSTEE
FOR THE BENEFIT OF DAVID MAURICE PFEFFER
By: EDWARD G. NELSON, as Trustee
By:________________________________________
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA INGRAM,
GRANTORS, AND EDWARD G. NELSON,
TRUSTEE FOR THE BENEFIT OF
JAMES HOWARD PFEFFER
By: EDWARD G. NELSON, as Trustee
By:________________________________________
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
___________________________________________
Roy E. Claverie
6107 Hickory Valley Road
Nashville, TN 37205
ROY E. CLAVERIE, JR.
1996 VESTED TRUST
By: WILLIAM S. JONES, as Trustee
By:________________________________________
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
ROY E. CLAVERIE, JR.
1996 GENERATION SKIPPING TRUST
By: WILLIAM S. JONES, as Trustee
By:________________________________________
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
KEITH J. CLAVERIE, JR.
1996 VESTED TRUST
By: WILLIAM S. JONES, as Trustee
By:________________________________________
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
KEITH J. CLAVERIE, JR.
1996 GENERATION SKIPPING TRUST
By: WILLIAM S. JONES, as Trustee
By:________________________________________
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA INGRAM,
GRANTORS, AND EDWARD G. NELSON,
TRUSTEE FOR THE BENEFIT OF
KEITH JOSEPH CLAVERIE
By: EDWARD G. NELSON, as Trustee
By:________________________________________
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
TRUST AGREEMENT OF JUNE 11, 1987
BETWEEN BRONSON AND MARTHA INGRAM,
GRANTORS, AND EDWARD G. NELSON,
TRUSTEE FOR THE BENEFIT OF
ROY EDWARD CLAVERIE, JR.
By: EDWARD G. NELSON, as Trustee
By:________________________________________
Name: Edward G. Nelson
Title: Trustee
Address: Nelson Capital Corp.
3401 West End Avenue
Nashville, TN 37203
___________________________________________
Roy E. Claverie, Jr.
6107 Hickory Valley Road
Nashville, TN 37205
___________________________________________
David F. Sampsell
420 Welshwood #47
Nashville, TN 37211
___________________________________________
Steven J. Mason
1318 Chickering Road
Nashville, TN 37215
THE DAVID C. MASON
1996 GENERATION SKIPPING TRUST
By: LINDA L. MASON AND
MICHAEL G. MASON, as Co-Trustees
By:________________________________________
Name: Linda L. Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
By:________________________________________
Name: Michael G. Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
THE MICHAEL G. MASON
1996 GENERATION SKIPPING TRUST
By: LINDA L. MASON AND
STEVEN J. MASON, JR., as Co-Trustees
By:________________________________________
Name: Linda L. Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
By:________________________________________
Name: Steven J. Mason, Jr.
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
THE STEVEN J. MASON, JR.
1996 GENERATION SKIPPING TRUST
By: LINDA L. MASON AND DAVID C. MASON,
as Co-Trustees
By:________________________________________
Name: Linda L. Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
By:________________________________________
Name: David C. Mason
Title: Co-Trustee
Address: 1318 Chickering Road
Nashville, TN 37215
___________________________________________
Neil N. Diehl
6 Castle Rising
Nashville, TN 37215
___________________________________________
W. Michael Head
1229 Nichol Lane
Nashville, TN 37205
___________________________________________
David L. Hettinger
5010 Woodland Hills Drive
Nashville, TN 37211
___________________________________________
Lavona G. Russell
9549 Butler Drive
Brentwood, TN 37027
___________________________________________
Michael F. Lovett
1013 Beech Grove Road
Brentwood, TN 37027
___________________________________________
William S. Jones
6015 Wellesley Way
Brentwood, TN 37027
___________________________________________
James F. Neal
c/o Neal & Harwell
2000 One Nashville Place
150 Fourth Avenue, North
Nashville, TN 37219
___________________________________________
Martha R. Ingram
120 Hillwood Drive
Nashville, TN 37215
___________________________________________
Orrin H. Ingram, II
1475 Moran Road
Franklin, TN 37069
TRUST FOR THE BENEFIT OF ORRIN HENRY
INGRAM, II, DATED
OCTOBER 27, 1967
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF ORRIN HENRY
INGRAM, II, DATED JUNE 14, 1968
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF ORRIN H.
INGRAM, II, DATED DECEMBER 22, 1975
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
ORRIN H. INGRAM IRREVOCABLE
TRUST DATED AUGUST 16, 1988
By: ROY E. CLAVERIE, as
Trustee
By:________________________________________
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
1994 ORRIN HENRY INGRAM TRUST
By: ROY E. CLAVERIE, as Trustee
By:________________________________________
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
________________________________________
John R. Ingram
311 Jackson Boulevard
Nashville, TN 37205
THE JOHN AND STEPHANIE INGRAM
FAMILY 1996 GENERATION SKIPPING TRUST
By: WILLIAM S. JONES, as Trustee
By:________________________________________
Name: William S. Jones
Title: Trustee
Address: 6015 Wellesley Way
Brentwood, TN 37027
TRUST FOR THE BENEFIT OF JOHN
RIVERS INGRAM, DATED OCTOBER 27, 1967
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF JOHN RIVERS
INGRAM, DATED JUNE 14, 1968
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF JOHN R.
INGRAM, DATED DECEMBER 22, 1975
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
JOHN R. INGRAM IRREVOCABLE TRUST
DATED AUGUST 16, 1988
By: ROY E. CLAVERIE, as Trustee
By:________________________________________
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
1994 JOHN RIVERS INGRAM TRUST
By: ROY E. CLAVERIE, as Trustee
By:________________________________________
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
___________________________________________
Robin B. Ingram Patton
1600 Chickering Road
Nashville, TN 37215
TRUST FOR THE BENEFIT OF ROBIN
INGRAM, DATED OCTOBER 27, 1967
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF ROBIN
BIGELOW INGRAM, DATED JUNE 14, 1968
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
TRUST FOR THE BENEFIT OF
ROBIN B. INGRAM, DATED DECEMBER 22, 1975
By: TRUST COMPANY BANK,
as Successor Trustee
By:________________________________________
Name: Thomas A. Shanks, Jr.
Title: First Vice President
Address: Trust Company Bank
Trust Company of Georgia
Attn: Thomas A. Shanks, Jr.
Trust Company Tower
25 Park Place, 2nd Floor
Atlanta, GA 30303
ROBIN B. INGRAM IRREVOCABLE
TRUST DATED AUGUST 16, 1988
By: ROY E. CLAVERIE, as Trustee
By:________________________________________
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
1994 ROBIN INGRAM PATTON TRUST
By ROY E. CLAVERIE, as Trustee
By:________________________________________
Name: Roy E. Claverie
Title: Trustee
Address: 6107 Hickory Valley Road
Nashville, TN 37205
___________________________________________
Pankaj B. Shah
1201 Parker Place
Brentwood, TN 37027-7002
___________________________________________
S. Ray Taylor
3280 Central Valley Road
Murfreesboro, TN 37219
___________________________________________
Jacob S. Sherman
215 Lauderdale Road
Nashville, TN 37205
___________________________________________
Susan R. Flaster
144 September Drive
La Vergne, TN 37086
Exhibit 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Prospectus constituting part of this
Registration Statement on Form S-1 (333-_____) of our report dated February
29, 1996, except as to Note 12 which is dated as of September 9, 1996 and Note
2 which is dated as of October 29, 1996, relating to the financial statements
of Ingram Micro Inc., which appears in such Prospectus. We also consent to
the application of such report to the Financial Statement Schedules for the
three years ended December 30, 1995 listed under Item 16(b) of this
Registration Statement when such schedules are read in conjunction with the
financial statements referred to in our report. The audits referred to in
such report also included these schedules. We also consent to the reference
to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Nashville, Tennessee
November 20, 1996
