-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PELXh/NY7lfAWxJy/OvKifYc0zg4G6NCLd8M4E7hn8wTWL7q25XfgrrrllMPai7S cXO2541bFzhsENsOIrFGug== 0000790703-97-000005.txt : 19970430 0000790703-97-000005.hdr.sgml : 19970430 ACCESSION NUMBER: 0000790703-97-000005 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970429 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TECH DATA CORP CENTRAL INDEX KEY: 0000790703 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE [5045] IRS NUMBER: 591578329 STATE OF INCORPORATION: FL FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14625 FILM NUMBER: 97589779 BUSINESS ADDRESS: STREET 1: 5350 TECH DATA DR CITY: CLEARWATER STATE: FL ZIP: 34620 BUSINESS PHONE: 8135397429 MAIL ADDRESS: STREET 1: 5350 TECH DATA DRIVE CITY: CLEARWATER STATE: FL ZIP: 34620 10-K/A 1 - ------------------------------------------------------------------------------ ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 --------------------------- (Mark one) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED EFFECTIVE OCTOBER 7, 1996) For the fiscal year ended January 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from to Commission file number 0-14625 TECH DATA CORPORATION (Exact name of registrant as specified in its charter) ------------------------------------------- Florida No. 59-1578329 (State or other jurisdiction (I.R.S. Employer Identification Number) Of incorporation or organization) 5350 Tech Data Drive, Clearwater, FL 34620 (Address of principal executive offices (Zip Code) --------------------------------------------- Registrant's telephone number including area code: (813) 539-7429 Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $.0015 per share. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of regulation S-K is not contained herein, and will not be contained to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference to Part III of this Form 10-K or any amendment to this Form 10-K. Aggregate market value of the voting stock held by non-affiliates of the registrant as of March 31, 1997: $938,276,000 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at March 31, 1997 Common stock, par value $.0015 per share 43,335,078 DOCUMENTS INCORPORATED BY REFERENCE The registrant's Proxy Statement for use at the Annual Meeting of Shareholders on June 10, 1997 is incorporated by reference in Part III of this Form 10-K to the extent stated herein. ================================================================================ - -------------------------------------------------------------------------------- PART III PART IV ITEM 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K (c) the exhibit numbers on the following list correspond to the numbers in the exhibit table required pursuant to Item 601 of Regulation S-K. 3-A(1) -- Articles of Incorporation of the Company as amended to April 23, 1986. 3-B(2) -- Articles of Amendment to Articles of Incorporation of the Company filed on August 27, 1987. 3-C(13) -- By-Laws of the Company as amended to November 28, 1995. 3-F(9) -- Articles of Amendment to Articles of Incorporation of the Company filed on July 15, 1993. 10-F(4) -- Incentive Stock Option Plan, as amended, and form of option agreement. 10-G(10) -- Employee Stock Ownership Plan as amended December 16, 1994. 10-V(5) -- Employment Agreement between the Company and Edward C. Raymund dated as of January 31, 1991. 10-W(5) -- Irrevocable Proxy and Escrow Agreement dated April 5, 1991. 10-X(6) -- First Amendment to the Employment Agreement between the Company and Edward C. Raymund dated November 13, 1992. 10-Y(6) -- First Amendment in the nature of a Complete Substitution to the Irrevocable Proxy and Escrow Agreement dated November 13, 1992. 10-Z(7) -- 1990 Incentive and Non-Statutory Stock Option Plan. 10-AA(7) -- Non-Statutory Stock Option Grant Form. 10-BB(7) -- Incentive Stock Option Grant Form. 10-CC(8) -- Employment Agreement between the Company and Steven A. Raymund dated February 1, 1992. 10-EE(10)-- Retirement Savings Plan as amended January 26, 1994. 10-FF(9) -- Revolving Credit and Reimbursement Agreement dated December 22, 1993. 10-GG(9) -- Transfer and Administration Agreement dated December 22, 1993. 10-HH(10)-- Amendments (Nos. 1-4) to the Transfer and Administration Agreement. 10-II(10)-- Amended and Restated Revolving Credit and Reimbursement Agreement dated July 28, 1994, as amended. 10-JJ(10)-- Revolving Foreign Currency Agreement dated August 4, 1994, as amended. 10-KK(13)-- Amendments (Nos. 5,6) to the Transfer and Administration Agreement 10-LL(13)-- Amendments (Nos. 3-5) to the Amended and Restated Revolving Credit and Reimbursement Agreement dated July 28, 1994, as amended. 10-MM(13)-- Amendments (Nos. 3-5) to the Revolving Foreign Currency Agreement dated August 4, 1994, as amended. 10-NN(12)-- Non-Employee Directors' 1995 Non-Statutory Stock Option Plan. 10-OO(12)-- 1995 Employee Stock Purchase Plan. 10-PP(12)-- Employment Agreement between the Company and A. Timothy Godwin dated as of December 5, 1995. 10-QQ(3) -- Amended and Restated Transfer and Administration Agreement dated January 21, 1997. 10-RR(3) -- Amendment Number 1 to the Amended and Restated Transfer and Administration Agreement dated March 3, 1997 10-SS(3) -- Revolving Credit and Reimbursement Agreement dated May 23, 1996. 21(3) -- Subsidiaries of Registrant. 99-A(11) -- Cautionary Statement For Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995. - ------------- (1) Incorporated by reference to the Exhibits included in the Company's Registration Statement on Form S-1, File No. 33-4135. (2) Incorporated by reference to the Exhibits included in the Company's Registration Statement on Form S-1, File No. 33-21997. (3) Filed herewith. (4) Incorporated by reference to the Exhibits included in the Company's Registration Statement on Form S-8, File No. 33-21879. (5) Incorporated by reference to the Exhibits included in the Company's Form 10-Q for the quarter ended July 31, 1991, File No. 0-14625. (6) Incorporated by reference to the Exhibits included in the Company's Form 10-Q for the quarter ended October 31, 1992, File No. 0-14625. (7) Incorporated by reference to the Exhibits included in the Company's Registration Statement on Form S-8, File No. 33-41074. (8) Incorporated by reference to the Exhibits included in the Company's Form 10-K for the year ended January 31, 1993, File No. 0-14625. (9) Incorporated by reference to the Exhibits included in the Company's Form 10-K for the year ended January 31, 1994, File No. 0-14625. (10) Incorporated by reference to the Exhibits included in the Company's Form 10-K for the year ended January 31, 1995, File No. 0-14625. (11) Incorporated by reference to the Exhibits included in the Company's Form 8-K filed on March 26, 1996, File No. 0-14625. (12) Incorporated by reference to the Exhibits included in the Company's Definitive Proxy Statement for the 1995 Annual Meeting of Shareholders, File No. 0-14625. (13) Incorporated by reference to the Exhibits included in the Company's Form 10-K for the year ended January 31, 1996, File No. 0-14625. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 29th day of April 1997. TECH DATA CORPORATION By /s/ STEVEN A. RAYMUND --------------------- Steven A. Raymund Chairman of the Board of Directors; Chief Executive Officer POWER OF ATTORNEY Each person whose signature to this Report on Form 10-K/A appears below hereby appoints Jeffery P. Howells and Arthur W. Singleton, or either of them, as his attorney-in-fact to sign on his behalf individually and in the capacity stated below and to file any and all amendments and post-effective amendments to this Report on Form 10-K/A, and any and all instruments or documents filed as a part of or in connection with this Report on Form 10-K/A or such amendments thereto, and the attorney-in-fact, or either of them, may make such changes and additions to this Report on Form 10-K/A as the attorney-in-fact, or either of them, may deem necessary or appropriate. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ STEVEN A. RAYMUND Chairman of the Board of Directors; April 29, 1997 - --------------------------- Chief Executive Officer Steven A. Raymund /s/ JEFFERY P. HOWELLS Executive Vice President of Finance; April 29, 1997 - --------------------------- Chief Financial Officer; Jeffery P. Howells (principal financial officer) /s/ JOSEPH B. TREPANI Vice President and Worldwide Controller; April 29, 1997 - --------------------------- (principal accounting officer) Joseph B. Trepani /s/ CHARLES E. ADAIR Director April 29, 1997 - --------------------------- Charles E. Adair /s/ DANIEL M. DOYLE Director April 29, 1997 - --------------------------- Daniel M. Doyle /s/ DONALD F. DUNN Director April 29, 1997 - --------------------------- Donald F. Dunn /s/ LEWIS J. DUNN Director April 29, 1997 - --------------------------- Lewis J. Dunn /s/ EDWARD C. RAYMUND Director; Chairman Emeritus April 29, 1997 - --------------------------- Edward C. Raymund /s/ JOHN Y. WILLIAMS Director April 29, 1997 - --------------------------- John Y. Williams
EX-10.QQ 2 - -------------------------------------------------------------------------------- AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT among ENTERPRISE FUNDING CORPORATION, as Company TECH DATA FINANCE, INC. as Transferor and TECH DATA CORPORATION, as Collection Agent and Guarantor and NATIONSBANK, N.A., as Agent and a Bank Investor Dated as of January 21, 1997 - -------------------------------------------------------------------------------- 0104420.05-01S7a TABLE OF CONTENTS ARTICLE I DEFINITIONS SECTION 1.1. Certain Defined Terms......................................... 1 SECTION 1.2. Other Terms................................................... 29 SECTION 1.3. Computation of Time Periods................................... 29 ARTICLE II PURCHASES AND SETTLEMENTS SECTION 2.1. Facility...................................................... 30 SECTION 2.2. Transfers; Certificates; Eligible Receivables............................. 30 SECTION 2.3. Selection of Tranche Periods and Tranche Rates.................................... 35 SECTION 2.4. Discount, Fees and Other Costs and Expenses......................................... 39 SECTION 2.5. Non-Liquidation Settlement and Reinvestment Procedures.......................... 39 SECTION 2.6. Liquidation Settlement Procedures............................. 40 SECTION 2.7. Fees.......................................................... 42 SECTION 2.8. Protection of Ownership Interest of the Company and the Bank Investors................... 42 SECTION 2.9. Deemed Collections; Application of Payments......................................... 44 SECTION 2.10. Payments and Computations, Etc................................ 45 SECTION 2.11. Reports....................................................... 46 SECTION 2.12. Collection Account............................................ 46 SECTION 2.13. Sharing of Payments, Etc...................................... 46 SECTION 2.14. Rights of Set-off............................................. 47 ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.1. Representations and Warranties of the Transferor....................................... 48 SECTION 3.2. Reaffirmation of Representations and Warranties by the Transferor..................... 52 0104420.05-01S7a i SECTION 3.3. Representations and Warranties of Tech Data, as Collection Agent and Guarantor........................................ 52 SECTION 3.4 Reaffirmation of Representations and Warranties by Tech Data, as Collection Agent and Guarantor................... 55 ARTICLE IV CONDITIONS PRECEDENT SECTION 4.1. Conditions to Closing......................................... 56 SECTION 4.2. Post Closing Conditions....................................... 59 ARTICLE V COVENANTS SECTION 5.1. Affirmative Covenants of Transferor........................... 60 SECTION 5.2. Negative Covenants of Transferor.............................. 63 SECTION 5.3. Affirmative Covenants of Tech Data............................ 65 SECTION 5.4. Negative Covenants of Tech Data............................... 68 SECTION 5.5. Financial Covenants........................................... 70 ARTICLE VI ADMINISTRATION AND COLLECTIONS SECTION 6.1. Appointment of Collection Agent............................... 71 SECTION 6.2. Duties of Collection Agent.................................... 71 SECTION 6.3. Rights After Designation of New Collection Agent................................. 74 SECTION 6.4. Responsibilities of the Transferor and Tech Data.................................... 75 ARTICLE VII TERMINATION EVENTS SECTION 7.1. Termination Events............................................ 76 SECTION 7.2. Termination................................................... 78 ARTICLE VIII INDEMNIFICATION; EXPENSES; RELATED MATTERS SECTION 8.1. Indemnities by the Transferor................................. 80 0104420.05-01S7a ii SECTION 8.2. Indemnity for Taxes, Reserves and Expenses......................................... 82 SECTION 8.3. Other Costs, Expenses and Related Matters.......................................... 84 SECTION 8.4. Reconveyance Under Certain Circumstances.................................... 85 ARTICLE IX GUARANTEE SECTION 9.1. Guaranty of Obligations....................................... 87 SECTION 9.2. Validity of Obligations; Irrevocability................................... 87 SECTION 9.3. Rights of Set-Off............................................. 88 ARTICLE X THE AGENT; BANK COMMITMENT SECTION 10.1. Authorization and Action..................................... 89 SECTION 10.2. Agent's Reliance, Etc........................................ 91 SECTION 10.3. Credit Decision.............................................. 91 SECTION 10.4. Indemnification of the Agent..................................92 SECTION 10.5. Successor Agent.............................................. 92 SECTION 10.6. Payments by the Agent........................................ 93 SECTION 10.7. Bank Commitment; Assignment to Bank Investors.................................. 94 ARTICLE XI MISCELLANEOUS SECTION 11.1. Term of Agreement............................................ 99 SECTION 11.2. Waivers; Amendments.......................................... 99 SECTION 11.3. Notices ..................................................... 99 SECTION 11.4. Governing Law; Submission to Jurisdiction; Integration......................101 SECTION 11.5. Severability; Counterparts...................................102 SECTION 11.6. Successors and Assigns.......................................102 SECTION 11.7. Waiver of Confidentiality....................................103 SECTION 11.8. Confidentiality Agreement....................................103 SECTION 11.9. No Bankruptcy Petition Against the Company........................................103 SECTION 11.10. No Recourse Against Stockholders, Officers or Directors..........................103 SECTION 11.11. Characterization of the Transactions 0104420.05-01S7a iii Contemplated by the Agreement..................104 SECTION 11.12. Optional Reconveyance of All Receivables....................................104 SECTION 11.13. Mandatory Reconveyance of Certain Receivables....................................105 AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (this "Agreement"), dated as of January 21, 1997 among TECH DATA CORPORATION, a Florida corporation ("Tech Data"), as collection agent and guarantor (in such capacities, the "Collection Agent" and the "Guarantor", respectively), TECH DATA FINANCE, INC., a Califor- nia corporation, as transferor (in such capacity, the "Transferor"), ENTERPRISE FUNDING CORPORATION, a Delaware corporation (the "Company"), and NATIONSBANK, N.A., a national banking association ("NationsBank"), as agent for the Company and the Bank Investors (in such capacity, the "Agent") and as a Bank Investor, amending and restating that certain Transfer and Administration Agreement among Tech Data, as collection agent and guarantor, the Transferor and Company dated as of December 23, 1993, and as amended to the date hereof. PRELIMINARY STATEMENTS WHEREAS, the Transferor may desire to convey, transfer and assign, from time to time, undivided percentage interests in certain accounts receivable, and the Company may desire to, and the Bank Investors, if requested shall, accept such conveyance, transfer and assignment of such undivided percentage interests, subject to the terms and conditions of this Agreement. NOW, THEREFORE, the parties hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.1. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: 0104420.05-01S7a "Administrative Agent" means NationsBank, N.A., as administrative agent. "Adverse Claim" means a lien, security interest, charge or encumbrance, or other right or claim in, of or on any Person's assets or properties in favor of any other Person (including any UCC financing statement or any similar instrument filed against such Person's assets or properties). "Affected Assets" means, collectively, the Receivables and the Related Security, Collections and Proceeds relating thereto. "Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of voting stock, by contract or otherwise. "Affiliated Obligor" means any Obligor which is an Affiliate of another Obligor. "Agent" means NationsBank, N.A., in its capacity as agent for the Company and the Bank Investors, and any successor thereto appointed pursuant to Article X. "Aggregate Unpaids" means, at any time, an amount equal to the sum of (i) the aggregate accrued and unpaid Discount with respect to all Tranche Periods at such time, (ii) the Net Investment at such time, and (iii) all other amounts owed (whether due or accrued) hereunder by Transferor to the Company at such time. 0104420.05-01S7a 2 "Applicable Margin" means the percent per annum set forth below in the case of a Eurodollar Tranche or a CD Tranche, which percent shall be the Applicable Margin effective with Tranche Periods commencing after the first day next following the delivery by the Transferor of the quarterly certificate referred to in Section 5.3(a)(iii) hereof demonstrating that (i) the ratio of Consolidated Total Funded Indebtedness to Consolidated Total Capital (each as defined in Exhibit N attached hereto) is less than or equal to or more than, as the case may be, or (ii) the ratio of Consolidated EBIT to Consolidated Interest Expense (each as defined in Exhibit N attached hereto) is greater than or equal to or less than, as the case may be, the applicable ratio set forth opposite such Applicable Margin (provided that if such determination shall result in more than one Applicable Margin, the lower Applicable Margin shall apply): ======================================================================= |Ratio of | OR | Ratio of | Eurodol- | CD | |EBIT to | -- | Debt to | lar | Tranche | |Interest | | Capital | Tranche | Applica- | | | | | | ble Mar- | | | | | | gin | | | | | | | |-----------|---------|---------------|--------------|----------------| |Less than | | Less than | .550% | .675% | |3.0 to | | .60 to | | | |1.00 | | 1.00 but | | | | | | equal to | | | | | | or great- | | | | | | er than | | | | | | .55 to | | | | | | 1.00 | | | |-----------|---------|---------------|--------------|----------------| |Greater | | Less than | .450% | .575% | |than or | | .55 to | | | |equal to | | 1.00 but | | | |3.0 to | | equal to | | | |1.00 but | | or great- | | | |less than | | er than | | | |4.0 to | | .50 to | | | |1.00 | | 1.00 | | | |---------------------------------------------------------------------| 0104420.05-01S7a 3 |-----------|---------|---------------|--------------|----------------| |Greater | | Less than | .400% | .525% | |than or | | .50 to | | | |equal to | | 1.00 but | | | |4.0 but | | equal to | | | |less than | | or great- | | | |5.0 to | | er than | | | |1.0 | | .45 to | | | | | | 1.00 | | | |-----------|---------|---------------|--------------|----------------| |Greater | | Less than | .375% | .500% | |than or | | .45 to | | | |equal to | | 1.00 | | | |5.0 to | | | | | |1.00 | | | | | | | | | | | | | | | | | | | | | | | ======================================================================= Notwithstanding the foregoing, if Tech Data fails to deliver any such quarterly certificate when required pursuant to Section 5.3(a)(iii) hereof, then the Applicable Margin for any Eurodollar Tranche or CD Tranche shall be the highest Applicable Margin for such type of Tranche set forth above until such quarterly certificate is so delivered. From the Closing Date to the first date such quarterly certificate is required to be delivered, the Applicable Margin shall be .525% for CD Tranches and .40% for Eurodollar Tranches. "Assignment Amount" with respect to a Bank Investor shall mean at any time an amount equal to the lesser of (i) such Bank Investor's Pro Rata Share of the Net Investment at such time and (ii) such Bank Investor's unused Commitment. "Assignment and Assumption Agreement" means an Assignment and Assumption Agreement substantially in the form of Exhibit G attached hereto. "Average Collection Period" means at any time a period of days equal to the product of (i) a fraction the numerator of which shall be the amount set forth in the most recent Investor Report as the "Beginning Balance" of the Receivables and the denominator of which shall be the Collections as set forth in the most recent Investor Report and (ii) thirty (30). "Bank Investors" shall mean NationsBank, N.A. and its successors and assigns. 0104420.05-01S7a 4 "Base Rate" or "BR" means, a rate per annum equal to the greater of (i) the prime rate of interest announced by the Liquidity Provider (or, if more than one Liquidity Provider, then by NationsBank) from time to time, changing when and as said prime rate changes (such rate not necessarily being the lowest or best rate charged by the Liquidity Provider (or NationsBank, as applicable)) and (ii) sum of (a) 1.50% and (b) the rate equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the Liquidity Provider (or, if more than one Liquidity Provider, then by NationsBank) from three Federal funds brokers of recognized standing selected by it. "Benefit Plan" means any employee benefit plan as defined in Section 3(3) of ERISA in respect of which the Transferor or any ERISA Affiliate of the Transferor, is or at any time during the immediately preceding six years was, an "employer" as defined in Section 3(5) of ERISA. "Business Day" means any day excluding Satur- day, Sunday and any day on which banks in New York, New York, Charlotte, North Carolina, Ontario, California or Clearwater, Florida are authorized or required by law to close, and, when used with respect to the determination of any Eurodollar Rate or any notice with respect thereto, any such day which is also a day for trading by and between banks in United States dollar deposits in the London interbank market. "BR Tranche" means a Tranche as to which Discount is calculated at the Base Rate. "BR Tranche Period" means, with respect to a BR Tranche, either (i) prior to the Termination Date, a period of up to 30 days requested by the Transferor and agreed to by the Company, NationsBank on behalf of the Liquidity Provider, or the Agent, as the case may be, commencing on a Business Day requested by the Transferor 0104420.05-01S7a 5 and agreed to by the Company, NationsBank or the Agent, as the case may be, or (ii) after the Termination Date, a period of one day. If such BR Tranche Period would end on a day which is not a Business Day, such BR Tranche Period shall end on the next succeeding Business Day. "Capitalized Lease" of a Person means any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with generally accepted accounting principles. "CD Rate" shall mean, with respect to any CD Tranche Period, a rate which is the Applicable Margin in excess of a rate per annum equal to the sum (rounded upward to the nearest 1/100 of 1%) of (A) the rate obtained by dividing (x) the Certificate of Deposit Rate for such CD Tranche Period by (y) a percentage equal to 100% minus the stated maximum rate for all reserve requirements as specified in Regulation D (including without limitation any marginal, emergency, supplemental, special or other reserves) that would be applicable during such Tranche Period to a negotiable certificate of deposit in excess of $100,000, with a maturity approximately equal to such Tranche Period, of any member bank of the Federal Reserve System plus (B) the then daily net annual assessment rate (rounded upward, if necessary, to the nearest 1/100 of 1%) as estimated by the Agent for determining the current annual assessment payable by the Agent to the Federal Deposit Insurance Corporation for insuring such certificates of deposit. "CD Tranche" means a Tranche as to which Discount is calculated at the CD Rate. "CD Tranche Period" means, with respect to a CD Tranche, either (i) prior to the Termination Date, a period of up to one month requested by the Transferor and agreed to by the Company, NationsBank on behalf of the Liquidity Provider, or the Agent, as the case may be, commencing on a Business Day requested by the Transferor and agreed to by the Company, NationsBank or the Agent, as the case may be, or (ii) after the Termination Date, a period of one day. If such CD Tranche Period would end on a day which is not a Business Day, such CD Tranche Period shall end on the next succeeding Business Day. 0104420.05-01S7a 6 "Certificate" means the certificate issued to the Agent for the benefit of the Company and the Bank Investors pursuant to Section 2.2(d) hereof. "Certificate of Deposit Rate" means, with respect to any CD Tranche Period, the average of the bid rates determined by the Agent to be bid rates per annum, at approximately 10:00 a.m. (New York City time) on the Business Day before the first day of the CD Tranche Period for which such CD Rate is to be applicable, of two or more New York certificate of deposit dealers of recognized standing selected by the Agent for the purchase in New York from the Agent at face value of certificates of deposit of the Agent in an aggregate amount approximately comparable to the amount of the CD Tranche to which such CD Rate is to be applicable and with a maturity approximately equal to the applicable CD Tranche Period. "Closing Date" means January 21, 1997 "Collateral Agent" means NationsBank N.A., as collateral agent for any Liquidity Provider, any Credit Support Provider, the holders of Commercial Paper and certain other parties. "Collections" means, with respect to any Receivable, all cash collections and other cash proceeds of such Receivable, including, without limitation, all Finance Charges, if any, and cash proceeds of Related Security with respect to such Receivable and any Deemed Collections of such Receivable. "Collection Account" means the account, established by the Agent, for the benefit of the Company and the Bank Investors, pursuant to Section 2.12. "Collection Agent" means at any time the Person then authorized pursuant to Section 6.1 to service, administer and collect Receivables. "Collection Agent Account" means the account, established by the Collection Agent, for the benefit of the Company and the Bank Investors, pursuant to Section 2.8(b). "Collection Delay" means 30 days. 0104420.05-01S7a 7 "Commercial Paper" means the promissory notes of the Company issued by the Company in the commercial paper market. "Commitment" means (i) with respect to each Bank Investor party hereto, the commitment of such Bank Investor to make acquisitions from the Transferor or the Company in accordance herewith in an amount not to exceed the dollar amount set forth opposite such Bank Investor's signature on the signature page hereto under the heading "Commitment", minus the dollar amount of any Commitment or portion thereof assigned pursuant to an Assignment and Assumption Agreement plus the dollar amount of any increase to such Bank Investor's Commitment consented to by such Bank Investor prior to the time of determination, (ii) with respect to any assignee of a Bank Investor party hereto taking pursuant to an Assignment and Assumption Agreement, the commitment of such assignee to make acquisitions from the Transferor or the Company not to exceed the amount set forth in such Assignment and Assumption Agreement minus the dollar amount of any Commitment or portion thereof assigned pursuant to an Assignment and Assumption Agreement prior to such time of determination and (iii) with respect to any assignee of an assignee referred to in clause (ii), the commitment of such assignee to make acquisitions from the Transferor or the Company not to exceed the amount set forth in an Assignment and Assumption Agreement between such assignee and its assign. "Commitment Termination Date" means December 31, 1997, or such later date to which the Commitment Termination Date may be extended by Transferor, the Agent and the Bank Investors not later than 60 days prior to the then current Commitment Termination Date. "Company" means Enterprise Funding Corporation, and its successors and assigns. "Concentration Factor" means for any Designated Obligor (a) 2% of the Outstanding Balance of all Eligible Receivables; provided however, that for up to three (3) Designated Obligors at any one time, 2.5% of the Outstanding Balance of all Eligible Receivables at such time; provided further, however, that with respect to any Designated Obligor and its affiliates whose long term unsecured debt obligations are rated at least "A1" by 0104420.05-01S7a 8 Moody's and at least "A+" by Standard & Poor's and with respect to which rating neither Moody's nor Standard & Poor's shall have made a public announcement anticipating a downgrading of such Designated Obligor's long term unsecured debt obligations to a rating less than the aforementioned ratings ("A1/A+ Rated Obligors") 5% of the Outstanding Balance of all Eligible Receivables at such time, or (b) such other greater amount determined by the Agent in the reasonable exercise of its good faith judgment and disclosed in a written notice delivered to the Transferor. "Consolidated Fixed Charge Ratio" has the meaning specified in Exhibit N hereto. "Consolidated Tangible Net Worth" has the meaning specified in Exhibit N hereto. "Consolidated Total Liabilities" has the mean- ing specified in Exhibit N hereto. "Contract" means an agreement or invoice in substantially the form of one of the forms set forth in Exhibit A attached hereto or otherwise approved by the Company, pursuant to or under which an Obligor shall be obligated to pay for merchandise purchased or services rendered. "CP Rate" means, with respect to any CP Tranche Period, the rate equivalent to the rate (or if more than one rate, the weighted average of the rates) at which Commercial Paper having a term equal to such CP Tranche Period may be sold by any placement agent or commercial paper dealer selected by the Company, provided, however, that if the rate (or rates) as agreed between any such agent or dealer and the Company is a discount rate, then the rate (or if more than one rate, the weighted average of the rates) resulting from the Company's converting such discount rate (or rates) to an interest-bearing equivalent rate per annum. "CP Tranche" means a Tranche as to which Discount is calculated at a CP Rate. "CP Tranche Period" means, with respect to a CP Tranche, a period of days not to exceed 90 days commencing on a Business Day requested by the Transferor and 0104420.05-01S7a 9 agreed to by the Company pursuant to Section 2.3. If a CP Tranche Period would end on a day which is not a Business Day, such CP Tranche Period shall end on the next succeeding Business Day. "Credit and Collection Policy" shall mean Tech Data's and the Transferor's credit and collection policy or policies and practices, relating to Contracts and Receivables existing on the date hereof and referred to in Exhibit B attached hereto, as modified from time to time in compliance with Section 5.2(c). "Credit Support Agreement" means the agreement between the Company and the Credit Support Provider evidencing the obligation of the Credit Support Provider to provide credit support to the Company in connection with the issuance by the Company of Commercial Paper. "Credit Support Provider" means the Person or Persons who provides credit support to the Company in connection with the issuance by the Company of Commercial Paper. "Current Receivable" means any Receivable with respect to which no payment is outstanding beyond the date on which such payment was due. "Dealer Fee" means the fee payable by the Transferor to the Agent, pursuant to Section 2.4 hereof, the terms of which are set forth in the Fee Letter. "Deemed Collections" means any Collections on any Receivable deemed to have been received pursuant to Section 2.9(a) or (b) hereof. "Defaulted Receivable" means a Receivable: (i) as to which any payment, or part thereof, remains unpaid for 91 days or more from the original due date for such Receivable; (ii) as to which an Event of Bankruptcy has occurred with respect to the Obligor thereof; (iii) which has been identified by the Collection Agent as uncollect- ible; or (iv) which, consistent with the Credit and Col- lection Policy, should be written off the Transferor's books as uncollectible. "Delinquency Ratio" means, the ratio (expressed as a percentage) computed as of the last day of each 0104420.05-01S7a 10 calendar month by dividing (i) the aggregate Outstanding Balance of all outstanding Receivables as to which on the date of determination, any payment or part thereof, remains unpaid for more than 30 days from the original due date for such Receivable and which is not a Defaulted Receivable, by (ii) the aggregate Outstanding Balance of all Receivables as of such date less Defaulted Receivables as of such date. "Delinquent Receivable" means a Receivable: (i) as to which any payment, or part thereof, remains unpaid for more than 60 days from the original due date for such Receivable and (ii) which is not a Defaulted Receivable. "Designated Obligor" means, at any time, each Obligor; provided, however, that any Obligor shall cease to be a Designated Obligor upon notice from the Agent to the Transferor and the Collection Agent, delivered at any time in good faith and based upon reasonable criteria. "Dilution Ratio" means, the ratio (expressed as a percentage) computed as of the last day of each calendar month by dividing (i) the aggregate amount of credits, rebates, discounts, disputes, warranty claims, repossessed or returned goods, charge back allowances and other dilutive factors, and any other billing or other adjustment by the Transferor or the Collection Agent, provided to Obligors in respect of Receivables during the preceding three months (including such month) by (ii) the aggregate Outstanding Balance of all Receivables which arose during the three month period commencing with the first day of the fourth preceding month and ending with the last day of the second preceding month. "Dilution Reserve" means, at any time, an amount equal to the product of (i) the highest Dilution Ratio as of the preceding six (6) months and (ii) the Net Investment at such time. "Discount" means, with respect to any Tranche Period: (TR x TNI x AD) 360 Where: 0104420.05-01S7a 11 TR = the Tranche Rate applicable to such Tranche Period. TNI = the portion of the Net Investment allocated to such Tranche Period. AD = the actual number of days during such Tranche Period. provided, however, that no provision of this Agreement shall require the payment or permit the collection of Discount in excess of the maximum amount permitted by applicable law; and provided, further, that Discount shall not be considered paid by any distribution if at any time such distribution is rescinded or must be returned for any reason. "Discount Reserve" means, at any time, an amount equal to: TD + LY Where: TD = the sum of the unpaid Discount for all Tranche Periods. LY = the Liquidation Yield "Early Collection Fee" means, for any Tranche Period (such Tranche Period to be determined without regard to the last sentence in Section 2.3(a) hereof) during which the portion of the Net Investment that was allocated to such Tranche Period is reduced for any reason whatsoever, the excess, if any, of (i) the additional Discount that would have accrued during such Tranche Period if such reductions had not occurred, minus (ii) the income, if any, received by the recipients of such reductions from investing the proceeds of such reductions. "Eligible Investments" means any of the following: (a) negotiable instruments or securities represented by instruments in bearer or registered or in book-entry form which evidence (i) obligations fully guaranteed by the United States of America; (ii) time deposits in, or bankers acceptances issued by, any depositary institution 0104420.05-01S7a 12 or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by Federal or state banking or depositary institution authorities; provided, however, that at the time of investment or contractual commitment to invest therein, the certificates of deposit or short-term deposits, if any, or long-term unsecured debt obligations (other than such obligation whose rating is based on collateral or on the credit of a Person other than such institution or trust company) of such deposi- tary institution or trust company shall have a credit rating from Moody's and S&P of at least "P-1" and "A-1", respectively, in the case of the certificates of deposit or short-term deposits, or a rating not lower than one of the two highest investment categories granted by Moody's and by S&P; (iii) certificates of deposit having, at the time of investment or contractual commitment to invest therein, a rating from Moody's and S&P of at least "P-1" and "A-1", respectively; or (iv) investments in money market funds rated in the highest investment category or otherwise approved in writing by the applicable rating agencies, (b) demand deposits in any depositary institution or trust company referred to in (a)(ii) above; (c) commercial paper (having original or remaining maturities of no more than 30 days) having, at the time of investment or contractual commitment to invest therein, a credit rating from Moody's and S&P of at least "P-1" and "A-1", respectively; (d) Eurodollar time deposits having a credit rating from Moody's and S&P of at least "P-1" and "A-1", respectively; and (e) repurchase agreements involving any of the Eligible Investments described in clauses (a)(i), (a)(iii) and (d) hereof so long as the other party to the repurchase agreement has at the time of investment therein, a rating from Moody's and S&P of at least "P-1" and "A-1", respectively. "Eligible Receivable" means, at any time, any Receivable: (i) which has been transferred by Tech Data to the Transferor and to which the Transferor has good title thereto, free and clear of all Adverse Claims; (ii) the Obligor of which is a United States resident, is a Designated Obligor 0104420.05-01S7a 13 at the time of the initial creation of an in- terest therein hereunder, is not an Affiliate of any of the parties hereto, and is not a government or a governmental subdivision or agency; (iii) which is not a Defaulted Receivable at the time of the initial creation of an interest therein hereunder; (iv) which is not a Delinquent Receivable at the time of the initial creation of an interest of the Company therein; (v) which, (A) arises pursuant to a Contract with respect to which each of the Seller and the Transferor has performed all obligations required to be performed by it thereunder, including without limitation ship- ment of the merchandise and/or the performance of the services purchased thereunder; (B) has been billed; and (C) according to the Contract related thereto, is required to be paid in full within 60 days of the original billing date therefor; (vi) which is an "eligible as- set" as defined in Rule 3a-7 under the Invest- ment Company Act of 1940, as amended; (vii) a purchase of which with the proceeds of Commercial Paper would consti- tute a "current transaction" within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended; (viii) which is an "account" with- in the meaning of Article 9 of the UCC of all applicable jurisdictions; (ix) which is denominated and payable only in United States dollars in the United States; (x) which, arises under a Con- tract that together with the Receivable related thereto, is in full force and effect and con- 0104420.05-01S7a 14 stitutes the legal, valid and binding obliga- tion of the related Obligor enforceable against such Obligor in accordance with its terms and, to the best knowledge of the Collection Agent or the Transferor is not subject to any litiga- tion, dispute, offset, counterclaim or other defense at such time; (xi) which, together with the Contract related thereto, does not contravene in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit bill- ing, fair credit reporting, equal credit oppor- tunity, fair debt collection practices and privacy) and with respect to which no part of the Contract related thereto is in violation of any such law, rule or regulation in any material respect; (xii) which (A) satisfies, in all material respects, all applicable requirements of the applicable Credit and Collection Policy and (B) is assignable; (xiii) which was generated in the ordinary course of Tech Data's business; and (xiv) the Obligor of which has been directed to make all payments to a speci- fied account of the Collection Agent with re- spect to which there shall be a Lock-Box Agreement in effect. "ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. "ERISA Affiliate" means, with respect to any Person, (i) any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code (as in effect from time to time, the "Code")) as such Person; (ii) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with 0104420.05-01S7a 15 such Person; or (iii) a member of the same affiliated service group (within the meaning of Section 414(n) of the Code) as such Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above. "Estimated Maturity Period" means, at any time, the period, rounded upward to the nearest whole number of days, equal to the weighted average number of days until due of the Receivables as calculated by the Collection Agent in good faith and set forth in the most recent Investor Report, such calculation to be based on the assumptions that (a) each Receivable within a particular aging category, (as set forth in the Investor Report) will be paid on the last day of such aging category and (b) the last day of the last such aging category coincides with the last date on which any Outstanding Balance of any Receivables would be written off as uncollectible or charged against any applicable reserve or similar account in accordance with the objective requirements of the Credit and Collection Policy and the Transferor's normal accounting practices applied on a basis consistent with those reflected in the Transferor's financial statements, provided, however, that if the Agent, the Company or any of the Bank Investors shall reasonably disagree with any such calculation, the Agent may recalculate the Estimated Maturity Period on the basis of such calculation at such time, and such recalculation, in the absence of manifest error, shall be conclusive. "Eurodollar Rate" means, with respect to any Eurodollar Tranche Period, a rate which is the Applicable Margin in excess of a rate per annum equal to the sum (rounded upwards, if necessary, to the next higher 1/100 of 1%) of (A) the rate obtained by dividing (i) the applicable LIBOR Rate by (ii) a percentage equal to 100% minus the reserve percentage used for determining the maximum reserve requirement as specified in Regulation D (including, without limitation, any marginal, emergency, supplemental, special or other reserves) that is applicable to the Agent during such Eurodollar Tranche Period in respect of eurocurrency or eurodollar funding, lending or liabilities (or, if more than one percentage shall be so applicable, the daily average of such percentage for those days in such Eurodollar Tranche Period during which any such percentage shall be applicable) plus (B) the then daily net annual assessment rate (rounded upwards, 0104420.05-01S7a 16 if necessary, to the nearest 1/100 of 1%) as estimated by the Agent for determining the current annual assessment payable by the Agent to the Federal Deposit Insurance Corporation in respect of eurocurrency or eurodollar funding, lending or liabilities. "Eurodollar Tranche" means a Tranche as to which Discount is calculated at the Eurodollar Rate. "Eurodollar Tranche Period" means, with respect to a Eurodollar Tranche, prior to the Termination Date, a period of up to one month requested by the Transferor and agreed to by the Company, NationsBank, on behalf of the Liquidity Provider, or the Agent, as the case may be, commencing on a Business Day requested by the Transferor and agreed to by the Company, NationsBank or the Agent, as applicable; provided, however, that if such Eurodollar Tranche Period would expire on a day which is not a Business Day, such Eurodollar Tranche Period shall expire on the next succeeding Business Day; provided, further, that if such Eurodollar Tranche Period would expire on (a) a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Eurodollar Tranche Period shall expire on the next preceding Business Day or (b) a Business Day for which there is no numerically corresponding day in the applicable subsequent calendar month, such Eurodollar Tranche Period shall expire on the last Business Day of such month. "Event of Bankruptcy", means, with respect to any Person, (i) that such Person (a) shall generally not pay its debts as such debts become due or (b) shall admit in writing its inability to pay its debts generally or (c) shall make a general assignment for the benefit of creditors; (ii) any proceeding shall be instituted by or against such Person seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property or (iii) if such Person is a corporation, such Person or any Subsidiary shall take any corporate action to autho- 0104420.05-01S7a 17 rize any of the actions set forth in the preceding claus- es (i) or (ii). "Facility Limit" means $306,000,000 provided that such amount may not at any time exceed the aggregate Commitments at any time in effect. "Fee Letter" means the letter agreement dated the date hereof between the Transferor, the Agent and the Company with respect to the fees to be paid by the Trans- feror hereunder, as amended, modified or supplemented from time to time. "Finance Charges" means, with respect to a Contract, any finance, interest, late or similar charges owing by an Obligor pursuant to such Contract. "Guaranty" means the agreement of guarantee of the Guarantor set forth in Article IX hereof. "Incremental Transfer" means a Transfer which is made pursuant to Section 2.2(a) hereof. "Indebtedness" means, with respect to any Person, such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property other than accounts payable arising in the ordinary course of such Person's business on terms customary in the trade, (iii) obligations, whether or not assumed, secured by liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) Capitalized Lease obligations and (vi) obligations for which such Person is obligated pursuant to a Guaranty. "Indemnified Amounts" has the meaning specified in Section 8.1 hereof. "Indemnified Parties" has the meaning specified in Section 8.1 hereof. "Interest Component" shall mean, (i) with respect to any Commercial Paper issued on an interest-bearing basis, the interest payable on such Commercial Paper at its maturity (including any dealer commissions) 0104420.05-01S7a 18 and (ii) with respect to any Commercial Paper issued on a discount basis, the portion of the face amount of such Commercial Paper representing the discount incurred in respect thereof (including any dealer commissions). "Investor Report" means a report, in substantially the form attached hereto as Exhibit E or in such other form as is mutually agreed to by the Transferor and the Agent, furnished by the Collection Agent pursuant to Section 2.11. "Law" means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any Official Body. "LIBOR Rate" means, with respect to any Euro- dollar Tranche Period, the rate at which deposits in dollars are offered to the Agent in the London interbank market at approximately 11:00 a.m. (London time) two Business Days before the first day of such Eurodollar Tranche Period in an amount approximately equal to the Eurodollar Tranche to which the Eurodollar Rate is to apply and for a period of time approximately equal to the applicable Eurodollar Tranche Period. "Liquidation Yield" means, at any time, an amount equal to: (RVF x LBR x NI) x (EM + CD) --------- 360 Where: RVF = the Rate Variance Factor; LBR = the Base Rate which is applicable to the liqui- dation period of the Net Investment at such time; NI = the Net Investment; EM = the Estimated Maturity Period of the Receiv- ables; and CD = the Collection Delay. 0104420.05-01S7a 19 "Liquidity Provider" means the Person or Persons who will provide liquidity support to the Company in connection with the issuance by the Company of Commercial Paper. "Liquidity Provider Agreement" means the agreement between the Company and the Liquidity Provider evidencing the obligation of the Liquidity Provider to provide liquidity support to the Company in connection with the issuance by the Company of Commercial Paper. "Lock-Box Account" means an account maintained by the Collection Agent at a Lock-Box Bank for the purpose of receiving Collections from Receivables. "Lock-Box Agreement" means an agreement between the Collection Agent and a Lock-Box Bank in substantially the form of Exhibit D hereto. "Lock-Box Bank" means each of the banks set forth in Exhibit C hereto and such banks as may be added thereto or deleted therefrom pursuant to Section 2.8 hereof. "Loss Percentage" means on any day the greater (i) 5 times the highest Loss-to-Liquidation Ratio as of the last day of the 12 months preceding the then current month, or (ii) 10 percent. "Loss Reserve" means, on any day, an amount equal to: LP x (NI + DLR + DR + SFR) Where: LP = the Loss Percentage at the close of business of the Collection Agent on such day; NI = the Net Investment at the close of business of the Collection Agent on such day; DLR = the Dilution Reserve at the close of business of the Collection Agent on such day; DR = the Discount Reserve at the close of business of the Collection Agent on such day; and 0104420.05-01S7a 20 SFR = the Servicing Fee Reserve at the close of business of the Collection Agent on such day. Notwithstanding the foregoing, the Loss Reserve shall at all times be at least equal to $25,000,000. "Loss-to-Liquidation Ratio" means, for any period of determination, the ratio (expressed as a percentage) computed as of the last day of each calendar month by dividing (i) the aggregate Outstanding Balance of all Receivables which became Defaulted Receivables during such period, by (ii) the aggregate amount of Collections received by the Collection Agent during such period less Deemed Collections for the period. "Majority Investors" shall have the meaning specified in Section 10.1(a) hereof. "Maximum Net Investment" means $300,000,000. "Maximum Percentage Factor" means 98%. "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding five years contributed to by the Trans- feror, or any ERISA Affiliate of the Transferor on behalf of its employees. "Net Asset Test" means, in connection with any assignment by the Company to the Bank Investors of an interest in the Net Investment pursuant to Section 10.7 hereof, that on the day immediately prior to the day on which such assignment is to take effect, the Net Receivables Balance shall be equal to or greater than the Net Investment. "Net Investment" means the sum of the cash amounts paid to the Transferor for each Incremental Transfer less the aggregate amount of Collections received and applied by the Agent to reduce such Net Investment pursuant to Section 2.5, 2.6 or 2.9 hereof; provided that the Net Investment shall be restored and reinstated in the amount of any Collections so received and applied if at any time the distribution of such 0104420.05-01S7a 21 Collections is rescinded or must otherwise be returned for any reason; and provided further that the Net Investment may be increased by the amount described in Section 10.7(d) as described therein. "Net Receivables Balance" means at any time the Outstanding Balance of the Eligible Receivables at such time reduced by the sum of (i) the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Designated Obligor exceeds the Concentration Factor for such Designated Obligor, plus (ii) the aggregate Outstanding Balance of all Eligible Receivables which are Defaulted Receivables, plus (iii) the aggregate Outstanding Balance of all Eligible Receivables which are Delinquent Receivables. "Obligations" shall have the meaning specified in Section 9.1. "Obligor" means a Person obligated to make payments for the provision of goods and services pursuant to a Contract. "Official Body" means any government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of any such government or political subdivision, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. "Other Transferor" means any Person other than the Transferor that has entered into a receivables purchase agreement or transfer and administration agreement with the Company. "Outstanding Balance" means, with respect to any Receivable at any time, the then outstanding principal amount thereof including any accrued and outstanding Finance Charges related thereto. "Percentage Factor" shall mean the fraction (expressed as a percentage) computed at any time of determination as follows: NI + LR + DLR + DR + SFR ------------------------ NRB Where: 0104420.05-01S7a 22 NI = the Net Investment at the time of such computa- tion; LR = the Loss Reserve at the time of such computa- tion; DLR = the Dilution Reserve at the time of such compu- tation; DR = the Discount Reserve at the time of such compu- tation; SFR = the Servicing Fee Reserve at the time of such computation; and NRB = the Net Receivables Balance at the time of such computation as reduced by the amount of all Deemed Collections. Notwithstanding the foregoing computation, the Percentage Factor shall not exceed one hundred percent (100%). The Percentage Factor shall be calculated by the Collection Agent on the day of the initial Incremental Transfer hereunder. Thereafter, until the Termination Date, the Collection Agent shall daily recompute the Percentage Factor and report such recomputations to the Agent monthly in the Investor Report or as reasonably otherwise requested by the Agent. The Percentage Factor shall remain constant from the time as of which any such computation or recomputation is made until the time as of which the next such recomputation shall be made, notwithstanding any additional Receivables arising, any Incremental Transfer made pursuant to Section 2.2(a) or any reinvestment Transfer made pursuant to Section 2.2(b) and 2.5 during any period between computations of the Percentage Factor. The Percentage Factor, as calculated at the close of business on the Business Day immediately preceding the Termination Date, shall remain constant at all times thereafter until such time as the Agent shall have received the Aggregate Unpaids, in cash, at which time the Percentage Factor shall be recomputed in accordance with Section 2.6. "Person" means any corporation, limited liabil- ity company, natural person, firm, joint venture, part- 0104420.05-01S7a 23 nership, trust, unincorporated organization, enterprise, government or any department or agency of any government. "Potential Termination Event" means an event which but for the lapse of time or the giving of notice, or both, would constitute a Termination Event. "Pro Rata Share" means, for a Bank Investor, the Commitment of such Bank Investor divided by the sum of the Commitments of all Bank Investors. "Proceeds" means "proceeds" as defined in Section 9.306(1) of the UCC. "Program Fee" means the fee payable by the Transferor to the Company pursuant to Section 2.7 hereof, the terms of which are set forth in the Fee Letter. "Purchase Agreement" means the Receivables Purchase Agreement dated as of December 21, 1993, between Tech Data and the Transferor, as the same may be amended, supplemented or otherwise modified. "Purchase Termination Date" means the date upon which the Transferor shall cease, for any reason whatsoever, to make purchases of Receivables from Tech Data under the Purchase Agreement or the Purchase Agreement shall terminate for any reason whatsoever. "Purchased Interest" means the interest in the Receivables acquired by the Liquidity Provider through purchase pursuant to the terms of the Liquidity Provider Agreement. "Rate Variance Factor" means the number, computed from time to time in good faith by the Agent, that reflects the largest potential variance (from minimum to maximum) in selected interest rates over a period of time selected by the Agent from time to time, set forth in a written notice by the Agent to the Transferor and the Collection Agent. "Receivable" means the indebtedness owed to the Transferor by any Obligor (without giving effect to any purchase hereunder by the Company at any time) under a Contract whether constituting an account, chattel paper, instrument or general intangible, arising in connection 0104420.05-01S7a 24 with the sale of merchandise or services by Tech Data and thereafter transferred to the Transferor by Tech Data, and includes the right to payment of any Finance Charges and other obligations of such Obligor with respect thereto. Notwithstanding the foregoing, once a Receivable has been deemed collected pursuant to Section 2.9 hereof, it shall no longer constitute a Receivable hereunder. "Records" means all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) maintained with respect to Receivables and the related Obligors. "Reinvestment Termination Date" means the second Business Day after the delivery by the Company to the Transferor of written notice that the Company elects to commence the amortization of its interest in the Net Investment or otherwise liquidate its interest in the Transferred Interest. "Related Commercial Paper" shall mean Commercial Paper issued by the Company the proceeds of which were used to acquire, or refinance the acquisition of, an interest in Receivables with respect to the Transferor. "Related Security" means with respect to any Receivable, all of the Transferor's rights, title and interest in, to and under: (i) all of the Transferor's interest, if any, in the merchandise (including returned or repossessed merchandise), if any, the sale of which by the Transferor gave rise to such Receivable; (ii) all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements signed by an Obligor describing any collateral securing such Receivable; 0104420.05-01S7a 25 (iii) all guarantees, indemnities, warranties, insurance (and proceeds and premium refunds thereof) or other agreements or arrangements of any kind from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise; (iv) all Records related to such Receivable; and (v) all rights and remedies of the Transferor under the Receivables Purchase Agreement, together with all financing statements filed by the Transferor against the Seller in connection therewith; and (vi) all Proceeds of any of the foregoing. "Section 8.2 Costs" has the meaning specified in Section 8.2(d) hereof. "Seller" means Tech Data Corporation, a Florida corporation. "Servicing Fee" means the fees payable by the Company or the Bank Investors to the Collection Agent, with respect to a Tranche, in an amount equal to .75% per annum on the amount of the Net Investment allocated to such Tranche pursuant to Section 2.3. Such fee shall accrue from the date of the initial purchase of an interest in the Receivables to the later of the Termination Date or the date on which the Net Investment is reduced to zero. On or prior to the Termination Date, such fee shall be payable only from Collections pursuant to, and subject to the priority of payments set forth in, Section 2.5 hereof. After the Termination Date, such fee shall be payable only from Collections pursuant to, and subject to the priority of payments set forth in, Section 2.6 hereof. "Servicing Fee Reserve" means at any time the sum of (i) the Servicing Fee for all Tranches and (ii) an amount equal to the product of (A) the Net Investment at such time, and (B) the Servicing Fee percentage and (C) a fraction having as the numerator, the sum of the Estimat- 0104420.05-01S7a 26 ed Maturity Period and the Collection Delay and as the denominator, 360. "Standard & Poor's" or "S&P" means Standard & Poor's Ratings Services, a division of McGraw-Hill Companies, Inc. "Subsidiary" of a Person means any corporation more than 50% of the outstanding voting interests of which shall at any time be owned or controlled, directly or indirectly, by such Person or by one or more Subsidiaries of such Person or any similar business organization which is so owned or controlled. "Termination Date" means the earliest of (i) that Business Day designated by the Transferor to the Agent as the Termination Date at any time following 60 days' written notice to the Agent, (ii) the date of termination of the commitment of the Liquidity Provider under the Liquidity Provider Agreement, (iii) the date of termination of the commitment of the Credit Support Provider under the Credit Support Agreement, (iv) the day upon which a Termination Date is declared or automatically occurs pursuant to Section 7.2(a) hereof, (v) December 31, 1997 unless extended for any additional period by consent of Tech Data, the Company, the Transferor and the Agent upon notice given by the Company to Tech Data and the Transferor at least 60 days prior to such date, (vi) two Business Days prior to the Commitment Termination Date, (vi) the day on which a Reinvestment Termination Date shall occur, or (vii) the Purchase Termination Date. "Termination Event" means an event described in Section 7.1 hereof. "Tranche" means a portion of the Net Investment allocated to a Tranche Period pursuant to Section 2.3 hereof. "Tranche Period" means a CP Tranche Period, a BR Tranche Period, a CD Tranche Period or a Eurodollar Tranche Period. "Tranche Rate" means the CP Rate, the Base Rate, the CD Rate or the Eurodollar Rate. 0104420.05-01S7a 27 "Transaction Documents" means, collectively, this Agreement, the Purchase Agreement, the Fee Letter, the Lock-Box Agreements, the Certificates, the Transfer Certificates and all of the other instruments, documents and other agreements executed and delivered by Tech Data or the Transferor in connection with any of the foregoing, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time. "Transfer" means a conveyance, transfer and assignment by the Transferor to the Company or the Bank Investors of an undivided percentage ownership interest in Receivables hereunder (including, without limitation, as a result of any reinvestment of Collections in Transferred Interests pursuant to Section 2.2(b) and 2.5 hereof). "Transfer Certificate" has the meaning speci- fied in Section 2.2(a) hereof. "Transfer Date" means, with respect to each Transfer, the Business Day on which such Transfer is made. "Transfer Price" means with respect to any Incremental Transfer, the amount paid to the Transferor by the Company or the Bank Investors as described in the applicable Transfer Certificate. "Transferor" means Tech Data Finance, Inc., a California corporation, and its successors and permitted assigns. "Transferred Interest" means, at any time of determination, an undivided percentage ownership interest in (i) each and every then outstanding Receivable, (ii) all Related Security with respect to each such Receivable, (iii) all Collections with respect thereto, and (iv) other Proceeds of the foregoing, which undivided ownership interest shall be equal to the Percentage Factor at such time, and only at such time (without regard to prior calculations). The Transferred Interest in each Receivable, together with Related Security, Collections and Proceeds with respect thereto, shall at all times be equal to the Transferred Interest in each other Receivable, together with Related Security, Collections and Proceeds with respect thereto. To the extent that 0104420.05-01S7a 28 the Transferred Interest shall decrease as a result of a recalculation of the Percentage Factor, the Company or the Bank Investors, as applicable, shall be considered to have reconveyed to the Transferor an undivided percentage ownership interest in each Receivable, together with Related Security, Collections and Proceeds with respect thereto, in an amount equal to such decrease such that in each case the Transferred Interest in each Receivable shall be equal to the Transferred Interest in each other Receivable. "UCC" means, with respect to any state, the Uniform Commercial Code as from time to time in effect in such state. "Unpaid Balance" means, at any time, with respect to any Receivable, the outstanding principal amount of the indebtedness of the related Obligor incurred in connection with a particular purchase under or evidenced by such Receivable, exclusive of any sales or other tax, if any, included in or payable with respect to such purchase. "Unused Facility Fee" means the fee payable by the Transferor to the Company pursuant to Section 2.7 hereof, the terms of which are set forth in the Fee Letter. SECTION 1.2. Other Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9. SECTION 1.3. Computation of Time Periods. Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including", the words "to" and "until" each means "to but excluding" and the word "within" means "from and excluding a specified date and to and including a later specified date". 0104420.05-01S7a 29 ARTICLE II PURCHASES AND SETTLEMENTS SECTION 2.1. Facility. Upon the terms and subject to the conditions herein set forth, (x) the Transferor may, at its option, convey, transfer and assign to the Agent, on behalf of the Company or the Agent, on behalf of the Bank Investors, as applicable, and (y) the Agent, on behalf of the Company may, provided that the Termination Date shall not have occurred, at its option, or the Agent on behalf of the Bank Investors, provided that the Termination Date shall not have occurred and that the Bank Investors shall have previously accepted the assignment by the Company of all of its interest in the Affected Assets, shall, if so requested, accept such conveyance, transfer and assignment from the Transferor of, without recourse except as provided herein, undivided percentage ownership interests in the Receivables, together with Related Security, Collections and Proceeds with respect thereto, from time to time. By accepting any conveyance, transfer and assignment hereunder, neither the Company, any Bank Investor nor the Agent assumes or shall have any obligations or liability under any of the Contracts, all of which shall remain the obligations and liabilities of the Transferor and the Seller. SECTION 2.2. Transfers; Certificates; Eligible Receivables. (a) Incremental Transfers. Upon the terms and subject to the conditions herein set forth the Trans- feror may, at its option, convey, transfer and assign to the Agent on behalf of the Company or the Bank Investors, as applicable, and the Agent, on behalf of the Company may, provided that the Termination Date shall not have occurred, at its option, or the Agent on behalf of the Bank Investors, provided that the Termination Date shall not have occurred and that the Bank Investors shall have previously accepted the assignment by the Company of all of its interest in the Affected Assets, shall, if so re- quested by the Transferor, accept such conveyance, trans- fer and assignment from the Transferor, without recourse except as provided herein, undivided percentage ownership interests in the Receivables, together with Related Security, Collections and Proceeds with respect thereto (each, an "Incremental Transfer"); provided that after 0104420.05-01S7a 30 giving effect to the payment to the Transferor of such Transfer Price (x) the sum of the Net Investment plus, in the case where the Transferred Interest is held by the Company, the Interest Component of all outstanding Related Commercial Paper, would not exceed the Facility Limit and (y) the Net Investment would not exceed the Maximum Net Investment; and, provided further, that the representations and warranties set forth in Section 3.1 shall be true and correct both immediately before and immediately after giving effect to any such Incremental Transfer and the payment to the Transferor of the Transfer Price related thereto and an Investor Report shall have been delivered with respect to such Incremental Transfer as required by Section 3.2 hereof. The Transferor shall, by notice to the Agent given by telecopy, offer to convey, transfer and assign to the Agent, on behalf of the Company or the Bank Investors, as applicable, undivided percentage ownership interests in the Receivables and the other Affected Assets relating thereto at least three (3) Business Days prior to the proposed date of any Incremental Transfer. Each such notice shall specify (w) whether such request is made to the Agent on behalf of the Company or to the Agent on behalf of the Bank Investors (it being understood and agreed that once the Bank Investors acquire any Transferred Interest hereunder, the Bank Investors shall be required to purchase all Transferred Interests held by the Company in accordance with Section 10.7 and thereafter the Company shall no longer accept any additional Incremental Transfers hereunder), (x) the desired Transfer Price (which shall be at least $5,000,000 or integral multiples of $1,000,000 in excess thereof) or, to the extent that the then available unused portion of the Facility Limit is less than such amount, such lesser amount equal to such available portion of the Facility Limit), (y) the desired date of such Incremental Transfer and (z) the desired Tranche Period(s) and allocations of the Net Investment of such Incremental Transfer thereto as required by Section 2.3. The Agent will promptly notify the Company or each of the Bank Investors, as the case may be, of the Agent's receipt of any request for an Incremental Transfer to be made to such Person. To the extent that any such Incremental Transfer is requested of the Company, the Company shall accept or reject such offer by notice given to the Transferor and the Agent by telephone or telecopy by no later than the close of its 0104420.05-01S7a 31 business on the Business Day following its receipt of any such request. Each notice of proposed Transfer shall be irrevocable and binding on the Transferor and the Trans- feror shall indemnify the Company and each Bank Investor against any loss or expense incurred by the Company or any Bank Investor, either directly or through the Liquidity Provider Agreement) as a result of any failure by the Transferor to complete such Incremental Transfer including, without limitation, any loss (including loss of anticipated profits) or expense incurred by the Company or any Bank Investor, either directly or pursuant to the Liquidity Provider Agreement by reason of the liquidation or reemployment of funds acquired by the Company (or the Liquidity Provider) or any Bank Investor (including, without limitation, funds obtained by issuing commercial paper or promissory notes or obtaining deposits as loans from third parties) for the Company or any Bank Investor to fund such Incremental Transfer. On the date of the initial Incremental Transfer, the Agent, on behalf of the Company or the Bank Investors, as applicable, shall deliver written confirmation to the Transferor of the Transfer Price, the Tranche Period(s) and the Tranche Rate(s) relating to such Transfer and the Transferor shall deliver to the Agent the Transfer Certificate in the form of Exhibit F hereto (the "Transfer Certificate"). The Agent shall indicate the amount of the initial Incremental Transfer together with the date thereof on the grid attached to the Transfer Certificate. On the date of each subsequent Incremental Transfer, the Agent shall send written confirmation to the Transferor of the Transfer Price, the Tranche Period(s), the Transfer Date and the Tranche Rate(s) applicable to such Incremental Transfer. The Agent shall indicate the amount of the Incremental Transfer together with the date thereof as well as any decrease in the Net Investment on the grid attached to the Transfer Certificate. The Transfer Certificate shall evidence the Incremental Transfers. Following each Incremental Transfer, the Agent shall deposit to the Transferor's account at the location indicated in Section 11.3 hereof, in immediately available funds, an amount equal to the Transfer Price for such Incremental Transfer made to the Company or the Bank Investors, as applicable. By no later than 11:00 a.m. (New York time) on any Transfer Date, the Company or each Bank Investor, as 0104420.05-01S7a 32 the case may be, shall remit its share (which, in the case of an Incremental Transfer to the Bank Investors, shall be equal to such Bank Investor's Pro Rata Share) of the aggregate Transfer Price for such Transfer to the account of the Agent specified therefor from time to time by the Agent by notice to such Persons. The obligation of each Bank Investor to remit its Pro Rata Share of any such Transfer Price shall be several from that of each other Bank Investor, and the failure of any Bank Investor to so make such amount available to the Agent shall not relieve any other Bank Investor of its obligation hereunder. Following each Incremental Transfer and the Agent's receipt of funds from the Company or the Bank Investors as aforesaid, the Agent shall remit the Transfer Price to the Transferor's account at the location indicated in Section 11.3 hereof, in immediately available funds, an amount equal to the Transfer Price for such Incremental Transfer. Unless the Agent shall have received notice from the Company or any Bank Investor, as applicable, that such Person will not make its share of any Transfer Price relating to any Incremental Transfer available on the applicable Transfer Date therefor, the Agent may (but shall have no obligation to) make the Company's or any such Bank Investor's share of any such Transfer Price available to the Transferor in anticipation of the receipt by the Agent of such amount from the Company or such Bank Investor. To the extent the Company or any such Bank Investor fails to remit any such amount to the Agent after any such advance by the Agent on such Transfer Date, the Company or such Bank Investor, on the one hand, and the Transferor, on the other hand, shall be required to pay such amount, together with interest thereon at a per annum rate equal to the Federal funds rate (as determined in accordance with clause (ii) of the definition of "Base Rate"), in the case of the Company or any such Bank Investor, or the Base Rate, in the case of the Transferor, to the Agent upon its demand therefor (provided that the Company shall have no obligation to pay such interest amounts except to the extent that it shall have sufficient funds to pay the face amount of its Commercial Paper in full). Until such amount shall be repaid, such amount shall be deemed to be Net Investment paid by the Agent and the Agent shall be deemed to be the owner of a Transferred Interest hereunder. Upon the payment of such amount to the Agent (x) by the Transfer- or, the amount of the aggregate Net Investment shall be reduced by such amount or (y) by the Company or such Bank 0104420.05-01S7a 33 Investor, such payment shall constitute such Person's payment of its share of the applicable Transfer Price for such Transfer. (b) Reinvestment Transfers. On each Business Day occurring after the initial Incremental Transfer hereunder and prior to the Termination Date, the Transferor hereby agrees to convey, transfer and assign to the Agent, on behalf of the Company or the Bank Investors then owning any Transferred Interests, and in consideration of Transferor's agreement to maintain at all times prior to the Termination Date a Net Receivables Balance in an amount at least sufficient to maintain the Percentage Factor at an amount not greater than the Maximum Percentage Factor, the Agent on behalf of the Company may, and the Agent on behalf of the Bank Investors shall (in either case, to the extent such Persons then own any Transferred Interest), agrees to purchase from the Transferor undivided percentage ownership interests in each and every Receivable, together with Related Security, Collections and Proceeds with respect thereto, to the extent that Collections are available for such Transfer in accordance with Section 2.5 hereof, such that after giving effect to such Transfer, (i) the amount of the Net Investment at the close of business on such Business Day shall be equal to the amount of the Company's Net Investment at the close of the business on the Business Day immediately preceding such Business Day plus the Transfer Price of any Incremental Transfer made on such day, if any, and (ii) the Transferred Interest in each Receivable, together with Related Security, Collections and Proceeds with respect thereto, shall be equal to the Transferred Interest in each other Receivable, together with Related Security, Collections and Proceeds with respect thereto. (c) All Transfers. Each Transfer shall constitute a purchase by the Agent on behalf of the Company or the Bank Investors, as applicable, of undivided percentage ownership interests in each and every Receivable, together with Related Security, Collections and Proceeds with respect thereto, then existing, as well as in each and every Receivable, together with Related Security, Collections and Proceeds with respect thereto, which arises at any time after the date of such Transfer. The Agent's aggregate undivided percentage ownership interest in the Receivables, together with the Related 0104420.05-01S7a 34 Security, Collections and Proceeds with respect thereto, held on behalf of the Company or the Bank Investors, as applicable, shall equal the Percentage Factor in effect from time to time. So long as the Agent on behalf of either the Company, on the one hand, or the Bank Investors, on the other hand, owns all of the Transferred Interests at such time, each of the Company's and each Bank Investor's undivided percentage ownership interest in the Affected Assets shall equal such Person's ratable share (determined on the basis of the relationship that such Person's Net Investment bears to the aggregate Net Investment of the Company and all of the Bank Investors at such time) of the Percentage Factor at such time. (d) Certificate. The Transferor shall issue to the Agent the Certificate, in the form of Exhib- it M, on or prior to the date hereof. (e) Percentage Factor. The Percentage Factor shall be initially computed as of the opening of business of the Collection Agent on the date of the initial Incremental Transfer hereunder. Thereafter until the Termination Date, the Percentage Factor shall be automatically recomputed as of the close of business of the Collection Agent on each day (other than a day after the Termination Date). The Percentage Factor shall remain constant from the time as of which any such computation or recomputation is made until the time as of which the next such recomputation, if any, shall be made. The Percentage Factor, as computed as of the day immediately preceding the Termination Date shall remain constant at all times on and after the Termination Date until the date on which the Net Investment has been reduced to zero, and all accrued Discount and Servicing Fees have been paid in full and all other Aggregate Unpaids have been paid in full. SECTION 2.3. Selection of Tranche Periods and Tranche Rates. (a) At all times hereafter, but prior to the occurrence of a Termination Event and not with respect to any portion of the transferred Interest held by the Bank Investors (or any of them), the Transferor may, subject to the Company's approval and the limitations described below, request Tranche Periods and allocate a portion of the Net Investment to each selected Tranche 0104420.05-01S7a 35 Period, so that the aggregate amounts allocated to outstanding Tranche Periods at all times shall equal the Net Investment held by the Company. The Transferor shall give the Company irrevocable notice by telephone of the new requested Tranche Period(s) and whether the requested Tranche Rate applicable thereto shall be the CP Rate, the BR Rate, the CD Rate or the Eurodollar Rate at least (i) three (3) Business Days prior to the expiration of any then existing Tranche Period if the Tranche Rate to be applicable to the new requested Tranche Period shall be the Eurodollar Rate, (ii) two (2) Business Days prior to the expiration of any then existing Tranche Period if the Tranche Rate to be applicable to the new requested Tranche Period shall be the BR Rate or the CD Rate, and (iii) one (1) Business Day prior to the expiration of any then existing Tranche Period if the Tranche Rate to be applicable to the new requested Tranche Period shall be the CP Rate; provided, however, that the Company may select, in its reasonable discretion, any such new Tranche Period and Tranche Rate if (i) the Transferor fails to provide such notice on a timely basis or (ii) the Company determines, in its reasonable discretion, that the Tranche Rate or Tranche Period requested by the Transferor is unavailable or for any reason commercially undesirable. The Company confirms that it is its intention to allocate all or substantially all of the Net Investment held by it to one or more CP Tranche Periods; provided that the Company may determine from time to time, in its sole discretion, that funding such Net Investment by means of one or more CP Tranche Periods is not desirable for any reason. If the Liquidity Provider acquires from the Company a Purchased Interest with respect to the Receivables pursuant to the terms of the Liquidity Provider Agreement, NationsBank, on behalf of the Liquidity Provider, may exercise the right of selection granted to the Company hereby. The initial Tranche Period applicable to any such Purchased Interest shall be a period of not greater than 14 days. In the case of any Tranche Period outstanding upon the occurrence of a Termination Event, such Tranche Period shall end on such date. (b) After a Termination Event; Trans- ferred Interest Held by Company. At all times on and after the occurrence of a Termination Event, with respect to any portion of the Transferred Interest which shall not have been transferred to the Bank Investors (or any 0104420.05-01S7a 36 of them), the Company or NationsBank, as applicable, shall select all Tranche Periods and Tranche Rates applicable thereto. (c) Prior to a Termination Event; Trans- ferred Interest Held by Bank Investor. At all times with respect to any portion of the Transferred Interest transferred to the Bank Investors (or any of them) pursuant to Section 10.7, but prior to the occurrence of a Termination Event, the initial Tranche Period applicable to such portion of the Net Investment allocable thereto shall be a period of not greater than 14 days and such Tranche shall be a BR Tranche. Thereafter, with respect to such portion, and with respect to any other portion of the Transferred Interest held by the Bank Investors (or any of them), provided that a Termination Event shall not have occurred, the Tranche Period applicable thereto shall be, at the Transferor's option, either a BR Tranche, a CD Tranche or a Eurodollar Tranche. The Transferor shall give the Agent irrevocable notice by telephone of the new requested Tranche Period at least three (3) Business Days prior to the expiration of any then existing Tranche Period. In the case of any Tranche Period outstanding upon the occurrence of a Termination Event, such Tranche Period shall end on the date of such occurrence. (d) After a Termination Event; Trans- ferred Interest Held by Bank Investor. At all times on and after the occurrence of a Termination Event, with respect to any portion of the Transferred Interest which shall have been owned or transferred to the Bank Investors (or any of them), the Agent shall select all Tranche Periods and Tranche Rates applicable thereto. (e) Eurodollar Rate Protection; Illegali- ty. (i) If the Agent is unable to obtain on a timely basis the information necessary to determine the LIBOR Rate for any proposed Eurodollar Tranche, then (A) the Agent shall forthwith notify the Company or Bank Investors, as applicable and the Transferor that the Eurodollar Rate cannot be determined for such Eurodollar Tranche, and (B) while such circumstances exist, neither the Company, the Bank Investors or the Agent shall 0104420.05-01S7a 37 allocate the Net Investment of any additional Transferred Interests purchased during such period or reallocate the Net Investment allocated to any then existing Tranche ending during such period, to a Eurodollar Tranche. (ii) If, with respect to any outstanding Eurodollar Tranche, the Company or any of the Bank Investors owning any Transferred Interest therein notifies the Agent that it is unable to obtain matching deposits in the London interbank market to fund its purchase or maintenance of such Transferred Interest or that the Eurodol- lar Rate applicable to such Transferred Interest will not adequately reflect the cost to the Person of funding or maintaining its respective Transferred Interest for such Tranche Period then the Agent shall forthwith so notify the Transferor, whereupon neither the Agent nor the Company or the Bank Investors, as applicable, shall, while such circumstances exist, allocate any Net Investment of any additional Transferred Interest purchased during such period or reallocate the Net Interest allocated to any Tranche Period ending during such period, to a Eurodollar Tranche. (iii) Notwithstanding any other provision of this Agreement, if the Company or any of the Bank Investors, as applicable, shall notify the Agent that such Person has determined (or has been notified by any Liquidity Provider) that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful (either for the Company, such Bank Investor, or such Liquidity Provider, as applicable), or any central bank or other governmental authority asserts that it is unlawful, for the Company, such Bank Investor or such Liquidity Provider, as applicable, to fund the purchases or maintenance of Transferred Interests at the Eurodollar Rate, then (x) as of the effective date of such notice from such Person to the Agent, the obligation or ability of the Company or such Bank Investor, as applicable, to fund its purchase or maintenance of Transferred Interests at the Eurodollar Rate shall be suspended until such Person notifies the Agent that the circumstances causing such suspension no longer exist and (y) the Net Investment of each Eurodollar Tranche in which such Person owns an interest shall either (1) if such Person may lawfully continue to maintain such Transferred Interest at the Eurodollar Rate until the last day of the 0104420.05-01S7a 38 applicable Tranche Period, be reallocated on the last day of such Tranche Period to another Tranche Period in respect of which the Net Investment allocated thereto accrues Discount at a Tranche Rate other than the Euro- dollar Rate or (2) if such Person shall determine that it may not lawfully continue to maintain such Transferred Interest at the Eurodollar Rate until the end of the applicable Tranche Period, such Person's share of the Net Investment allocated to such Eurodollar Tranche shall be deemed to accrue Discount at the Base Rate from the effective date of such notice until the end of such Tranche Period. SECTION 2.4. Discount, Fees and Other Costs and Expenses. Notwithstanding the limitation on recourse under Section 2.1 hereof, the Transferor shall pay, as and when due in accordance with this Agreement, all fees hereunder, all amounts payable pursuant to Article VIII hereof, if any, and the Servicing Fees. On the last day of each Tranche Period, the Transferor shall pay to the Agent, on behalf of the Company, in the event the Transferred Interest is held by the Company, an amount equal to the discount accrued on the Company's Commercial Paper to the extent such Commercial Paper was issued in order to fund the Transferred Interest in an amount in excess of the Transfer Price of an Incremental Transfer, which excess amount shall not exceed $5,000. The Transferor shall pay to the Agent, on behalf of the Company, each day on which Commercial Paper is issued by the Company, the Dealer Fee. Discount shall accrue with respect to each Tranche on each day occurring during the Tranche Period related thereto. Nothing in this Agreement shall limit in any way the obligations of the Transferor to pay the amounts set forth in this Section 2.4. SECTION 2.5. Non-Liquidation Settlement and Reinvestment Procedures. On each day after the date of any Incremental Transfer but prior to the Termination Date and provided that no Potential Termination Event for which there is no grace period shall have occurred and be continuing, the Collection Agent shall out of the Percentage Factor of Collections received on or prior to such day and not previously applied or accounted for: (i) set aside and hold in trust for the Company or the Bank Investors, as applicable (or deposit into the Collection Account if so required pursuant to Section 2.12 hereof) an amount equal to all Discount and the Servicing 0104420.05-01S7a 39 Fee accrued through such day and not so previously set aside or paid and (ii) apply the balance of such Percentage Factor of Collections remaining after application of Collections as provided in clause (i) of this Section 2.5 to the Transferor, for the benefit of the Company or the Bank Investors, as applicable, to the purchase of additional undivided percentage interests in each Receivable pursuant to Section 2.2(b) hereof. On the last day of each Tranche Period, from the amounts set aside as described in clause (i) of the first sentence of this Section 2.5, the Collection Agent shall deposit to the Agent's account, for the benefit of the Company or the Bank Investors, as applicable, an amount equal to the accrued and unpaid Discount for such Tranche Period and shall deposit to its own account an amount equal to the accrued and unpaid Servicing Fee for such Tranche Period. The Agent, upon its receipt of such amounts in the Agent's account, shall distribute such amounts to the Company and/or the Bank Investors entitled thereto as set forth above; provided that if the Agent shall have insufficient funds to pay all of the above amounts in full on any such date, the Agent shall pay such amounts ratably (based on the amounts owing to each such Person) to all such Persons entitled to payment thereof. In addition, the Collection Agent shall remit to the Transferor at the end of each Tranche Period, as provided in Section 6.2(b), such portion of Collections not allocated to the Company and the Bank Investors. SECTION 2.6. Liquidation Settlement Procedures. If at any time on or prior to the Termination Date, the Percentage Factor is greater than the Maximum Percentage Factor, then the Transferor shall immediately pay to the Agent, for the benefit of the Company or the Bank Investors, as applicable, from previously received Collections, an amount equal to the amount such that, when applied in reduction of the Net Investment, will result in a Percentage Factor less than or equal to the Maximum Percentage Factor. Such amount shall be applied to the reduction of the Net Investment of Tranche Periods selected by the Agent. On the Termination Date and on each day thereafter, and on each day on which a Potential Termination Event has occurred and is continuing, the Collection Agent shall set aside and hold in trust for the Company or the Bank Investors, as applicable (or deposit into the Collection Account if so required pursuant to Section 2.12 hereof) the Percentage Factor of all 0104420.05-01S7a 40 Collections received on such day and shall set aside and hold in trust for the Transferor such portion of Collections not allocated to the Company or the Bank Investors, as applicable. On the Termination Date or the day on which a Potential Termination Event for which there is no grace period occurs, the Collection Agent shall deposit to the Agent's account, for the benefit of the Company or the Bank Investors, as applicable, any amounts set aside pursuant to Section 2.5 above. On the last day of each Tranche Period to occur on or after the Termination Date or during the continuance of a Potential Termination Event, the Collection Agent shall deposit to the Agent's account to the extent not already so deposited, for the benefit of the Company or the Bank Investors, as applicable, the amounts so set aside for the Company or the Bank Investors pursuant to the second preceding sentence, but not to exceed the sum of (i) the accrued Discount for such Tranche Period, (ii) the portion of the Net Investment allocated to such Tranche Period, and (iii) all other Aggregate Unpaids. On such day, the Collection Agent shall deposit to its account, from the amounts set aside for the Company and the Bank Investors pursuant to the preceding sentence which remain after payment in full of the aforementioned amounts, the accrued Servicing Fee for such Tranche Period. If there shall be insufficient funds on deposit for the Collection Agent to distribute funds in payment in full of the aforementioned amounts, the Collection Agent shall distribute funds first, in payment of the accrued Discount, second, in payment of all fees payable by the Transferor, third, if the Trans- feror, Tech Data or any Affiliate of the Transferor or Tech Data is not then the Collection Agent, to the Collection Agent's account, in payment of the Servicing Fee payable to the Collection Agent, fourth, in reduction of the Net Investment allocated to any Tranche Period ending on such date, fifth, in payment of all other Aggregate Unpaids and sixth, if the Transferor, Tech Data or any Affiliate of the Transferor or Tech Data is the Collection Agent, to its account as Collection Agent, in payment of the Servicing Fee payable to such Person as Collection Agent. The Agent, upon its receipt of such amounts in the Agent's account, shall distribute such amounts to the Company and/or the Bank Investors entitled thereto as set forth above; provided that if the Agent shall have insufficient funds to pay all of the above amounts in full on any such date, the Agent shall pay such amounts in the order of priority set forth above 0104420.05-01S7a 41 and, with respect to any such category above for which the Agent shall have insufficient funds to pay all amounts owing on such date, ratably (based on the amounts in such categories owing to such Persons) among all such Persons entitled to payment thereof. Following the date on which the Net Investment has been reduced to zero, all accrued Discount and Servicing Fees have been paid in full and all other Aggregate Unpaids have been paid in full, (i) the Collection Agent shall recompute the Percentage Factor, (ii) the Agent, on behalf of the Company and the Bank Investors, shall be considered to have reconveyed to the Transferor all of the Company's and the Bank Investors' right, title and interest in and to the Affected Assets (including the Transferred Interest), (iii) the Collection Agent shall pay to the Transferor any remaining Collections set aside and held by the Collection Agent pursuant to the third sentence of this Section 2.6 and (iv) the Agent, on behalf of the Company and the Bank Investors, shall execute and deliver to the Transferor, at the Transferor's expense, such documents or instruments as are necessary to terminate the Company's and the Bank Investors' respective interests in the Affected Assets. Any such documents shall be prepared by or on behalf of the Trans- feror. On the last day of each Tranche Period, the Collection Agent shall remit to the Transferor such portion of Collections set aside for the Transferor pursuant to this Section 2.6. SECTION 2.7. Fees. Notwithstanding any limitation on recourse contained in this Agreement, the Transferor shall pay, on the last day of each month, to the Agent, for distribution to the Company and/or the Bank Investors, as agreed between themselves, the Program Fee and the Unused Facility Fee. The Transferor acknowledges that the foregoing fees are non-refundable. SECTION 2.8. Protection of Ownership Interest of the Company and the Bank Investors. (a) The Transferor agrees that it will, and will cause the Seller to, from time to time, at its expense, it will promptly execute and deliver all instruments and documents and take all actions as may be necessary or as the Agent may reasonably request in order to perfect or protect the Transferred Interest or to enable the Agent, the Company or the Bank Investors to exercise or enforce any of their 0104420.05-01S7a 42 respective rights hereunder. Without limiting the foregoing, the Transferor will, and will cause the Seller to, upon the reasonable request of the Agent, the Company or any of the Bank Investors, in order to accurately reflect this purchase and sale transaction, (x) execute and file such financing or continuation statements or amendments thereto or assignments thereof (as permitted pursuant to Section 11.6 hereof) as may be requested by the Agent, the Company or any of the Bank Investors and (y) mark its and the Seller's respective master data processing records and other documents with a legend describing (i) in the case of the Seller, the conveyance to the Transferor and (ii) in the case of the Transferor, the conveyance to the Agent, for the benefit of the Company and the Bank Investors, of the Transferred Interest. The Transferor shall, and will cause the Seller to, upon the reasonable request of the Agent, the Company or any of the Bank Investors, obtain such additional search reports as the Agent, the Company or any of the Bank Investors shall request. To the fullest extent permitted by applicable law, the Agent shall be permitted to sign and file continuation statements and amendments thereto and assignments thereof without the Transferor's or the Seller's signature. Carbon, photographic or other reproduction of this Agreement or any financing statement shall be sufficient as a financing statement. The Transferor shall not, and shall not permit the Seller to, change its respective name, identity or corporate structure (within the meaning of Section 9-402(7) of the UCC as in effect in the States of New York and California) nor relocate its respective chief executive office or any office where Records are kept unless it shall have: (i) given the Agent at least thirty (30) days prior notice thereof and (ii) prepared at Transferor's expense and delivered to the Agent all financing statements, instruments and other documents necessary to preserve and protect the Transferred Interest or requested by the Agent in connection with such change or relocation. Any filings under the UCC or otherwise that are occasioned by such change in name or location shall be made at the expense of Trans- feror. (b) The Collection Agent shall instruct all Obligors to cause all Collections to be deposited directly with a Lock-Box Bank. Any Lock-Box Account maintained by a Lock-Box Bank pursuant to the related Lock-Box Agreement shall be under the exclusive ownership 0104420.05-01S7a 43 and control of the Agent which is hereby granted to the Agent by the Seller and the Transferor. The Collection Agent shall be permitted to give instructions to the Lock-Box Banks for so long as neither a Collection Agent default nor any other Termination Event has occurred hereunder. The Collection Agent shall not add any bank as a Lock-Box Bank to those listed on Exhibit C attached hereto unless such bank has entered into a Lock-Box Agreement. The Collection Agent shall not terminate any bank as a Lock-Box Bank unless the Agent shall have received fifteen (15) days' prior notice of such termination. If the Transferor receives any Collections or is deemed to receive any Collections pursuant to Section 2.9, the Transferor shall immediately remit such Collections to a Lock-Box Account. Any Collections that are received by the Seller or the Collection Agent shall be immediately, but in any event within forty-eight (48) hours of receipt, be deposited by into a Lock-Box Account or a bank account (the "Collection Agent Account") established by the Collection Agent pursuant to an agreement between the Collection Agent, the Agent and a bank consented to by the Agent, which shall be substantially in the form of a Lock-Box Agreement. SECTION 2.9. Deemed Collections; Application of Payments. (a) If on any day the Outstanding Balance of a Receivable is either (x) reduced as a result of any defective, rejected or returned merchandise or services, any discount, credit, rebate, dispute, warranty claim, repossessed or returned goods, chargeback, allowance, any billing adjustment, dilutive factor or other adjustment, or (y) reduced or canceled as a result of a setoff or offset in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction), the Transferor shall be deemed to have received on such day a Collection of such Receivable in the amount of such reduction or cancellation and the Transferor shall pay to the Collection Agent an amount equal to such reduction or cancellation and such amount shall be applied by the Collection Agent as a Collection in accordance with Section 2.5 or 2.6 hereof, as applicable. The Net Investment shall be reduced by the amount of such payment applied to the reduction of the Net Investment and actually received by the Agent. 0104420.05-01S7a 44 (b) If on any day any of the representa- tions or warranties in Article III was or becomes untrue with respect to a Receivable (whether on or after the date of any transfer of an interest therein to the Agent, the Company or the Bank Investors as contemplated hereunder), the Transferor shall be deemed to have received on such day a Collection of such Receivable in full and the Transferor shall on such day pay to the Collection Agent an amount equal to the Outstanding Balance of such Receivable and such amount shall be allocated and applied by the Collection Agent as a Collection allocable to the Transferred Interest in accordance with Section 2.5 or 2.6 hereof, as applicable. The Net Investment shall be reduced by the amount of such payment applied to the reduction of the Net Investment and actually received by the Agent. (c) Any payment by an Obligor in respect of any indebtedness owed by it to the Transferor shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Company, be applied as a Collection of any Receivable of such Obligor included in the Transferred Interest (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other indebtedness of such Obligor. SECTION 2.10. Payments and Computations, Etc. All amounts to be paid or deposited by the Transferor or the Collection Agent hereunder shall be paid or deposited in accordance with the terms hereof no later than 11:00 a.m. (New York City time) on the day when due in immediately available funds; if such amounts are payable to the Company or any Bank Investor they shall be paid or deposited in the account indicated in Section 11.3 hereof, until otherwise notified by the Agent. The Transferor shall, to the extent permitted by law, pay to the Agent, for the benefit of the Company and the Bank Investors upon demand, interest on all amounts not paid or deposited when due hereunder at a rate equal to 1% per annum plus the Base Rate. All computations of Discount, interest and all per annum fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed. Any computations by the Agent of amounts payable by the 0104420.05-01S7a 45 Transferor hereunder shall be binding upon the Transferor absent manifest error. SECTION 2.11. Reports. Prior to the 15th day of each month, the Collection Agent shall prepare and forward to the Agent and the Administrative Agent (i) an Investor Report (including without limitation, a settlement statement and a certification as to the Net Receivables Balance) together with an aging of all Receivables, as of the close of business of the Collection Agent on the last day of the immediately preceding month, (ii) if requested by the Company, a listing by Obligor of all Receivables together with an aging of such Receivables and (iii) such other information as the Agent or the Administrative Agent may reasonably request. SECTION 2.12. Collection Account. There shall be established on the day of the initial Incremental Transfer hereunder and maintained, for the benefit of the Company and the Bank Investors, with the Agent, a segregated account (the "Collection Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Company and the Bank Investors. On and after the occurrence of a Collection Agent default or a Termination Event, the Collection Agent shall remit daily within forty-eight hours of receipt to the Collection Account all Collections received with respect to any Receivables. Funds on deposit in the Collection Account (other than investment earnings) shall be invested by the Agent in Eligible Investments that will mature so that such funds will be available prior to the last day of each successive Tranche Period following such investment. On the last day of each calendar month, all interest and earnings (net of losses and investment expenses) on funds on deposit in the Collection Account shall be retained in the Collection Account and be available to make any payments required to be made hereunder (including Discount) to the Agent, the Company or the Bank Investors. On the date on which the Net Investment is zero, all accrued Discount and Servicing Fees have been paid in full and all other Aggregate Unpaids have been paid in full, any funds remaining on deposit in the Collection Account shall be paid to the Transferor. SECTION 2.13. Sharing of Payments, Etc. If the Company or any Bank Investor (for purposes of this 0104420.05-01S7a 46 Section only, being a "Recipient") shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of Transferred Interest owned by it (other than pursuant to Section 2.7, or Article VIII and other than as a result of the differences in the timing of the applications of Collections pursuant to Section 2.5 or 2.6) in excess of its ratable share of payments on account of Transferred Interest obtained by the Company and/or the Bank Investors entitled thereto, such Recipient shall forthwith purchase from the Company and/or the Bank Investors entitled to a share of such amount participations in the Percentage Interests owned by such Persons as shall be necessary to cause such Recipient to share the excess payment ratably with each such other Person entitled thereto; provided, however, that if all or any portion of such excess payment is thereafter recovered from such Recipient, such purchase from each such other Person shall be rescinded and each such other Person shall repay to the Recipient the purchase price paid by such Recipient for such participation to the extent of such recovery, together with an amount equal to such other Person's ratable share (according to the proportion of (a) the amount of such other Person's required payment to (b) the total amount so recovered from the Recipient) of any interest or other amount paid or payable by the Recipient in respect of the total amount so recovered. SECTION 2.14. Rights of Set-off. Without in any way limiting the provisions of Section 2.13, each of the Company and the Bank Investors is hereby authorized (in addition to any other rights it may have) at any time after the occurrence of the Termination Date or during the continuance of a Potential Termination Event to set-off, appropriate and apply (without presentment, demand, protest or other notice which are hereby expressly waived) any deposits and any other indebtedness held or owing by the Company or such Bank Investor to, or for the account of, the Transferor against the amount of the Aggregate Unpaids owing by the Transferor to such Person (even if contingent or unmatured). 0104420.05-01S7a 47 ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.1. Representations and Warranties of the Transferor. The Transferor represents and warrants to the Company, the Agent and the Bank Investors that: (a) Corporate Existence and Power. The Transferor is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate power and all material governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is now conducted. (b) Corporate and Governmental Authorization; Contravention. The execution, delivery and performance by the Transferor of this Agreement, the Purchase Agreement, the Fee Letter, the Certificate and the Transfer Certificate are within the Transferor's corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, Official Body or official thereof (except as contemplated by Section 2.8 hereof), and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the Certificate of Incorporation or Bylaws of the Transferor or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Transferor or result in the creation or imposition of any Adverse Claim on the assets of the Transferor or any of its Subsidiaries (except as contemplated by Section 2.8 hereof). (c) Binding Effect. Each of this Agree- ment, the Purchase Agreement, the Fee Letter and the Certificate constitutes and the Transfer Certificate upon payment of the Transfer Price set forth therein will constitute, the legal, valid and binding obligation of the Transferor, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally. 0104420.05-01S7a 48 (d) Perfection. Immediately preceding each Transfer hereunder, the Transferor shall be the owner of all of the Receivables, free and clear of all Adverse Claims. On or prior to each Transfer and each recomputation of the Transferred Interest, all financing statements and other documents required to be recorded or filed in order to perfect and protect the Transferred Interest against all creditors of and purchasers from the Transferor and Tech Data will have been duly filed in each filing office necessary for such purpose and all filing fees and taxes, if any, payable in connection with such filings shall have been paid in full. (e) Accuracy of Information. All infor- mation heretofore furnished by the Transferor (including without limitation, the Investor Report furnished on a monthly basis and the Transferor's financial statements) to the Company, any Bank Investors, the Agent or the Administrative Agent for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Transferor to the Company, any Bank Investors, the Agent or the Administrative Agent will be, true and accurate in every material respect, on the date such information is stated or certified. (f) Tax Status. The Transferor has filed all tax returns (federal, state and local) required to be filed and has paid or made adequate provision for the payment of all taxes, assessments and other governmental charges. (g) Action, Suits. Except as set forth in Exhibit H, there are no actions, suits or proceedings pending, or to the knowledge of the Transferor threatened, against or affecting the Transferor or any Affiliate of the Transferor or their respective properties, in or before any court, arbitrator or other body, which may materially adversely affect the financial condition of the Transferor and the Subsidiaries taken as a whole or materially adversely affect the ability of Transferor to perform its obligations under this Agreement. (h) Use of Proceeds. No proceeds of any Transfer will be used by the Transferor to acquire any security in any transaction which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended. 0104420.05-01S7a 49 (i) Place of Business. The principal place of business and chief executive office of the Transferor are located at the address of the Transferor indicated in Section 11.3 hereof and the offices where the Transferor keeps all its Records, are located at the address(es) described on Exhibit I or such other locations notified to the Agent in accordance with Section 2.8 hereof in jurisdictions where all action required by Section 2.8 hereof has been taken and completed. (j) Good Title. Upon each Transfer and each recomputation of the Transferred Interest, the Company shall acquire a valid and perfected first priority undivided percentage ownership interest to the extent of the Transferred Interest or a first priority perfected security interest in each Receivable that exists on the date of such Transfer and recomputation and in the Related Security and Collections with respect thereto free and clear of any Adverse Claim. (k) Tradenames, Etc. As of the date hereof: (i) the Transferor's chief executive office is located at the address for notices set forth in Section 11.3 hereof; (ii) the Transferor has only the subsidiaries and divisions listed on Exhibit J hereto; and (iii) the Transferor has, within the last five (5) years, operated only under the tradenames identified in Exhibit J hereto, and, within the last five (5) years, has not changed its name, merged with or into or consolidated with any other corporation or been the subject of any proceeding under Title 11, United States Code (Bankruptcy), except as disclosed in Exhibit J hereto. (l) Nature of Receivables. Each Receiv- able (x) represented by the Transferor or the Collection Agent to be an Eligible Receivable (including in any Investor Report or other report delivered pursuant to Section 2.11 hereof) or (y) included in the calculation of the Net Receivables Balance in fact satisfies at such time the definition of "Eligible Receivable" set forth herein and is an "eligible asset" as defined in Rule 3a-7 under the Investment Company Act, of 1940, as amended and, in the case of clause (y) above, is not a Receivable of the type described in clauses (i) through (iii) of the definition of "Net Receivables Balance." 0104420.05-01S7a 50 (m) Coverage Requirement; Amount of Receivables. The Percentage Factor does not exceed the Maximum Percentage Factor. As of December 31, 1996 the aggregate Outstanding Balance of the Receivables in exis- tence was $503,847,551 and the Net Receivables Balance was $456,871,841. (n) No Termination Event. No event has occurred and is continuing and no condition exists which constitutes a Termination Event or a Potential Termination Event or if either such event has occurred, the Transferor has notified the Company in writing of either such event immediately upon learning of the occurrence thereof, describing the same and if applicable, the steps being taken by the Person(s) affected with respect thereto. (o) Not an Investment Company. The Transferor is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or is exempt from all provisions of such Act. (p) ERISA. The Transferor and each of its ERISA Affiliates is in compliance in all material respects with ERISA and no ERISA lien exists on any of the Receivables. (q) Lock-Box Accounts. The name and address of the Bank where the Collection Agent Account is maintained, together with the account number of such account, and the names and addresses of all the Lock-Box Banks, together with the account numbers of the Lock-Box Accounts of Tech Data at such Lock-Box Banks, are specified in Exhibit C hereto (or at such other Lock-Box Banks and/or with such other Lock-Box Accounts as have been notified to the Agent and for which Lock-Box Agreements have been executed in accordance with Section 2.8(b) hereof and delivered to the Collection Agent). All Obligors have been instructed to make payment to a Lock- Box Account and only Collections are deposited into the Lock-Box Accounts. Any document, instrument, certificate or notice delivered to the Company hereunder shall be deemed a representation and warranty by the Transferor. 0104420.05-01S7a 51 SECTION 3.2. Reaffirmation of Representations and Warranties by the Transferor. On each day that a Transfer is made hereunder, the Transferor, by accepting the proceeds of such Transfer, whether delivered to the Transferor pursuant to Section 2.2(a) or Section 2.5 hereof, shall be deemed to have certified that all representations and warranties described in Section 3.1 hereof are correct on and as of such day as though made on and as of such day. Each Incremental Transfer shall be subject to the further condition precedent that prior to the date of such Transfer, the Collection Agent shall have delivered to the Agent and the Administrative Agent, in form and substance satisfactory to the Agent and the Administrative Agent, a completed Investor Report dated within 14 days prior to the date of such Transfer, together with a listing by Obligor, if requested, and such additional information as may be reasonably requested by the Agent or the Administrative Agent; and the Transferor shall be deemed to have represented and warranted that such conditions precedent have been satisfied. SECTION 3.3. Representations and Warranties of Tech Data, as Collection Agent and Guarantor. Tech Data, as Collection Agent and Guarantor represents and warrants to the Company and the Bank Investors that: (a) Corporate Existence and Power. Tech Data is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate power and all material governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is now conducted. (b) Corporate and Governmental Autho- rization; Contravention. The execution, delivery and performance by Tech Data of this Agreement and the Purchase Agreement are within Tech Data's corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any Official Body or official thereof (except for the filing of UCC financing statements in connection with the Purchase Agreement), and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the Certificate of Incorporation or Bylaws of Tech Data or of any agreement, judgment, injunction, order, decree or other instrument binding upon 0104420.05-01S7a 52 Tech Data or result in the creation or imposition of any Adverse Claim on the assets of Tech Data or any of Tech Data's Subsidiaries except as contemplated by this Agreement and the Purchase Agreement. (c) Binding Effect. Each of this Agree- ment and the Purchase Agreement constitute the legal, valid and binding obligation of Tech Data, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors. (d) Accuracy of Information. All infor- mation heretofore furnished by Tech Data to the Transfer- or, the Agent, the Company, any Bank Investor or the Administrative Agent for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by Tech Data to the Transferor, the Agent, the Company, any Bank Investor or the Administrative Agent will be, true and accurate in every material respect, on the date such information is stated or certified. (e) Tax Status. Tech Data has filed all tax returns (federal, state and local) required to be filed and has paid or made adequate provision for the payment of all taxes, assessments and other governmental charges. (f) Action, Suits. Except as set forth in Exhibit H hereto, there are no actions, suits or proceedings pending, or to the knowledge of Tech Data threatened, against or affecting Tech Data or any Affiliate of Tech Data or their respective properties, in or before any court, arbitrator or other body, which may materially adversely affect the financial condition of Tech Data and Tech Data's Subsidiaries taken as a whole or materially adversely affect the ability of Tech Data to perform its obligations under this Agreement. (g) Credit and Collection Policy. Since Closing Date, there have been no material changes in Tech Data's Credit and Collection Policy; since such date, no material adverse change has occurred in the overall rate of collection of the Receivables. 0104420.05-01S7a 53 (h) Collections and Servicing. Since December 31, 1996, there has been no material adverse change in the ability of Tech Data to service and collect the Receivables. (i) Place of Business. The principal place of business and chief executive office of Tech Data are located at the address of Tech Data indicated in Section 11.3 hereof and the offices where Tech Data keeps all its Records, are located at the address(es) described on Exhibit I or such other locations notified to the Company in accordance with Section 2.8 hereof in jurisdictions where all action required by Section 2.8 hereof has been taken and completed. (j) Tradenames, Etc. As of the date hereof: (i) Tech Data's chief executive office is located at the address for notices set forth in Section 11.3 hereof; (ii) Tech Data has only the subsidiaries and divisions listed on Exhibit J hereto; and (iii) Tech Data has, within the last five (5) years, operated only under the tradenames identified in Exhibit J hereto, and, within the last five (5) years, has not changed its name, merged with or into or consolidated with any other corporation or been the subject of any proceeding under Title 11, United States Code (Bankruptcy), except as disclosed in Exhibit J hereto. (k) Nature of Receivables. Each Receiv- able is an "eligible asset" as defined in Rule 3a-7 under the Investment Company Act, of 1940, as amended. (l) No Termination Event. No event has occurred and is continuing and no condition exists which constitutes a Termination Event or a Potential Termination Event or if either such event has occurred, Tech Data has notified the Company in writing of either such event immediately upon learning of the occurrence thereof, describing the same and if applicable, the steps being taken by the Person(s) affected with respect thereto. (m) Not an Investment Company. Tech Data is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or is exempt from all provisions of such Act. 0104420.05-01S7a 54 (n) ERISA. Tech Data is in compliance in all material respects with ERISA and no lien exists in favor of the Pension Benefit Guaranty Corporation on any of the Receivables. SECTION 3.4. Reaffirmation of Representations and Warranties by Tech Data, as Collection Agent and Guarantor. On each day that a Transfer is made hereunder, Tech Data shall be deemed to have certified that all representations and warranties described in Section 3.3 are correct on and as of such day as though made on and as of such day. Any document, instrument, certificate or notice delivered to the Company hereunder shall be deemed a representation and warranty by Tech Data. 0104420.05-01S7a 55 ARTICLE IV CONDITIONS PRECEDENT SECTION 4.1. Conditions to Closing. On or prior to the date of execution hereof, the Transferor shall deliver to the Agent the following documents, instruments and fees all of which shall be in a form and substance acceptable to the Agent: (a) A copy of the resolutions of the Board of Directors of the Transferor and Tech Data certified by its Secretary approving the execution, delivery and performance by the Transferor and Tech Data of this Agreement, the Purchase Agreement and the other Transaction Documents to be delivered by the Transferor and Tech Data hereunder or thereunder. (b) The Articles of Incorporation of the Transferor and of Tech Data certified by the Secretary of State or other similar official of the Transferor's and Tech Data's respective jurisdictions of incorporation, each dated a date reasonably prior to the Closing Date. (c) A Good Standing Certificate for the Transferor and a Certificate of Status for Tech Data issued by the Secretary of State or a similar official of the Transferor's and Tech Data's respective jurisdictions of incorporation and certificates of qualification as a foreign corporation issued by the Secretaries of State or other similar officials of each jurisdiction where such qualification is material to the transactions contemplated by this Agreement and the other Transaction Documents, in each case, dated a date reasonably prior to the Closing Date. (d) A Certificate of the Secretary of the Transferor and Tech Data substantially in the form of Exhibit L attached hereto certifying (i) the names and signatures of the officers authorized on its behalf to execute this Agreement, the Purchase Agreement, the Certificate, the Fee Letter and any other documents to be delivered by it hereunder (on which Secretary's Certificates the Company may conclusively rely until such time as the Company shall receive from the Transferor and Tech Data a revised Certificate meeting the requirements of 0104420.05-01S7a 56 this clause (d)(i)) and (ii) a copy of the Transferor's and Tech Data's By-Laws. (e) Copies of proper financing statements (Form UCC-1), dated a date reasonably near to the date of the initial Incremental Transfer naming the Transferor as the debtor in favor of the Agent, for the benefit of the Company and the Bank Investors, secured party or other similar instruments or documents as may be necessary or in the reasonable opinion of the Agent desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the Agent's undivided percentage interest in all Receivables and the Related Security and Collections relating thereto. (f) Copies of proper financing statements (Form UCC-1), dated a date reasonably near to the date of the initial Incremental Transfer naming Tech Data as the debtor in favor of the Transferor as secured party and the Agent, for the benefit of the Company and the Bank Investors, as assignee of the secured party or other similar instruments or documents as may be necessary or in the reasonable opinion of the Agent desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the Transferor's ownership interest in all Receivables. (g) Copies of proper financing statements (Form UCC-3), if any, necessary to terminate all security interests and other rights of any person in Receivables previously granted by Tech Data and the Transferor. (h) Certified copies of request for information or copies (Form UCC-11) (or a similar search report certified by parties acceptable to the Agent) dated a date reasonably near the date of the initial Incremental Transfer listing all effective financing statements which name the Transferor or the Seller (under their respective present names and any previous names) as debtor and which are filed in jurisdictions in which the filings were made pursuant to items (e) or (f) above together with copies of such financing statements (none of which shall cover any Receivables or Contracts). (i) Executed copies of the Lock-Box Agreements, relating to each of the Lock-Boxes and the 0104420.05-01S7a 57 Lock-Box Accounts, and an executed copy of the agreement referred to in Section 2.8(b). (j) An opinion of David Vetter, counsel to Tech Data, addressing certain corporate matters relating to Tech Data, covering the appropriate matters set forth in Exhibit K hereto. (k) An opinion of Heller, Ehrman, White & McAuliffe, special California counsel to the Transferor, addressing certain corporate matters relating to the Transferor, covering the appropriate matters set forth in Exhibit K hereto. (l) A certificate of the Transferor and Tech Data in the form of Exhibit L-1 and Exhibit L-2 hereto executed by Arthur W. Singleton, Secretary of the Transferor and Tech Data, respectively. (m) A hard copy, microfiche or computer tape setting forth all Receivables and the Outstanding Balances thereon and such other information as the Agent may reasonably request. (n) An executed copy of this Agreement, the Purchase Agreement, and the Fee Letter. (o) The Transfer Certificate, duly exe- cuted by the Transferor. (p) The Certificate, duly executed by the Transferor and appropriately completed. (q) An Investor Report for December 31, 1996. (r) An assignment by NationsBank, N.A., as collateral agent under the Company's commercial paper program, of its interest in certain of the Lock-Box Agreements to the Agent. (s) A letter agreement, dated the Closing Date, between NationsBank, N.A. and the Transferor relat- ing to certain legal opinion matters. 0104420.05-01S7a 58 (t) Such other documents, instruments, certificates and opinions as the Agent or the Administra- tive Agent, shall reasonably request. SECTION 4.2. Post Closing Conditions. On or prior to February 3, 1997, the Transferor shall deliver to the Agent the following documents, which shall be in a form and substance acceptable to the Agent: (a) An opinion of Heller, Ehrman, White & McAuliffe, special California counsel to the Transferor, addressing certain security interest and Uniform Commercial Code matters relating to the Agent's interest in the Receivables; and (b) An original fully executed copy of a Lock-Box Agreement relating to account number 3750627895 maintained at NationsBank of Texas, N.A. 0104420.05-01S7a 59 ARTICLE V COVENANTS SECTION 5.1. Affirmative Covenants of Trans- feror. At all times from the date hereof to the later to occur of (i) the Termination Date or (ii) the date on which the Net Investment has been reduced to zero, all accrued Discount and Servicing Fees shall have been paid in full and all other Aggregate Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise consent in writing: (a) Reports. The Transferor shall deliv- er to the Agent, on behalf of the Company: (i) Compliance Certificate. Within one hundred and twenty (120) days of the close of each of its fiscal years and within sixty (60) days of the close of each of the first three fiscal quarters of each of its fiscal years, a compliance certificate signed by its chief financial officer stating that no Termination Event or Potential Termination Event exists, or if any Termination Event or Potential Termination Event exists, stating the nature and status thereof. (ii) Notice of Termination Events or Potential Termination Events. As soon as possible and in any event within two days after the occurrence of each Termination Event or each Potential Termination Event, a statement of the chief financial officer or chief accounting officer of the Transferor setting forth details of such Termination Event or Potential Termination Event and the action which the Transferor proposes to take with respect thereto. (iii) Change in Credit and Collection Policy. Within 15 days after the date any material change in or amendment to the Credit and Collection Policy is made, a copy of the Credit and Collection Policy then in effect indicating such change or amendment. 0104420.05-01S7a 60 (iv) ERISA. Promptly after the filing or receiving thereof, copies of all reports and notices with respect to any "reportable event" (as defined in Article IV of ERISA) which the Transferor, Tech Data or any Affiliate of the Transferor files under ERISA with the Internal Revenue Service, the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or which the Transferor, Tech Data or any Affiliates of the Transferor receives from the Internal Revenue Service, the Pension Benefit Guaranty Corporation or the U.S. Department of Labor. (v) Other Information. Such other information (including non-financial in- formation) as the Agent, or the Administrative Agent, may from time to time reasonably re- quest. (b) Conduct of Business. The Transferor will carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted. (c) Compliance with Laws. The Transferor will comply in all material respects with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject. (d) Furnishing of Information and Inspec- tion of Records. The Transferor will furnish to the Agent from time to time such information with respect to the Receivables as the Agent may reasonably request, including, without limitation, listings identifying the Obligor and the Outstanding Balance for each Receivable. The Transferor will at any time and from time to time during regular business hours upon forty-eight (48) hours prior written notice, permit the Agent, or its agents or representatives, (i) to examine and make copies of and abstracts from all Records and (ii) to visit the offices and properties of the Transferor or Tech Data, as appli- 0104420.05-01S7a 61 cable, for the purpose of examining such Records, and to discuss matters relating to Receivables or the Transferor's performance hereunder with any of the officers, directors, employees or independent public accountants of the Transferor having knowledge of such matters. (e) Keeping of Records and Books of Account. The Transferor will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain, all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the daily identification of each new Receivable and all Collections of and adjustments to each existing Receivable); provided, that the Transferor shall not be required to keep and maintain such records with respect to any Receivables for a period of more than sixty (60) days after such Receivables shall have been paid in full by the Obligors thereof. The Transferor will give the Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence. (f) Performance and Compliance with Receivables and Contracts. The Transferor will at its expense timely and fully perform and comply with all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables. (g) Credit and Collection Policies. The Transferor will comply in all material respects with the Credit and Collection Policy in regard to each Receivable and the related Contract. (h) Collections. The Transferor shall instruct all Obligors to cause all Collections to be deposited directly to a Lock-Box Account. (i) Collections Received by Transferor. The Transferor shall hold in trust, and deposit, immediately, but in any event not later than forty-eight (48) hours of its receipt thereof, to a Lock-Box Account all Collections received from time to time by the Transferor 0104420.05-01S7a 62 (including without limitation, in the case of the Trans- feror, all Collections deemed to have been received by the Transferor under Section 2.9(a)). SECTION 5.2. Negative Covenants of Transferor. At all times from the date hereof to the later to occur of (i) the Termination Date or (ii) the date on which the Net Investment has been reduced to zero, all accrued Discount and Servicing Fees shall have been paid in full and all other Aggregate Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise consent in writing: (a) No Sales, Liens, Etc. Except as otherwise provided herein, the Transferor will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim upon (or the filing of any financing statement) or with respect to (x) any of the Affected Assets, (y) any inventory or goods, the sale of which may give rise to a Receivable or any Receivable or related Contract, or (z) any account which concentrates in a Lock-Box Bank to which any Collections of any Receivable are sent, or assign any right to receive income in respect thereof. (b) No Extension or Amendment of Receiv- ables. Except as otherwise permitted in Section 6.2 hereof, the Transferor will not extend, amend or otherwise modify the terms of any Receivable, or amend, modify or waive any term or condition of any Contract related thereto. (c) No Change in Business or Credit and Collection Policy. The Transferor will not make any change in the character of its business or in the Credit and Collection Policy, which change would, in either case, impair the collectibility of the Receivables in a material respect. (d) No Mergers, Etc. The Transferor will not (i) consolidate or merge with or into any other Person, or (ii) sell, lease or transfer all or substantially all of its assets to any other person; provided, however, that so long as the Transferor remains wholly owned by Tech Data, the foregoing prohibitions will not apply. 0104420.05-01S7a 63 (e) Change in Payment Instructions to Obligors. The Transferor will not add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account to or from those listed in Exhibit C hereto or make any change in its instructions to Obligors regarding payments to be made to any Lock-Box Account, unless (i) such instructions are to deposit such payments to another existing Lock-Box Account or (ii) the Agent shall have received written notice of such addition, termination or change at least 30 days prior thereto and the Agent shall have received a Lock-Box Agreement executed by each new Lock-Box Bank or an existing Lock-Box Bank with respect to each new Lock-Box Account, as applicable. (f) Deposits to Lock-Box Accounts. The Transferor will not deposit or otherwise credit, or cause or permit to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Receivables or cash proceeds of other receivables that were originally Receivables but were not Eligible Receivables on the date of the initial Transfer hereunder and so were subsequently repurchased by the Transferor pursuant to Section 2.9 and, upon any deposit of any proceeds of such other receivables to any Lock-Box Account, remove such proceeds within two Business Days following such deposit. (g) Change of Name, Etc. The Transferor will not change its name, identity or structure or the location of its chief executive office, unless at least 10 days prior to the effective date of any such change the Transferor delivers to the Agent (i) such documents, instruments or agreements, executed by the Transferor, necessary to reflect such change and to continue the perfection of the Agent's ownership interests or security interests in the Affected Assets and (ii) new or revised Lock-Box Agreements executed by the Lock-Box Banks which reflect such change and enable the Agent to continue to exercise its rights contained in Section 2.8 hereof. (h) Amendment to Purchase Agreement. The Transferor will not amend, modify, or supplement the Purchase Agreement between the Transferor and Tech Data, except that the Transferor may, upon 15 days prior written notice to the Agent and the Administrative Agent, enter into an amendment, modification or supplement to the Purchase Agreement, provided the same shall not mate- 0104420.05-01S7a 64 rially adversely affect the interests of the Agent, the Company or any Bank Investor; nor shall the Transferor take any other action under the Purchase Agreement that shall have the same such affect upon the interests of the Agent, the Company, or any Bank Investor. SECTION 5.3. Affirmative Covenants of Tech Data. At all times from the date hereof to the later to occur of (i) the Termination Date or (ii) the date on which the Transferred Interest shall be equal to zero, unless the Agent shall otherwise consent in writing: (a) Financial Reporting. Tech Data will maintain, for itself, a system of accounting established and administered in accordance with generally accepted accounting principles, and furnish to the Agent and each Bank Investor: (i) Annual Reporting. Within one hundred and twenty (120) days after the close of each of its fiscal years, an unqualified audit report certified by independent certified public accountants, acceptable to the Agent, prepared in accordance with generally accepted accounting principles on a consolidated and consolidating basis (consolidating statements need not be certified by such accountants) for itself including balance sheets as of the end of such period, related profit and loss and reconciliation of surplus statements, and a statement of cash flows, accompanied by any management letter prepared by said accountants and by a certificate of said accountants that, in the course of the foregoing, they have obtained no knowledge of any Termination Event or Potential Termination Event, or if, in the opinion of such accountants, any Termination Event or Potential Termination Event shall exist, stating the nature and status thereof. (ii) Quarterly Reporting. With- in sixty (60) days after the close of the first three quarterly periods of each of its fiscal years, for itself consolidated and consolidating unaudited balance sheets as at the close of each such period and consolidated and consoli- 0104420.05-01S7a 65 dating profit and loss and reconciliation of surplus statements and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, all certified by its chief financial officer. (iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate signed by its chief financial officer stating that no Termination Event or Potential Termination Event exists, or if any Termination Event or Potential Termination Event exists, stating the nature and status thereof and containing a computation of, and showing compliance with, each of the financial ratios and restrictions contained in this Agreement and showing all information necessary in order to determine the Applicable Margin. (iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof to the shareholders of Tech Data, copies of all financial statements, reports and proxy statements so furnished. (v) S.E.C. Filings. Promptly upon the filing thereof, copies of all registration statements and nnual, quarterly, monthly or other regular reports which Tech Data or any subsidiary files with the Securities and Exchange Commission. (vi) Other Information. Such other information (including non-financial in- formation) as the Agent may from time to time reasonably request. (b) Conduct of Business. Tech Data will, and will cause each of its Subsidiaries to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and to do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to 0104420.05-01S7a 66 conduct its business in each jurisdiction in which its business is conducted. (c) Compliance with Laws. Tech Data will, and will cause each of its Subsidiaries to, comply in all material respects with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it or its properties may be subject. (d) Furnishing of Information and Inspec- tion of Records. Tech Data will furnish to the Transfer- or and the Agent from time to time such information with respect to the Receivables as the Transferor or the Agent may reasonably request, including, without limitation, listings identifying the Obligor and the Outstanding Balance for each Receivable. Tech Data will at any time and from time to time during regular business hours upon forty-eight (48) hours prior written notice, permit the Agent, or its agents or representatives, (i) to examine and make copies of and abstracts from all Records and (ii) to visit the offices and properties of Tech Data for the purpose of examining such Records, and to discuss matters relating to Receivables or Tech Data's performance hereunder with any of the officers, directors, employees or independent public accountants of Tech Data having knowledge of such matters. (e) Keeping of Records and Books of Account. Tech Data will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain, all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the daily identification of each new Receivable and all Collections of and adjustments to each existing Receivable); provided, that Tech Data shall not be required to keep and maintain such records with respect to any Receivables for a period of more than sixty (60) days after such Receivables shall have been paid in full by the Obligors thereof. Tech Data will give the Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence. 0104420.05-01S7a 67 (f) Performance and Compliance with Receivables and Contracts. Tech Data, at its expense, will timely and fully perform and comply with all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables. (g) Credit and Collection Policies. Tech Data will comply in all material respects with the Credit and Collection Policy in regard to each Receivable and the related Contract. (h) Collections. Tech Data shall in- struct all Obligors to cause all Collections to be depos- ited directly to a Lock-Box Account. (i) Collections Received by Tech Data. Tech Data shall hold in trust, and deposit, immediately, but in any event not later than forty-eight (48) hours of its receipt thereof, to a Lock-Box Account or the Collection Agent Account all Collections received from time to time by Tech Data. (j) Transfer of Receivables. Tech Data shall sell or contribute Receivables (as defined in the Purchase Agreement) to the Transferor at such time or times as necessary in order to cause the Percentage Factor not to exceed the Maximum Percentage Factor. SECTION 5.4. Negative Covenants of Tech Data. At all times from the date hereof to the later to occur of (i) the Termination Date or (ii) the date on which the Net Investment has been reduced to zero, all accrued Discount and Servicing Fees shall have been paid in full and all other Aggregate Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise consent in writing: (a) No Sales, Liens, Etc. Except as otherwise provided herein and in the Receivables Purchase Agreement, Tech Data will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim upon (or the filing of any financing statement) or with respect to (x) any of the Affected Assets, (y) any inventory or goods, the sale of which may give rise to a Receivable or any Receivable or related Contract, or (z) any account which concen- 0104420.05-01S7a 68 trates in a Lock-Box Bank to which any Collections of any Receivable are sent, or assign any right to receive income in respect thereof. (b) No Extension or Amendment of Receiv- ables. Except as otherwise permitted in Section 6.2 hereof, Tech Data will not extend, amend or otherwise modify the terms of any Receivable, or amend, modify or waive any term or condition of any Contract related thereto. (c) No Change in Business or Credit and Collection Policy. Tech Data will not make any change in the character of its business or in the Credit and Collection Policy, which change would, in either case, impair the collectibility of the Receivables in a material respect. (d) No Mergers, Etc. Tech Data will not (i) consolidate or merge with or into any other Person if such action shall result in a Potential Termination Event or a Termination Event and Tech Data shall not be the surviving entity or (ii) sell, lease or transfer all or substantially all of its assets to any other person. (e) Change in Payment Instructions to Obligors. Tech Data will not add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account to or from those listed in Exhibit C hereto or make any change in its instructions to Obligors regarding payments to be made to any Lock-Box Account, unless (i) such instructions are to deposit such payments to another existing Lock-Box Account or (ii) the Agent shall have received written notice of such addition, termination or change at least 30 days prior thereto and the Agent shall have received a Lock-Box Agreement executed by each new Lock-Box Bank or an existing Lock-Box Bank with respect to each new Lock-Box Account, as applicable. (f) Deposits to Lock-Box Accounts. Tech Data will not deposit or otherwise credit, or cause or permit to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Receivables or cash proceeds or other receivables that were originally Receivables but were not Eligible Receivables on the date of the initial Transfer hereunder and so were subsequently repurchased by the Transferor pursu- 0104420.05-01S7a 69 ant to Section 2.9 and, upon any deposit of any proceeds of such other receivables to any Lock-Box Account, remove such proceeds within two Business Days following such deposit. (g) Change of Name, Etc. Tech Data will not change its name, identity or structure or location of its chief executive office, unless at least 10 days prior to the effective date of any such change Tech Data delivers to the Transferor and the Agent (i) such documents, instruments or agreements, executed by the Transferor, as are necessary to reflect such change and to continue the perfection of the Transferor's ownership interest in the Receivables and (ii) new or revised Lock-Box Agreements executed by the Lock-Box Banks which reflect such change and enable the Agent to continue to exercise its rights contained in Section 2.8 hereof. SECTION 5.5. Financial Covenants. (a) Indebtedness to Total Capital. Tech Data shall not permit the ratio of Consolidated Funded Indebtedness to Consolidated Total Capital to exceed .60 to 1.00 at any time. (b) EBIT to Interest Expense. Tech Data shall not permit the ratio of Consolidated EBIT to Consolidated Interest Expense to be less than 2.50 to 1.00 at any time. Capitalized terms used in this Section 5.5 and not defined herein shall have those meanings assigned in Exhibit N. 0104420.05-01S7a 70 ARTICLE VI ADMINISTRATION AND COLLECTIONS SECTION 6.1. Appointment of Collection Agent. The servicing, administering and collection of the Receivables shall be conducted by such Person (the "Collection Agent") so designated from time to time in accordance with this Section 6.1. Until the Agent gives notice to Tech Data of the designation of a new Collection Agent, Tech Data is hereby designated as, and hereby agrees to perform the duties and obligations of, the Collection Agent pursuant to the terms hereof. The Collection Agent may not delegate any of its rights, duties or obligations hereunder, or designate a substitute Collection Agent, without the prior written consent of the Agent, and provided that the Collection Agent shall continue to remain solely liable for the performance of the duties as Collection Agent hereunder. The Agent may, and upon the direction of the Majority Investors, shall, after the occurrence of a Collection Agent default or any other Termination Event designate as Collection Agent any Person (including itself) to succeed Tech Data or any successor Collection Agent, on the condition in each case that any such Person so designated shall agree to perform the duties and obligations of the Collection Agent pursuant to the terms hereof. The Agent, at any time following the occurrence of a Termination Event, may notify any Obligor of the Transferred Interest. SECTION 6.2. Duties of Collection Agent. (a) Subject to the limitations contained herein, the Collection Agent shall take or cause to be taken all such action as may be necessary or advisable to collect each Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy. Each of the Transferor, the Company, the Agent and the Bank Investors hereby appoints as its agent the Collection Agent, from time to time designated pursuant to Section 6.1 hereof, to enforce its respective rights and interests in and under the Affected Assets. To the extent permitted by applicable law, each of the Transferor and the Seller (to the extent not then acting as Collection Agent hereunder) 0104420.05-01S7a 71 hereby grants to any Collection Agent appointed hereunder an irrevocable power of attorney to take any and all steps in the Transferor's and/or the Seller's name and on behalf of the Transferor or the Seller necessary or desirable, in the reasonable determination of the Collection Agent, to collect all amounts due under any and all Receivables, including, without limitation, endorsing the Transferor's and/or the Seller's name on checks and other instruments representing Collections and enforcing such Receivables and the related Contracts. The Collection Agent shall set aside for the account of the Transferor and the Company or the Bank Investors their respective allocable shares of the Collections of Receivables in accordance with Sections 2.5 and 2.6 hereof. The Collection Agent shall segregate and deposit to the Agent's account the Company's and the Bank Investors' allocable share of Collections of Receivables when required pursuant to Article II hereof. So long as no Termination Event shall have occurred and be continuing, the Collection Agent may, in accordance with the Credit and Collection Policy, extend the maturity of Receivables, but not beyond 60 days, and extend the maturity or adjust the Outstanding Balance as the Collection Agent may determine to be appropriate to maximize Collections thereof; provided, however, that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable or a Defaulted Receivable. The Transferor shall deliver to the Collection Agent and the Collection Agent shall hold in trust for the Transferor, the Company, the Agent and the Bank Investors, in accordance with their respective interests, all Records which evidence or relate to Receivables or Related Security. Notwithstanding anything to the contrary contained herein, the Agent shall have the absolute and unlimited right to direct the Transferor, if Tech Data is the Collection Agent, or if Tech Data is not the Collection Agent, the Collection Agent to commence or settle any legal action to enforce collection of any Receivable or to foreclose upon or repossess any Related Security. The Collection Agent shall not make the Agent, the Company or any of the Bank Investors a party to any litigation without the prior written consent of such Person. (b) The Collection Agent shall, as soon as practicable following receipt of any Collections, turn over to the Transferor an amount equal to such Collections minus the Percentage Factor of such Collections. 0104420.05-01S7a 72 In addition, the Collection Agent shall, as soon as practicable following receipt thereof, turn over to the Transferor any collections of any indebtedness of any Obligor which is not a Receivable. If the Collection Agent is not Tech Data or the Transferor or any Affiliate of the Transferor or Tech Data, the Collection Agent, by giving three Business Days' prior written notice to the Agent, may revise the percentage used to calculate the Servicing Fee so long as the revised percentage will not result in a Servicing Fee that exceeds 110% of the reasonable and appropriate out-of-pocket costs and expenses of such Collection Agent incurred in connection with the performance of its obligations hereunder as documented to the reasonable satisfaction of the Agent. The Collection Agent, if other than Tech Data, shall as soon as practicable upon demand, deliver to the Transferor all Records in its possession which evidence or relate to indebtedness of an Obligor which is not a Receivable, and copies of Records in its possession which evidence or relate to Receivables. (c) On or before 120 days after the end of each fiscal year of the Collection Agent, beginning with the fiscal year ending January 31, 1997, the Collection Agent shall cause a firm of independent public accountants (who may also render other services to the Collection Agent or the Transferor) to furnish a report to the Agent to the effect that they have (i) confirmed the Net Receivables Balance as of the end of each Tranche Period during such fiscal year, and (ii) confirmed that the Receivables treated by the Collection Agent as Eligible Receivables in fact satisfied the requirements of the definition thereof contained herein, except, in each case for (a) such exceptions as such firm shall believe to be immaterial (which exceptions need not be enumerated) and (b) such other exceptions as shall be set forth in such statement. (d) Notwithstanding anything to the contrary contained in this Article VI, the Collection Agent, if not Tech Data, the Transferor, or any Affiliate of the Transferor or Tech Data, shall have no obligation to collect, enforce or take any other action described in this Article VI with respect to any indebtedness that is not included in the Transferred Interest other than to deliver to the Transferor the collections and documents 0104420.05-01S7a 73 with respect to any such Receivable as described in Section 6.2(b) hereof. SECTION 6.3. Rights After Designation of New Collection Agent. At any time following the designation of a Collection Agent (other than Tech Data, the Trans- feror, or any Affiliate of Tech Data or the Transferor) pursuant to Section 6.1 hereof: (i) The Agent may direct that payment of all amounts payable under any Receivable be made directly to the Agent or its designee. (ii) Tech Data shall, at the Agent's request and at Tech Data's expense, give notice of the Agent's, the Transferor's, the Company's and/or the Bank Investor's ownership of Receivables to each Obligor and direct that payments be made directly to the Agent or its designee. (iii) Tech Data shall, at the Agent's request, (A) assemble all of the Records, and shall make the same available to the Agent at a place selected by the Agent or its designee, and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections of Receivables in a manner acceptable to the Agent and shall, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Agent or its designee. (iv) The Transferor and Tech Data hereby authorize the Agent to take any and all steps in the Transferor's or Tech Data's name and on behalf of the Transferor or Tech Data necessary or desirable, in the determination of the Agent, to collect all amounts due under any and all Receivables, including, without limitation, endorsing the Transferor's or Tech Data's name on checks and other instruments representing Collections and enforcing such Receivables and the related Contracts. 0104420.05-01S7a 74 SECTION 6.4. Responsibilities of the Trans- feror and Tech Data. Anything herein to the contrary notwithstanding, the Transferor and Tech Data, as seller under the Purchase Agreement, shall (i) perform all of their respective obligations under the Contracts related to the Receivables to the same extent as if interests in such Receivables had not been sold hereunder and the exercise by the Agent of its rights hereunder shall not relieve the Transferor or Tech Data, as seller under the Purchase Agreement, from such obligations and (ii) pay when due any taxes, including without limitation, any sales taxes payable in connection with the Receivables and their creation and satisfaction. Neither the Agent nor the Company nor any of the Bank Investors shall have any obligation or liability with respect to any Receivable or related Contracts, nor shall it be obligated to perform any of the obligations of the Transferor or Tech Data thereunder. 0104420.05-01S7a 75 ARTICLE VII TERMINATION EVENTS SECTION 7.1. Termination Events. The occur- rence of any one or more of the following events shall constitute a Termination Event: (a) (i) the Collection Agent shall fail to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (ii) of this Section 7.1(a)) and such failure shall remain unremedied for 15 days, or (ii) either the Collection Agent, the Transferor, or the Guarantor shall fail to make any payment or deposit to be made by it hereunder when due or the Collection Agent shall fail to observe or perform any term, covenant or agreement on the Collection Agent's part to be performed under Section 2.8(b) hereof; or (b) any representation, warranty, certif- ication or statement made by Tech Data or the Transferor in this Agreement or in any other document delivered pursuant hereto shall prove to have been incorrect in any material respect when made or deemed made; or (c) (i) the Transferor shall default in the observance or performance of the terms, covenants, conditions or agreements on the Transferor's part to be performed or observed under Section 4.2, Section 5.1(a)(ii), Section 5.1(h), Section 5.1(i), Section 5.2(a), Section 5.2(c), Section 5.2(d), Section 5.2(e), Section 5.2(f), Section 5.2(g) or Section 5.2(h) hereof or (ii) the Transferor shall default in the observance or performance of the terms, covenants, conditions or agreements on the Transferor's part to be performed or observed under Section 5.1(a)(i), Section 5.1(a)(iii), Section 5.1(a)(iv), Section 5.1(a)(v), Section 5.1(b), Section 5.1(c), Section 5.1(d), Section 5.1(e), Section 5.1(f), Section 5.1(g) or Section 5.2(b) hereof and such failure shall remain unremedied for 15 days; or (d) (i) Tech Data shall default in the observance or performance of the terms, covenants, conditions or agreements on Tech Data's part to be performed or observed under Section 5.3(h), Section 5.3(i), Section 5.4(a), Section 5.4(c), Section 5.4(d), Section 5.4(e), 0104420.05-01S7a 76 Section 5.4(f) or Section 5.5 or (ii) Tech Data shall default in the observance or performance of the terms, covenants, conditions or agreements on Tech Data's part to be performed under Section 5.3(a), Section 5.3(b), Section 5.3(c), Section 5.3(d), Section 5.3(e), Section 5.3(f), Section 5.3(g) or Section 5.4(b) hereof and such failure shall remain unremedied for 15 days; or (e) the Transferor or Tech Data shall de- fault in the observance or performance of any other term, covenant, condition or agreement on the Transferor's or Tech Data's part to be performed or observed under this Agreement and such default shall continue for 30 days after the earlier of (i) the date that such written notice thereof is given to the Transferor or Tech Data, as applicable, by the Agent or (ii) the date the Trans- feror or Tech Data, as applicable, becomes aware of such default; or (f) failure of Tech Data or any Subsid- iary of Tech Data to pay any Indebtedness greater than $500,000 when due; or the default by Tech Data or any Subsidiary of Tech Data in the performance of any term, provision or condition contained in any agreement under which any Indebtedness greater than $500,000 was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Indebtedness greater than $500,000 to cause, such Indebtedness to become due prior to its stated maturity; or any Indebtedness greater than $500,000 shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the date of maturity thereof; or (g) any Event of Bankruptcy shall occur with respect to the Transferor, the Collection Agent, Tech Data or any Subsidiary of either the Transferor or Tech Data; or (h) the Agent, on behalf of the Company and/or the Bank Investors, shall, for any reason, fail or cease to have a valid and perfected first priority ownership or security interest in the Affected Assets free and clear of any Adverse Claims; or (i) Tech Data shall enter into any trans- action or merger whereby it is not the surviving entity; 0104420.05-01S7a 77 or the Transferor shall no longer be wholly owned by Tech Data; or (j) there shall have occurred any materi- al adverse change in the operations of Tech Data since October 31, 1996 or any other event shall have occurred which materially affects Tech Data's ability to either collect the Receivables or to perform under this Agreement or under the Purchase Agreement; or (k) the Liquidity Provider or the Credit Support Provider shall have given notice that an event of default has occurred and is continuing under any of its respective agreements with the Company; or (l) the Commercial Paper issued by the Company shall not be rated at least "A-2" by Standard & Poor's and at least "P-2" by Moody's, unless such downgrading is the result of the Credit Support Provider being downgraded; or (m) the Percentage Factor exceeds the Maximum Percentage Factor unless the Transferor reduces the Net Investment on the next day or increases the balance of the Affected Assets on the next Business Day so as to reduce the Percentage Factor to less than or equal to 98%; or (n) the Percentage Factor equals or ex- ceeds 100% for a period of one full Business Day (provided that in such case the Termination Event caused thereby shall be deemed to have occurred at the start of such one full Business Day period) or the Net Investment plus the aggregate Interest Component exceeds the Facility Limit; or (o) the Dilution Ratio equals or exceeds 15%; or (p) the average of the Loss to Liquida- tion Ratios for any three consecutive months exceeds 2.25%; or (q) the Delinquency Ratio exceeds 11%. SECTION 7.2. Termination. (a) Upon the occurrence of any Termination Event, the Agent may, or at 0104420.05-01S7a 78 the direction of the Majority Investors shall, by notice to the Transferor and the Collection Agent declare the Termination Date to have occurred; provided, however, that in the case of any event described in Section 7.1(g), 7.1(h), 7.1(i) or 7.1(n) above, the Termination Date shall be deemed to have occurred automatically upon the occurrence of such event. Upon any such declaration or automatic occurrence, the Agent shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under the UCC of the applicable jurisdiction and other applicable laws, all of which rights shall be cumulative. (b) At all times after the declaration or automatic occurrence of the Termination Date pursuant to Section 7.2(a) (other than a declaration following the occurrence of a Termination Event set forth in Section 7.1(k) or Section 7.1(l)), the Base Rate plus 2.00% shall be the Tranche Rate applicable to the Net Investment for all existing and future Tranches. 0104420.05-01S7a 79 ARTICLE VIII INDEMNIFICATION; EXPENSES; RELATED MATTERS SECTION 8.1. Indemnities by the Transferor. Without limiting any other rights which the Agent, the Company or the Bank Investors may have hereunder or under applicable law, the Transferor hereby agrees to indemnify the Agent, the Company, the Bank Investors, the Administrative Agent, the Collateral Agent, the Liquidity Provider and the Credit Support Provider and any successors and any permitted assigns and their respective officers, directors and employees (collectively, "Indemnified Parties") from and against any and all damages, losses, claims, liabilities, costs and expenses, including, without limitation, reasonable attorneys' fees (which such attorneys may be employees of the Liquidity Provider, the Credit Support Provider, the Agent, the Administrative Agent or the Collateral Agent, as applicable) and disbursements (all of the foregoing being collectively referred to as "Indemnified Amounts") awarded against or incurred by any of them arising out of or as a result of this Agreement or the ownership, either directly or indirectly, by the Agent, the Company or any Bank Investor of the Transferred Interest excluding, however, (i) Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of an Indemnified Party or (ii) recourse (except as otherwise specifically provided in this Agreement) for uncollectible Receivables or (iii) claims arising from credit losses. Without limiting the generality of the foregoing, the Transferor shall indemnify each Indemnified Party for Indemnified Amounts relating to or resulting from: (i) reliance on any representation or warranty made by the Transferor (or any officers of the Transferor) under or in connection with this Agreement, any Investor Report or any other information or report delivered by the Transferor pursuant hereto, which shall have been false or incorrect in any material respect when made or deemed made; (ii) the failure by the Transferor to comply with any applicable law, rule or regulation with respect to any Receivable or 0104420.05-01S7a 80 the related Contract, or the nonconformity of any Receivable or the related Contract with any such applicable law, rule or regulation; (iii) the failure to vest and maintain vested in the Agent on behalf of the Company and/or the Bank Investors, an undivided percentage ownership or security interest, to the extent of the Transferred Interest, in the Receivables included in the Transferred Interest, free and clear of any Adverse Claim; (iv) the failure to file, or any delay in filing, financing statements, continuation statements, or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any of the Affected Assets; (v) any dispute, claim, offset or defense (other than discharge in bankruptcy) of the Obligor to the payment of any Receivable included in the Transferred Interest (including, without limitation, a defense based on such Receivable or the related Contract not being legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of merchandise or services related to such Receivable or the furnishing or failure to furnish such merchandise or services; (vi) any failure of the Trans- feror, as Collection Agent or otherwise, to perform its duties or obligations in accordance with the provisions of Article VI; or (vii) any products liability claim or personal injury or property damage suit or other similar or related claim or action of whatever sort arising out of or in connection with merchandise or services which are the subject of any Receivable; provided, however, that if the Company enters into agreements for the purchase of interests in receivables from 0104420.05-01S7a 81 one or more Other Transferors, the Company shall allocate such Indemnified Amounts which are in connection with the Liquidity Provider Agreement, the Credit Support Agreement or the credit support furnished by the Credit Support Provider to the Transferor and each Other Trans- feror. SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. (a) If after the date hereof, the adoption of any Law or bank regulatory guideline or any amendment or change in the interpretation of any existing or future Law or bank regulatory guideline by any Official Body charged with the administration, interpretation or application thereof, or the compliance with any directive of any Official Body (in the case of any bank regulatory guideline, whether or not having the force of Law): (i) shall subject any Indemnified Party to any tax, duty or other charge with respect to this Agreement, the Transferred Interest, the Receivables or payments of amounts due hereunder, or shall change the basis of taxation of payments to any Indemnified Party of amounts payable in respect of this Agreement, the Transferred Interest, the Receivables or payments of amounts due hereunder or its obligation to advance funds under the Liquidity Provider Agreement or the credit support furnished by the Credit Support Provider or otherwise in respect of this Agreement, the Transferred Interest or the Receivables (except for changes in the rate of general corporate, franchise, net income or other income tax imposed on such Indemnified Party by the jurisdiction in which such Indemnified Party's principal executive office is located); (ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System) against assets of, deposits with or for the account of, or credit extended by, any Indemnified Party or shall impose on any Indemnified Party or on the United States market for cer- 0104420.05-01S7a 82 tificates of deposit or the London interbank market any other condition affecting this Agreement, the Transferred Interest, the Receivables or payments of amounts due hereunder or its obligation to advance funds under the Liquidity Provider Agreement or the credit support provided by the Credit Support Provider or otherwise in respect of this Agreement, the Transferred Interest or the Receivables; or (iii) imposes upon any Indemnified Party any other expense (including, without limitation, reasonable attorneys' fees and expenses, and expenses of litigation or preparation therefor in contesting any of the foregoing) with respect to this Agreement, the Transferred Interest, the Receivables or payments of amounts due hereunder or its obligation to advance funds under the Liquidity Provider Agreement or the credit support furnished by the Credit Support Provider or otherwise in respect of this Agreement, the Transferred Interests or the Receivables, and the result of any of the foregoing is to increase the cost to such Indemnified Party with respect to this Agreement, the Transferred Interest, the Receivables, the obligations hereunder, the funding of any purchases hereunder, the Liquidity Provider Agreement or the Credit Support Agreement, by an amount deemed by such Indemnified Party to be material, then, within ten (10) days after demand by such Indemnified Party through the Agent, the Transferor shall pay to the Agent, for the benefit of such Indemnified Party such additional amount or amounts as will compensate such Indemnified Party for such increased cost or reduction. (b) If any Indemnified Party shall have determined that after the date hereof, the adoption of any applicable Law or bank regulatory guideline regarding capital adequacy, or any change therein, or any change in the interpretation thereof by any Official Body, or any directive regarding capital adequacy (in the case of any bank regulatory guideline, whether or not having the force of law) of any such Official Body, has or would have the effect of reducing the rate of return on capital of such Indemnified Party (or its parent) as a conse- 0104420.05-01S7a 83 quence of such Indemnified Party's obligations hereunder or with respect hereto to a level below that which such Indemnified Party (or its parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Indemnified Party to be material, then from time to time, within ten (10) days after demand by such Indemnified Party through the Agent, the Transferor shall pay to the Agent, for the benefit of such Indemnified Party such additional amount or amounts as will compensate such Indemnified Party (or its parent) for such reduction. (c) The Agent will promptly notify the Transferor of any event of which it has knowledge, occurring after the date hereof, which will entitle an Indemnified Party to compensation pursuant to this Section. A notice by the Agent or the applicable Indemnified Party claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, the Agent or any applicable Indemnified Party may use any reasonable averaging and attributing methods. (d) Anything in this Section 8.2 to the contrary notwithstanding, if the Company enters into agreements for the acquisition of interests in receivables from one or more Other Transferors, the Company shall allocate the liability for any amounts under this Section 8.2 ("Section 8.2 Costs") to the Transferor and each Other Transferor; and provided, further, that if such Section 8.2 Costs are attributable to the Transferor and not attributable to any Other Transferor, the Trans- feror shall be solely liable for such Section 8.2 Costs or if such Section 8.2 Costs are attributable to Other Transferors and not attributable to the Transferor, such Other Transferors shall be solely liable for such Section 8.2 Costs. SECTION 8.3. Other Costs, Expenses and Related Matters. (a) The Transferor agrees, upon receipt of a written invoice, to pay or cause to be paid, and to save the Company and the Agent harmless against liability for the payment of, all reasonable out-of-pocket expenses (including, without limitation, attorneys', accountants' and other third parties' fees and expenses, any filing 0104420.05-01S7a 84 fees and expenses incurred by officers or employees of the Company and the Agent) incurred by or on behalf of the Company or the Agent (i) in connection with the negotiation, execution, delivery and preparation of this Agreement and any documents or instruments delivered pursuant hereto and thereto and the transactions contemplated hereby or thereby (including, without limitation, the perfection or protection of the Transferred Interest) and (ii) from time to time relating to any amendments, waivers or consents under this Agreement. (b) The Transferor agrees, upon receipt of a written invoice, to pay or cause to be paid, and to save the Company, the Bank Investors and the Agent harmless against liability for the payment of, all reasonable out-of-pocket expenses (including, without limitation, attorneys', accountants' and other third parties' fees and expenses, any filing fees and expenses incurred by officers or employees of the Company, the Bank Investors and/or the Agent) incurred by or on behalf of the Company, any Bank Investor or the Agent from time to time (i) arising in connection with the Company's, any Bank Investor's, the Agent's or the Collateral Agent's enforcement or preservation of rights (including, without limitation, the perfection and protection of the Transferred Interest under this Agreement), or (ii) arising in connection with any audit, dispute, disagreement, litigation or preparation for litigation involving this Agreement. (c) The Transferor shall pay the Agent, for the account of the Company and the Bank Investors, as applicable, on demand any Early Collection Fee due on account of the reduction of a Tranche on a day prior to the last day of its Tranche Period. SECTION 8.4. Reconveyance Under Certain Circumstances. The Transferor agrees to accept the recon- veyance from the Agent, on behalf of the Company and/or the Bank Investors, of the Transferred Interest if the Agent notifies Transferor of a material breach of any representation or warranty made or deemed made pursuant to Article III of this Agreement and Transferor shall fail to cure such breach within 15 days (or, in the case of the representations and warranties in Sections 3.1(d) and 3.1(j), 3 days) of such notice. The reconveyance price shall be paid by the Transferor to the Agent, for the account of the Company and the Bank Investors, as 0104420.05-01S7a 85 applicable, in immediately available funds on such 15th day (or 3rd day, if applicable) in an amount equal to the Aggregate Unpaids. 0104420.05-01S7a 86 ARTICLE IX GUARANTEE SECTION 9.1. Guaranty of Obligations. Tech Data unconditionally guarantees the full and prompt payment when due of all of the payment obligations and timely performance of all of the payment and performance obligations ("Obligations") of the Transferor of every kind and nature now or hereafter existing, or due or to become due, under this Agreement, to the Transferor, the Company, the Agent or any Bank Investor. Tech Data shall pay all reasonable costs and expenses including, without limitation, all court costs and attorneys' fees and expenses paid or incurred by the Transferor, the Company, the Agent or any Bank Investor in connection with the collection of all or any part of the Obligations from Tech Data. SECTION 9.2. Validity of Obligations; Irrevo- cability. Tech Data agrees that its obligations under this guaranty shall be unconditional, irrespective of (i) the validity, enforceability, discharge or disaffirmance (by any Person, including a trustee in bankruptcy) of the Obligations or of this Agreement, (ii) the absence of any attempt to collect the Obligations from the Transferor or any guarantor, (iii) the waiver or consent by the Trans- feror, Company, the Agent or any Bank Investor with respect to any provision of any instrument evidencing the Obligations, (iv) any change of the time, manner or place of payment or performance, or any other term of any of the Obligations, (v) any law, regulation or order of any jurisdiction affecting any term of any of the Obligations or rights of the Transferor, the Company, the Agent or any Bank Investor with respect thereto, (vi) the failure by the Transferor, the Company, the Agent or any Bank Investor to take any steps to perfect and maintain perfected its respective interest in the Receivables or other property acquired by the Company from the Trans- feror, or by the Transferor from Tech Data or any security or collateral related to the Obligations or (vii) any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Tech Data agrees that none of the Transferor, the Company, the Agent or any Bank Investor shall be under any obligation to marshall any assets in favor of or against or in payment of any or all of the Obligations. Tech 0104420.05-01S7a 87 Data further agrees that, to the extent that the Trans- feror makes a payment or payments to the Company, the Agent or any Bank Investor, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to the Transferor its estate, trustee, receiver or any other party, including without limitation, Tech Data, under any bankruptcy, insolvency or similar state or federal law, common law or equitable cause, then to the extent of such payment or repayment, the Obligation or part thereof which has been paid, reduced or satisfied by such amount shall be reinstated and continued in full force and effect as of the date such initial payment, reduction or satisfaction occurred. Tech Data waives all set-offs and counterclaims and all presentments, demands for performance, notices of dishonor and notices of acceptance of this guaranty. Tech Data agrees that its obligations under this guaranty shall be irrevocable. SECTION 9.3. Rights of Set-Off. Tech Data hereby authorizes the Transferor, the Company, the Agent or any Bank Investor at any time and from time to time, to the fullest extent permitted by law, to set-off and apply any and all deposits (whether general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Transfer- or, the Company, the Agent or any Bank Investor to or for the credit or the account of Tech Data against any and all of the obligations of Tech Data now or hereafter existing under this Agreement to the Transferor or the Company. Tech Data acknowledges that the Company's rights described in this Section 9.3 are in addition to other rights and remedies (including, without limitation, other rights of set-off) the Transferor or the Company may have. 0104420.05-01S7a 88 ARTICLE X THE AGENT; BANK COMMITMENT SECTION 10.1. Authorization and Action. (a) The Company and each Bank Investor hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Transaction Documents as are delegated to the Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. In furtherance, and without limiting the generality, of the foregoing, the Company and each Bank Investor hereby appoints the Agent as its agent to execute and deliver all further instruments and documents, and take all further action that the Agent may deem necessary or appropriate or that the Company or a Bank Investor may reasonably request in order to perfect, protect or more fully evidence the interests transferred or to be transferred from time to time by the Transferor hereunder, or to enable any of them to exercise or enforce any of their respective rights hereunder, including, without limitation, the execution by the Agent as secured party/assignee of such financing or continuation statements, or amendments thereto or assignments thereof, relative to all or any of the Receivables now existing or hereafter arising, and such other instruments or notices, as may be necessary or appropriate for the purposes stated hereinabove. The Company and the Majority Investors may direct the Agent to take any such incidental action hereunder. With respect to other actions which are incidental to the actions specifically delegated to the Agent hereunder, the Agent shall not be required to take any such incidental action hereunder, but shall be required to act or to refrain from acting (and shall be fully protected in acting or refraining from acting) upon the direction of the Majority Investors; provided, however, that Agent shall not be required to take any action hereunder if the taking of such action, in the reasonable determination of the Agent, shall be in violation of any applicable law, rule or regulation or contrary to any provision of this Agreement or shall expose the Agent to liability hereunder or otherwise. Upon the occurrence and during the continuance of any Termination Event or Potential Termination Event, the Agent shall take no action hereunder (other than ministerial actions or such actions as are specifically provided for herein) without the prior 0104420.05-01S7a 89 consent of the Majority Investors (which consent shall not be unreasonably withheld or delayed). The Agent shall not, without the prior written consent of all Bank Investors, agree to (i) amend, modify or waive any provision of this Agreement in any way which would (A) reduce or impair Collections or the payment of Discount or fees payable hereunder to the Bank Investors or delay the scheduled dates for payment of such amounts, (B) increase the Servicing Fee (other than as permitted pursuant to Section 6.2(b)), (C) modify any provisions of this Agreement or the Receivables Purchase Agreement relating to the timing of payments required to be made by the Trans- feror, the Seller or the Guarantor or the application of the proceeds of such payments, (D) permit the appointment of any Person (other than the Agent) as successor Collection Agent, or (E) release any property from the lien provided by this Agreement (other than as expressly contemplated herein). The Agent shall not agree to any amendment of this Agreement which increases the dollar amount of a Bank Investor's Commitment without the prior consent of such Bank Investor. In addition, the Agent shall not agree to any amendment of this Agreement not specifically described in the two preceding sentences without the consent of the related Majority Investors (which consent shall not be unreasonably withheld or delayed). "Majority Investors" shall mean, at any time, the Agent and those Bank Investors which hold Commitments aggregating in excess of 51% of the Facility Limit as of such date. In the event the Agent requests the Company's or a Bank Investor's consent pursuant to the foregoing provisions and the Agent does not receive a consent (either positive or negative) from the Company or such Bank Investor within 10 Business Days of the Company's or Bank Investor's receipt of such request, then the Company or such Bank Investor (and its percentage interest hereunder) shall be disregarded in determining whether the Agent shall have obtained sufficient consent hereunder. (b) The Agent shall exercise such rights and powers vested in it by this Agreement and the other Transaction Documents, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. 0104420.05-01S7a 90 SECTION 10.2. Agent's Reliance, Etc. Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Agent under or in connection with this Agreement or any of the other Transaction Documents, except for its or their own gross negligence or willful misconduct. Without limiting the foregoing, the Agent: (i) may consult with legal counsel (including counsel for the Transferor or the Seller), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to the Company or any Bank Investor and shall not be responsible to the Company or any Bank Investor for any statements, warranties or representations made in or in connection with this Agreement; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any of the other Transaction Documents on the part of the Transferor, the Collection Agent or Tech Data or to inspect the property (including the books and records) of the Transferor, the Collection Agent or Tech Data (iv) shall not be responsible to the Company or any Bank Investor for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any of the other Transaction Documents or any other instrument or document furnished pursuant hereto or thereto; and (v) shall incur no liability under or in respect of this Agreement or any of the other Transaction Documents by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by telex) believed by it to be genuine and signed or sent by the proper party or parties. SECTION 10.3. Credit Decision. The Company and each Bank Investor acknowledges that it has, independently and without reliance upon the Agent, any of the Agent's Affiliates, any other Bank Investor or the Company (in the case of any Bank Investor) and based upon such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement and the other Transaction Documents to which it is a party and, if it so determines, to accept the trans- 0104420.05-01S7a 91 fer of any undivided ownership interest in the Affected Assets hereunder. The Company and each Bank Investor also acknowledges that it will, independently and without reliance upon the Agent, any of the Agent's Affiliates, any other Bank Investor or the Company (in the case of any Bank Investor) and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement and the other Transaction Documents to which it is a party. SECTION 10.4. Indemnification of the Agent. The Bank Investors agree to indemnify the Agent (to the extent not reimbursed by the Transferor), ratably in accordance with their Pro Rata Shares, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent, any of the other Transaction Documents hereunder or thereunder, provided that the Bank Investors shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct. Without limitation of the foregoing, the Bank Investors agree to reimburse the Agent, ratably in accordance with their Pro Rata Shares, promptly upon demand for any out-of-pocket expenses (including counsel fees) incurred by the Agent in connection with the administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and the other Transaction Documents, to the extent that such expenses are incurred in the interests of or otherwise in respect of the Bank Investors hereunder and/or thereunder and to the extent that the Agent is not reimbursed for such expenses by the Transferor. SECTION 10.5. Successor Agent. The Agent may resign at any time by giving written notice thereof to each Bank Investor, the Company and the Transferor and may be removed at any time with cause by the Majority Investors. Upon any such resignation or removal, (i) if no Termination Event shall have occurred, the Transferor 0104420.05-01S7a 92 shall appoint a successor Agent and (ii) if a Termination Event shall have occurred, the Company and the Majority Investors shall appoint a successor Agent. The Transfer- or and the Company and each Bank Investor, as applicable, each agrees that it shall not unreasonably withhold or delay its approval of the appointment of a successor Agent. If no such successor Agent shall have been so appointed, and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation or the Majority Investors' removal of the retiring Agent, then the retiring Agent may, on behalf of the Company and the Bank Investors, appoint a successor Agent which successor Agent shall be either (i) a commercial bank organized under the laws of the United States or of any state thereof and have a combined capital and surplus of at least $50,000,000 or (ii) an Affiliate of such a bank. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Article IX shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. SECTION 10.6. Payments by the Agent. Unless specifically allocated to a Bank Investor pursuant to the terms of this Agreement, all amounts received by the Agent on behalf of the Bank Investors shall be paid by the Agent to the Bank Investors (at their respective accounts specified in their respective Assignment and Assumption Agreements) in accordance with their respective related pro rata interests in the Net Investment on the Business Day received by the Agent, unless such amounts are received after 12:00 noon on such Business Day, in which case the Agent shall use its reasonable efforts to pay such amounts to the Bank Investors on such Business Day, but, in any event, shall pay such amounts to the Bank Investors in accordance with their respective related pro rata interests in the Net Investment not later than the following Business Day. 0104420.05-01S7a 93 SECTION 10.7. Bank Commitment; Assignment to Bank Investors. (a) Bank Commitment. At any time on or prior to the Commitment Termination Date, in the event that the Company does not effect an Incremental Transfer as requested under Section 2.2(a), then at any time, the Transferor shall have the right to require the Company to assign its interest in the Net Investment in whole to the Bank Investors pursuant to this Section 10.7. In addition, at any time on or prior to the Commitment Termination Date (i) upon the occurrence of a Termination Event that results in a Termination Date or (ii) the Company elects to give notice to the Transferor of a Reinvestment Termination Date, the Transferor hereby requests and directs that the Company assign its interest in the Net Investment in whole to the Bank Investors pursuant to this Section 10.7 and the Transferor hereby agrees to pay the amounts described in Section 10.7(d) below. Provided that the Net Asset Test is satisfied, upon any such election by the Company or any such request by the Transfer- or, the Company shall make such assignment and the Bank Investors shall accept such assignment and shall assume all of the Company's obligations hereunder. In connection with any assignment from the Company to the Bank Investors pursuant to this Section 10.7, each Bank Investor shall, on the date of such assignment, pay to the Company an amount equal to its Assignment Amount. Upon any assignment by the Company to the Bank Investors contemplated hereunder, the Company shall cease to make any additional Incremental Transfers hereunder. (b) Assignment. No Bank Investor may assign all or a portion of its interests in the Net Investment, the Receivables, and Collections, Related Security and Proceeds with respect thereto and its rights and obligations hereunder to any Person unless approved in writing by the Agent. In the case of an assignment by the Company to the Bank Investors or by a Bank Investor to another Person, the assignor shall deliver to the assignee(s) an Assignment and Assumption Agreement in substantially the form of Exhibit G attached hereto, duly executed, assigning to the assignee a pro rata interest in the Net Investment, the Receivables, and Collections, Related Security and Proceeds with respect thereto and the assignor's rights and obligations hereunder and the 0104420.05-01S7a 94 assignor shall promptly execute and deliver all further instruments and documents, and take all further action, that the assignee may reasonably request, in order to protect, or more fully evidence the assignee's right, title and interest in and to such interest and to enable the Agent, on behalf of such assignee, to exercise or enforce any rights hereunder and under the other Transaction Documents to which such assignor is or, immediately prior to such assignment, was a party. Upon any such assignment, (i) the assignee shall have all of the rights and obligations of the assignor hereunder and under the other Transaction Documents to which such assignor is or, immediately prior to such assignment, was a party with respect to such interest for all purposes of this Agreement and under the other Transaction Documents to which such assignor is or, immediately prior to such assignment, was a party (it being understood that the Bank Investors, as assignees, shall (x) be obligated to effect Incremental Transfers under Section 2.2(a) in accordance with the terms thereof, notwithstanding that the Company was not so obligated and (y) not have the right to elect the commencement of the amortization of the Net Investment pursuant to the definition of "Rein- vestment Termination Date", notwithstanding that the Company had such right) and (ii) the assignor shall relinquish its rights with respect to such interest for all purposes of this Agreement and under the other Transaction Documents to which such assignor is or, immediately prior to such assignment, was a party. No such assignment shall be effective unless the Administrative Agent, on behalf of the Company, and the Transferor shall have consented thereto and a fully executed copy of the related Assignment and Assumption Agreement shall be delivered to the Agent. All costs and expenses of the Agent and the initial Bank Investor as assignor incurred in connection with any assignment hereunder shall be borne by the Transferor and not by the Agent or the initial Bank Investor. No Bank Investor shall assign any portion of its Commitment hereunder without also simultaneously assigning an equal portion of its interest in the Liquidity Provider Agreement. (c) Effects of Assignment. By executing and delivering an Assignment and Assumption Agreement, the assignor and assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Assump- 0104420.05-01S7a 95 tion Agreement, the assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement, the other Transaction Documents or any other instrument or document furnished pursuant hereto or thereto or the execution, legality, validity, enforceability, genuineness, sufficiency or value or this Agreement, the other Transaction Documents or any such other instrument or document; (ii) the as- signor makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Transferor, the Seller or the Collection Agent or the performance or observance by the Transferor, the Seller or the Collection Agent of any of their respective obligations under this Agreement, the Receivables Purchase Agreement, the other Transaction Documents or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, the Receivables Purchase Agreement and such other instruments, documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Assumption Agreement and to purchase such interest; (iv) such assignee will, independently and without reliance upon the Agent, or any of its Affiliates, or the assignor and based on such agreements, documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Transaction Documents; (v) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement, the other Transaction Documents and any other instrument or document furnished pursuant hereto or thereto as are delegated to the Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto and to enforce its respective rights and interests in and under this Agreement, the other Transaction Documents, the Receivables, the Contracts and the Related Security; (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the other Transaction Documents are required to be performed by it as the assignee of the assignor; and (vii) such assignee agrees that it will not institute against the Company any proceeding of the type referred to in Section 11.9 prior to the date which is 0104420.05-01S7a 96 one year and one day after the payment in full of all Commercial Paper issued by the Company. (d) Transferor's Obligation to Pay Cer- tain Amounts; Additional Assignment Amount. The Trans- feror shall pay to the Agent, for the account of the Company, in connection with any assignment by the Company to the Bank Investors pursuant to this Section 10.7, an aggregate amount equal to all Discount to accrue through the end of each outstanding Tranche Period plus all other Aggregate Unpaids (other than the Net Investment). To the extent that such Discount relates to interest or discount on Related Commercial Paper, if the Transferor fails to make payment of such amounts at or prior to the time of assignment by the Company to the Bank Investors, such amount shall be paid by the Bank Investors (in accordance with their respective Pro Rata Shares) to the Company as additional consideration for the interests assigned to the Bank Investors and the amount of the "Net Investment" hereunder held by the Bank Investors shall be increased by an amount equal to the additional amount so paid by the Bank Investors. (e) Administration of Agreement After Assignment. After any assignment by the Company to the Bank Investors pursuant to this Section 10.7 (and the payment of all amounts owing to the Company in connection therewith), all rights of the Administrative Agent and the Collateral Agent set forth herein shall be deemed to be afforded to the Agent on behalf of the Bank Investors instead of either such party. (f) Payments. After any assignment by the Company to the Bank Investors pursuant to this Section 10.7, all payments to be made hereunder by the Transferor or the Collection Agent to the Bank Investors shall be made to the Agent's account as such account shall have been notified to the Transferor and the Collection Agent. (g) Downgrade of Bank Investor. If at any time prior to any assignment by the Company to the Bank Investors as contemplated pursuant to this Section 10.7, the short term debt rating of any Bank Investor shall be "A-2" or "P-2" from Standard & Poor's or Moody's, respectively, with negative credit implications, such Bank Investor, upon request of the Agent, shall, 0104420.05-01S7a 97 within 30 days of such request, assign its rights and obligations hereunder to another financial institution (which institution's short term debt shall be rated at least "A-2" and "P-2" from Standard & Poor's and Moody's, respectively, and which shall not be so rated with negative credit implications). If the short term debt rating of a Bank Investor shall be "A-3" or "P-3", or lower, from Standard & Poor's or Moody's, respectively (or such rating shall have been withdrawn by Standard & Poor's or Moody's), such Bank Investor, upon request of the Agent, shall, within five (5) Business Days of such request, assign its rights and obligations hereunder to another financial institution (which institution's short term debt shall be rated at least "A-2" and "P-2" from Standard & Poor's and Moody's, respectively, and which shall not be so rated with negative credit implications). In either such case, if any such Bank Investor shall not have assigned its rights and obligations under this Agreement within the applicable time period described above, the Company shall have the right to require such Bank Investor to accept the assignment of such Bank Investor's Pro Rata Share of the Net Investment; such assignment shall occur in accordance with the applicable provisions of this Section 10.7. Such Bank Investor shall be obligated to pay to the Company, in connection with such assignment, in addition to the Pro Rata Share of the Net Investment, an amount equal to the interest component of the outstanding Commercial Paper issued to fund the portion of the Net Investment being assigned to such Bank Investor, as reasonably determined by the Agent. Notwithstanding anything contained herein to the contrary, upon any such assignment to a downgraded Bank Investor as contemplated pursuant to the immediately preceding sentence, the aggregate available amount of the Facility Limit, solely as it relates to new Incremental Transfers by the Company, shall be reduced by the amount of unused Commitment of such downgraded Bank Investor; it being understood and agreed, that nothing in this sentence or the two preceding sentences shall affect or diminish in any way any such downgraded Bank Investor's Commitment to the Transferor or such downgraded Bank Investor's other obligations and liabilities hereunder and under the other Transaction Documents. 0104420.05-01S7a 98 ARTICLE XI MISCELLANEOUS SECTION 11.1. Term of Agreement. This Agreement shall terminate on the date following the Termination Date upon which the Net Investment has been reduced to zero, all accrued Discount and Servicing Fees have been paid in full, and all other Aggregate Unpaids have been paid in full, in each case, in cash; provided, however, that (i) the rights and remedies of the Agent, the Company, the Bank Investors and the Administrative Agent with respect to any representation and warranty made or deemed to be made by the Transferor pursuant to this Agreement, (ii) the indemnification and payment provisions of Article VIII, (iii) Tech Data's obligations under Article IX and (iv) the agreement set forth in Section 11.8 hereof, shall be continuing and shall survive any termination of this Agreement. SECTION 11.2. Waivers; Amendments. No failure or delay on the part of the Agent, the Company, the Administrative Agent or any Bank Investor in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Transferor, the Company, the Agent and the Majority Investors. SECTION 11.3. Notices. Except as provided below, all communications and notices provided for hereunder shall be in writing (including bank wire, telex, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other party at its address or telecopy number set forth below or at such other address or telecopy number as such party may hereafter specify for the purposes of notice to such party. Each such notice or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified in this 0104420.05-01S7a 99 Section 11.3 and confirmation is received, (ii) if given by mail 3 Business Days following such posting, postage prepaid, U.S. certified or registered, (iii) if given by overnight courier, one (1) Business Day after deposit thereof with a national overnight courier service, or (iv) if given by any other means, when received at the address specified in this Section 11.3. However, anything in this Section 11.3 to the contrary notwithstanding, the Transferor hereby authorizes the Company to effect Transfers, Tranche Period and Tranche Rate selections based on telephonic notices made by any Person which the Company in good faith believes to be acting on behalf of the Transferor. The Transferor agrees to deliver promptly to the Company a written confirmation of each telephonic notice signed by an authorized officer of Transferor. However, the absence of such confirmation shall not affect the validity of such notice. If the written confirmation differs in any material respect from the action taken by the Company, the records of the Company shall govern absent manifest error. If to the Company: Enterprise Funding Corporation c/o Merrill Lynch Money Markets Inc. World Financial Center--South Tower 225 Liberty Street New York, New York 10080 Telephone: (212) 236-7200 Telecopy: (212) 236-7584 (with a copy to the Administrative Agent) If to the Transferor: Tech Data Finance, Inc. 5000 Executive Parkway San Ramon, California 94583 Telephone: (510) 244-1641 Telecopy: (510) 244-1641 If to Tech Data: Tech Data Corporation 5350 Tech Data Drive Clearwater, Florida 34620 Attention: Treasurer 0104420.05-01S7a 100 Telephone: (813) 539-7429 Telecopy: (813) 538-7803 (with a copy to General Counsel) If to the Agent: NationsBank, N.A. NationsBank Corporate Center--10th Floor Charlotte, North Carolina 28255 Attention: Michelle M. Heath-- Structured Finance Telephone: (704) 386-7922 Telecopy: (704) 388-9169 If to the Administrative Agent: NationsBank, N.A. NationsBank Corporate Center--10th Floor Charlotte, North Carolina 28255 Attention: Michelle M. Heath-- Structured Finance Telephone: (704) 386-7922 Telecopy: (704) 388-9169 If to the Bank Investors, at their respective addresses set forth on the signature pages hereto or of the Assignment and Assumption Agreement pursuant to which it became a party hereto. SECTION 11.4. Governing Law; Submission to Jurisdiction; Integration. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE TRANSFEROR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The Transferor hereby irrevocably waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. Nothing in this Sec- 0104420.05-01S7a 101 tion 11.4 shall affect the right of the Company to bring any action or proceeding against the Transferor or its property in the courts of other jurisdictions. (b) This Agreement contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire Agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings, including but not limited to the mandate letter dated November 16, 1993. SECTION 11.5. Severability; Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Any provisions of this Agreement which are prohibited or unen- forceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. SECTION 11.6. Successors and Assigns.(a) This Agreement shall be binding on the parties hereto and their respective successors and assigns; provided, however, that the Transferor may not assign any of its rights or delegate any of its duties hereunder without the prior written consent of the Company. No provision of this Agreement shall in any manner restrict the ability of the Company to assign, participate, grant security interests in, or otherwise transfer any portion of the Transferred Interest. (b) The Transferor hereby agrees and consents to the assignment by the Company from time to time of all or any part of its rights under, interest in and title to this Agreement and the Transferred Interest to any Liquidity Provider. In addition, the Transferor hereby consents to and acknowledges the assignment by the Company of all of its rights under, interest in and title 0104420.05-01S7a 102 to this Agreement and the Transferred Interest to the Collateral Agent. SECTION 11.7. Waiver of Confidentiality. The Transferor and Tech Data hereby consent to the disclosure of any non-public information with respect to it received by the Company, the Agent, any Bank Investor or the Administrative Agent to any of the Company, the Agent, any nationally recognized rating agency rating the Company's Commercial Paper, the Administrative Agent, the Collateral Agent, any Bank Investor or potential Bank Investor, the Liquidity Provider or the Credit Support Provider in relation to this Agreement. SECTION 11.8. Confidentiality Agreement. The Transferor and Tech Data hereby agree that they will not disclose the contents of this Agreement or any other proprietary or confidential information of the Company, the Agent, the Administrative Agent, any Bank Investor, the Collateral Agent, the Liquidity Provider or the Credit Support Provider to any other Person except (i) its auditors and attorneys, employees or financial advi- sors (other than any commercial bank) and any nationally recognized rating agency, provided such auditors, attorneys, employees, financial advisors or rating agencies are informed of the highly confidential nature of such information or (ii) as otherwise required by applicable law or order of a court of competent jurisdiction. SECTION 11.9. No Bankruptcy Petition Against the Company. The Transferor and Tech Data each hereby covenant and agree that, prior to the date which is one year and one day after the payment in full of all outstanding Commercial Paper or other indebtedness of the Company, it will not institute against, or join any other Person in instituting against, the Company any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. SECTION 11.10. No Recourse Against Stockholders, Officers or Directors. No recourse under any obligation, covenant or agreement of the Company contained in this Agreement shall be had against Merrill Lynch Money Markets Inc. (or any affiliate thereof), or any stockholder, officer or director of the Company, as such, by 0104420.05-01S7a 103 the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that this Agreement is solely a corporate obligation of the Company, and that no personal liability whatsoever shall attach to or be incurred by Merrill Lynch Money Markets Inc. (or any affiliate thereof), or the stockholders, officers or directors of the buyer, as such, or any of them, under or by reason of any of the obligations, covenants or agreements of the Company contained in this Agreement, or implied therefrom, and that any and all personal liability for breaches by the Company of any of such obligations, covenants or agreements, either at common law or at equity, or by statute or constitution, of Merrill Lynch Money Markets Inc. (or any affiliate thereof) and every such stockholder, officer or director of the Company is hereby expressly waived as a condition of and consideration for the execution of this Agreement. SECTION 11.11. Characterization of the Transactions Contemplated by the Agreement. It is the intention of the parties that the transactions contemplated hereby constitute the sale of the Transferred Interest, conveying good title thereto free and clear of any Adverse Claims to the Agent, on behalf of the Company and the Bank Investors, and that the Transferred Interest not be part of the Transferor's estate in the event of an insolvency. If, notwithstanding the foregoing, the transactions contemplated hereby should be deemed a financing, the parties intend that the Transferor shall be deemed to have granted to the Agent, on behalf of the Company and the Bank Investors, and the Transferor hereby grants to the Agent, on behalf of the Company and the Bank Investors, a first priority perfected security interest in all of the Transferor's right, title and interest in, to and under the Receivables, together with Related Security and Collections with respect thereto, and that this Agreement shall constitute a security agreement under applicable law. SECTION 11.12. Optional Reconveyance of All Receivables. The Transferor shall have the option at any time to require the Agent, on behalf of the Company and the Bank Investors, to reconvey all of it's interest in the Receivables to the Transferor subject to the following terms and conditions: (a) the Transferor shall give the Agent not less than 10 Business Days notice of the 0104420.05-01S7a 104 Transferor's exercise of this option and (b) simultaneously with the reconveyance by the Agent to the Trans- feror of the Agent's interest in the Receivables, the Transferor shall pay to the Agent, for the benefit of the Company and the Bank Investors, an amount equal to the Net Investment plus all discount accrued and to accrue on the Company's Related Commercial Paper to maturity, together with any other costs associated with the receipt by the Company of the Net Investment on a day other than the last day of a Tranche Period, along with any other amounts owing hereunder to the Company or the Bank Investors by the Transferor. SECTION 11.13. Mandatory Reconveyance of Certain Receivables. The Agent, on behalf of the Company and the Bank Investors, upon each occasion on which the Transferor shall be required to reconvey any Receivables to Tech Data pursuant to Section 7.2(a) of the Purchase Agreement, shall be considered to have reconveyed and does hereby reconvey to the Transferor such Receivables (including the Transferred Interest therein) and upon such reconveyance, hereby terminates its interest in any such Receivables; provided that no such reconveyance by the Agent shall occur or be deemed to have occurred if (a) any Event of Termination shall have occurred and be continuing hereunder or (b) Tech Data shall not have contemporaneously with such reconveyance sold to the Transferor a substitute receivable as described in Section 7.2(b) of the Purchase Agreement. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 0104420.05-01S7a 105 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amended and Restated Transfer and Administration Agreement as of the day first written above. ENTERPRISE FUNDING CORPORATION, as Company By: /S/ STEWART L. CUTLER Name: Stewart L. Cutler Title: Vice President TECH DATA FINANCE, INC., as Transferor By: /S/ ARTHUR W. SINGLETON Name: Arthur W. Singleton Title: Treasurer TECH DATA CORPORATION, as Collection Agent and Guarantor By: /S/ ARTHUR W. SINGLETON Name: Arthur W. Singleton Title: Treasurer NATIONSBANK, N.A., as Agent By: /S/ BRIAN C. BLAKELY Name: Brian C. Blakely Title: Investment Banking Officer 0104420.05-01S7a 106 Commitment NATIONSBANK, N.A., as $306,000,000.00 Bank Investor By: /S/ BRIAN C. BLAKELY Name: Brian C. Blakely Title: Investment Banking Officer 0104420.05-01S7a 107 EX-10.RR 3 AMENDMENT NUMBER 1 TO AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT AMENDMENT NUMBER 1 TO AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (this "Amendment"), dated as of March 3, 1997, among TECH DATA FINANCE, INC., a California corporation, as transferor (the "Transferor"), TECH DATA CORPORATION, a Florida corporation ("Tech Data"), as collection agent and as guarantor (in such capacities respectively, the "Collection Agent" and the "Guarantor"), ENTERPRISE FUNDING CORPORATION, a Delaware corporation (the "Company"), and NATIONSBANK, N.A., a national banking association ("NationsBank"), as agent for the Company and the Bank Investors (in such capacity, the "Agent") and as a Bank Investor, amending that certain Amended and Restated Transfer and Administration Agreement dated as of January 21, 1997 among the Transfer-or, the Collection Agent, the Guarantor, the Company, the Agent and the Bank Investor (the "Original Agreement" and said agreement as amended by this Amendment, the "Agreement"). WHEREAS, the Transferor has requested that the Company and the Agent agree to an increase in the Facility Limit and the Maximum Net Investment under the Original Agreement; WHEREAS, the Agent has requested an amendment to the defini- tion of Concentration Factor under the Original Agreement; WHEREAS, on the terms and conditions set forth herein, the parties hereto consent to such amendments; and WHEREAS, capitalized terms used herein shall have the meanings assigned to such terms in the Original Agreement; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows: SECTION 1. Amendment to Definitions. (a) The definition of "Concentration Factor" is hereby deleted and replaced with the following (solely for convenience added language is italicized): 0111920.07-01S7a ""Concentration Factor" means for any Designated Obligor (a) 2% of the Outstanding Balance of all Eligible Receivables; provided however, that for up to three (3) Designated Obligors at any one time, 2.5% of the Outstanding Balance of all Eligible Receivables at such time; provided further, however, that with respect to any Designated Obligor and its affiliates whose long term unsecured debt obligations are rated at least "A1" by Moody's and at least "A+" by Standard & Poor's and with respect to which rating neither Moody's nor Standard & Poor's shall have made a public announcement anticipating a downgrading of such Designated Obligor's long term unsecured debt obligations to a rating less than the aforementioned ratings ("A1/A+ Rated Obligors") 5% of the Outstanding Balance of all Eligible Receivables at such time, or (b) such other greater amount determined by the Agent in the reasonable exercise of its good faith judgment and with the consent of the Bank Investors and disclosed in a written notice delivered to the Transferor. (b) The definition of "Facility Limit" is hereby amended by deleting the amount "306,000,000" in the text thereof and replacing it with the amount "331,500,000". (c) The definition of "Maximum Net Investment" is hereby amended by deleting the amount "300,000,000" in the text thereof and replacing it with the amount "325,000,000". (d) The definition of "Loss Reserve" is hereby amended by deleting the amount "25,000,000" in the text of the final paragraph thereof and replacing it with the amount "27,100,000". SECTION 2. Amendment to Section 5.2(c). Section 5.2(c) of the Original Agreement is hereby deleted and replaced with the following: "(c) No Change in Business or Credit and Collection Policy. The Transferor will not engage in any business other than acquiring accounts receivable from Tech Data pursuant to the Purchase Agreement, financing such acquisition pursuant hereto, making loans to Tech Data and Subsidiaries of Tech Data and other activities incidental thereto. The Transferor will not make any change in 0111920.07-01S7a 2 the Credit and Collection Policy, which change would impair the collectibility of the Receivables in a material respect." SECTION 3. Amendments (a) Amendment to Section 10.1(a). Section 10.1(a) of the original Agreement is hereby deleted and replaced with the following (solely for convenience changed language is italicized): "(a) The Company and each Bank Investor hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Transaction Documents as are delegated to the Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. In furtherance, and without limiting the generality, of the foregoing, the Company and each Bank Investor hereby appoints the Agent as its agent to execute and deliver all further instruments and documents, and take all further action that the Agent may deem necessary or appropriate or that the Company or a Bank Investor may reasonably request in order to perfect, protect or more fully evidence the interests transferred or to be transferred from time to time by the Transferor hereunder, or to enable any of them to exercise or enforce any of their respective rights hereunder, including, without limitation, the execution by the Agent as secured party/assignee of such financing or continuation statements, or amendments thereto or assignments thereof, relative to all or any of the Receivables now existing or hereafter arising, and such other instruments or notices, as may be necessary or appropriate for the purposes stated hereinabove. The Company and/or the Majority Investors may direct the Agent to take any such incidental action hereunder. With respect to other actions which are incidental to the actions specifically delegated to the Agent hereunder, the Agent shall not be required to take any such incidental action hereunder, but shall be required to act or to refrain from acting (and shall be fully protected in acting or refraining from acting) upon the direction of the Majority Investors; provided, however, that Agent shall not be required to take any action hereunder if the taking of such action, in the reasonable determination of the Agent, shall be in violation of any applicable law, rule or regulation or contrary to any provision of this Agreement or shall expose the 0111920.07-01S7a 3 Agent to liability hereunder or otherwise. Upon the occurrence and during the continuance of any Termination Event or Potential Termination Event, the Agent shall take no action hereunder (other than ministerial actions or such actions as are specifically provided for herein) without the prior consent of the Majority Investors (which consent shall not be unreasonably withheld or delayed). The Agent shall not, without the prior written consent of all Bank Investors, agree to (i) amend, modify or waive any provision of this Agreement in any way which would (A) reduce or impair Collections or the payment of Discount or fees payable hereunder to the Bank Investors or delay the scheduled dates for payment of such amounts, (B) increase the Servicing Fee (other than as permitted pursuant to Section 6.2(b)), (C) modify any provisions of this Agreement or the Receivables Purchase Agreement relating to the timing of payments required to be made by the Transferor, the Seller or the Guarantor or the application of the proceeds of such payments, (D) permit the appointment of any Person (other than the Agent) as successor Collection Agent, (E) release any property from the lien provided by this Agreement (other than as expressly contemplated herein) or (F) release Tech Data from any of its obligations under the Guaranty. Notwithstanding Section 11.2 hereof, the Agent (together with the Transferor, Tech Data, the Company and the applicable Bank Investor or financial institution) may agree to any amendment of this Agreement which (A) increases the dollar amount of a Bank Investor's Commitment (and similarly increases the Facility Limit and the Maximum Net Investment) or (B) increases the Facility Limit (and similarly increases the Maximum Net Investment) by adding a financial institution as a Bank Investor party hereto; provided, that in each case after giving effect to any such amendment the aggregate Bank Investors' Commitment at least equals the Facility Limit, and provided, further, that no such amendment shall increase the dollar amount of a Bank Investor's Commitment without the prior consent of such Bank Investor. In addition, the Agent shall not agree to any amendment of this Agreement not specifically described in the two preceding sentences without the consent of the related Majority Investors (which consent shall not be unreasonably withheld or delayed). "Majority Investors" shall mean, at any time, the Agent and those Bank Investors which hold Commitments aggregating in excess of 66 and 2/3% of the Facility Limit as of such date. In the event the 0111920.07-01S7a 4 Agent requests the Company's or a Bank Investor's consent pursuant to the foregoing provisions and the Agent does not receive a consent (either positive or negative) from the Company or such Bank Investor within 10 Business Days of the Company's or Bank Investor's receipt of such request, then the Company or such Bank Investor (and its percentage interest hereunder) shall be disregarded in determining whether the Agent shall have obtained sufficient consent hereunder. " (b) Amendment to Section 10.5. Section 10.5 of the original Agreement is hereby deleted and replaced with the following (solely for convenience additional language is italicized): "SECTION 10.5 Successor Agent. The Agent may resign at any time by giving written notice thereof to each Bank Investor, the Company and the Transferor and may be removed at any time with cause by the Majority Investors. Upon any such resignation or removal, (i) if no Termination Event shall have occurred, the Transferor,with the consent of the Majority Investors, shall appoint a successor Agent and (ii) if a Termination Event shall have occurred, the Company and the Majority Investors shall appoint a successor Agent. The Transferor and the Company and each Bank Investor, as applicable, each agrees that it shall not unreasonably withhold or delay its approval of the appointment of a successor Agent. If no such successor Agent shall have been so appointed, and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation or the Majority Investors' removal of the retiring Agent, then the retiring Agent may, on behalf of the Company and the Bank Investors, appoint a successor Agent which successor Agent shall be either (i) a commercial bank organized under the laws of the United States or of any state thereof and have a combined capital and surplus of at least $50,000,000 or (ii) an Affiliate of such a bank. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Article IX shall continue to inure to its benefit as to any 0111920.07-01S7a 5 actions taken or omitted to be taken by it while it was Agent under this Agreement." (c) Amendment to Section 11.6(a). Section 11.6(a) of the original Agreement is hereby deleted and replaced with the following (solely for convenience additional language is italicized): "(a) This Agreement shall be binding on the parties hereto and their respective successors and assigns; provided, however, that the Transferor may not assign any of its rights or delegate any of its duties hereunder without the prior written consent of the Company and the Majority Investors. No provision of this Agreement shall in any manner restrict the ability of the Company to assign, participate, grant security interests in, or otherwise transfer any portion of the Transferred Interest." SECTION 4. Conditions Precedent. This Amendment shall not become effective until the Agent shall have received the following: (a) A copy of the Resolutions of the Board of Directors of the Transferor and Tech Data certified by its Secretary approving this Amendment and the other documents to be delivered by the Transferor and Tech Data hereunder; (b) A Certificate of the Secretary of the Transferor and Tech Data certifying (i) the names and signatures of the officers authorized on its behalf to execute this Amendment and any other documents to be delivered by it hereunder (on which Certificates the Company, the Agent and the Bank Investors may conclusively rely until such time as the Agent shall receive from the Trans-feror and Tech Data a revised Certificate meeting the requirements of this clause (b)(i)) and (ii) a copy of the Transferor's and Tech Data's By-Laws; (c) An opinion of David Vetter, counsel to Tech Data, with respect to certain corporate matters and the enforceability of the Agreement as amended hereby in form and substance acceptable to the Agent; (d) An opinion of Heller, Ehrman, White & McAuliffe, special California counsel to the Transferor, addressing certain corporate matters and the enforceability of the Agreement as amended hereby in form and substance acceptable to the Agent; and 0111920.07-01S7a 6 (e) A responsible officer's certificate of the Transferor and Tech Data executed by Arthur W. Singleton, Secretary of the Transferor and Tech Data, respectively. SECTION 5. Representations and Warranties. The Transferor hereby makes to the Company, on and as of the date hereof, all of the representations and warranties set forth in Section 3.1 of the Original Agreement. In addition, the Collection Agent and the Guarantor hereby make to the Company, on the date hereof, all the representations and warranties set forth in Section 3.3 of the Original Agreement. SECTION 6. Amendment and Waiver. No provision hereof may be amended, waived, supplemented, restated, discharged or terminated without the written consent of the Transferor, the Company, the Agent and the Majority Investors. SECTION 7. Successors and Assigns. This Amendment shall bind, and the benefits hereof shall inure to the parties hereof and their respective successors and permitted assigns; provided, however, the Transferor may not assign any of its rights or delegate any of its duties under this Amendment without the prior written consent of the Company. SECTION 8. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE TRANSFEROR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 9. Severability; Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument. Any provisions of this Amendment which are prohibited or unen-forceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction 0111920.07-01S7a 7 shall not invalidate or render unenforceable such provision in any other juris- diction. SECTION 10. Captions. The captions in this Amendment are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. SECTION 11. Ratification. Except as expressly affected by the provisions hereof, the Original Agreement as amended by this Amendment shall remain in full force and effect in accordance with its terms and ratified and confirmed by the parties hereto. On and after the date hereof, each reference in the Original Agreement to "this Agreement", "hereunder", "herein" or words of like import shall mean and be a reference to the Original Agreement as amended by this Amendment. 0111920.07-01S7a 8 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first written above. ENTERPRISE FUNDING CORPORATION, as Company By: /S/ STEWART L. CUTLER Name: Stewart L. Cutler Title: Vice President TECH DATA FINANCE, INC., as Transferor By: /S/ JEFFERY P. HOWELLS Name: Jeffery P. Howells Title: President TECH DATA CORPORATION, as Collection Agent and Guarantor By: /S/ JEFFERY P. HOWELLS Name: Jeffery P. Howells Title: Senior Vice President of Finance NATIONSBANK, N.A., as Agent and Bank Investor By: /S/ STAN MIEHUAS Name: Stan Meihuas Title: Vice President EX-10.SS 4 REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT by and among TECH DATA CORPORATION TECH DATA FRANCE, S.N.C., as Multicurrency Facilities Borrowers TECH DATA CANADA INC., as TD Canada NATIONSBANK, NATIONAL ASSOCIATION, CIBC INC., BARNETT BANK OF PINELLAS COUNTY, NBD BANK, THE BANK OF NOVA SCOTIA, CREDIT LYONNAIS, ROYAL BANK OF CANADA, PNC BANK, KENTUCKY, INC. SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION FIRST UNION NATIONAL BANK OF FLORIDA, DEUTSCHE BANK AG NEW YORK AND/OR CAYMAN ISLANDS BRANCHES and THE SAKURA BANK, LIMITED, as Domestic Facilities Lenders CANADIAN IMPERIAL BANK OF COMMERCE and THE BANK OF NOVA SCOTIA, as Canadian Facilities Lenders and NATIONSBANK, NATIONAL ASSOCIATION, as Agent and CANADIAN IMPERIAL BANK OF COMMERCE, as Canadian Agent May 23, 1996 TABLE OF CONTENTS ARTICLE I Definitions and Terms 1.01 Definitions .......................................................... 3 1.02 Rules of Interpretation .............................................. 35 ARTICLE II The Multicurrency Facilities 2.01 Revolving Credit Facility ............................................ 37 2.02 Payment of Interest .................................................. 41 2.03 Payment of Principal ................................................. 42 2.04 Competitive Bid Loans ................................................ 43 2.05 Multicurrency Facilities Notes. ...................................... 47 2.06 Pro Rata Payments .................................................... 48 2.07 Reductions ........................................................... 48 2.08 Increase and Decrease in Amounts ..................................... 49 2.09 Conversions and Elections of Subsequent Interest Periods ..................................................... 49 2.10 Unused Fee ........................................................... 50 2.11 Deficiency Advances .................................................. 50 2.12 Adjustments by Agent ................................................. 51 2.13 Use of Proceeds ...................................................... 51 2.14 Extension of Revolving Credit Termination Date ....................... 51 2.15 Swing Line ........................................................... 51 2.16 Additional Multicurrency Facilities Borrowers .........................53 2.17 One Loan ............................................................. 54 2.18 Letters of Credit .................................................... 55 2.19 Acceptances .......................................................... 55 2.20 Creation of Acceptance ............................................... 56 2.21 Reimbursement ........................................................ 57 2.22 Domestic Letter of Credit Fee ........................................ 62 2.23 Administrative Fees and Reserves ..................................... 62 ARTICLE III CANADIAN FACILITIES 3.01 Revolving Credit Facility ............................................ 63 3.02 Payment of Interest .................................................. 67 3.03 Payment of Principal ................................................. 69 3.04 Evidence of Indebtedness. ............................................ 70 3.05 Pro Rata Payments .................................................... 70 3.06 Reductions ........................................................... 71 3.07 Increase and Decrease in Amounts ..................................... 71 3.08 Conversions and Elections of Subsequent Interest Periods ..................................................... 71 3.09 Unused Fee ........................................................... 72 i 3.10 Deficiency Advances .................................................. 72 3.11 Use of Proceeds ...................................................... 73 3.12 Extension of Revolving Credit Termination Date ....................... 73 3.13 Letters of Credit .................................................... 73 3.14 Acceptances .......................................................... 74 3.15 Reimbursement ........................................................ 77 3.16 Canadian Letter of Credit Fee ........................................ 81 3.17 Administrative Fees and Reserves ..................................... 82 3.18 Maximum Rate of Return ............................................... 82 3.19 Reset of Canadian Lenders, Portion on Default ........................ 82 ARTICLE IV Yield Protection and Illegality 4.01 Additional Costs ..................................................... 83 4.02 Suspension of Loans .................................................. 84 4.03 Illegality ........................................................... 85 4.04 Compensation ......................................................... 85 4.05 Alternate Loan and Lender ............................................ 86 4.06 Taxes ................................................................ 86 4.07 Restricted Lender .................................................... 88 4.08 Funding .............................................................. 88 ARTICLE V Conditions to Making Loans, Issuing Letters of Credit and Creating Acceptances 5.01 Conditions of Initial Advance and Issuance of Letters of Credit and Creating Acceptances ........................ 89 5.02 Conditions of Loans .................................................. 91 ARTICLE VI Security 6.01 Guaranties ........................................................... 93 6.02 Further Assurances ................................................... 93 6.03 New Subsidiaries ..................................................... 93 ARTICLE VII Representations and Warranties 7.01 Representations and Warranties as to Borrowers and Subsidiaries ..................................................... 94 7.02 Representations and Warranties of TDC ................................ 95 ii ARTICLE VIII Affirmative Covenants 8.01 Financial Reports, Etc .............................................. 101 8.02 Maintain Properties ................................................. 102 8.03 Existence, Qualification, Etc ....................................... 102 8.04 Regulations and Taxes ............................................... 103 8.05 Insurance ........................................................... 103 8.06 True Books .......................................................... 103 8.07 Pay Indebtedness to Lenders and Perform Other Covenants ..................................................... 103 8.08 Right of Inspection ................................................. 103 8.09 Observe all Laws .................................................... 103 8.10 Covenants Extending to Subsidiaries ................................. 103 8.11 Officer's Knowledge of Default ...................................... 104 8.12 Suits or Other Proceedings .......................................... 104 8.13 Environmental Reports ............................................... 104 8.14 Notice of Discharge of Hazardous Material or Environmental Complaint .......................................... 104 8.15 Indemnification ..................................................... 104 8.16 Further Assurances .................................................. 105 8.17 ERISA Requirement ................................................... 105 8.18 Continued Operations ................................................ 105 8.19 Use of Proceeds ..................................................... 106 8.20 New Subsidiaries .................................................... 106 ARTICLE IX Negative Covenants 9.01 Asset Coverage Ratio ................................................ 108 9.02 Net Worth ........................................................... 108 9.03 Indebtedness to Total Capital ....................................... 108 9.04 EBIT to Interest Expense. ........................................... 108 9.05 Lease Expense Ratio ................................................. 108 9.06 Indebtedness ........................................................ 108 9.07 Liens ............................................................... 109 9.08 Transfer of Assets .................................................. 109 9.09 Investments ......................................................... 110 9.10 Merger or Consolidation ............................................. 110 9.11 Transactions with Affiliates ........................................ 111 9.12 ERISA ............................................................... 111 9.13 Capital Expenditures ................................................ 112 9.14 Fiscal Year ......................................................... 112 9.15 Rate Hedging Obligations ............................................ 112 9.16 Acquisition ......................................................... 112 9.17 Transfer and Administration Agreement ............................... 112 9.18 Existing TD France Subsidiaries ..................................... 112 9.19 Lease-Backs ......................................................... 112 9.20 Dividends or Distributions .......................................... 113 iii 9.21 Negative Pledge ..................................................... 113 ARTICLE X Events of Default and Acceleration 10.01 Events of Default .................................................. 114 10.02 Agent to Act ....................................................... 118 10.03 Cumulative Rights .................................................. 118 10.04 No Waiver .......................................................... 118 10.05 Default ............................................................ 118 10.06 Allocation of Proceeds ............................................. 118 ARTICLE XI The Agents 11.01 Appointment ........................................................ 120 11.02 Attorneys-in-fact .................................................. 120 11.03 Limitation on Liability ............................................ 120 11.04 Reliance ........................................................... 121 11.05 Notice of Default .................................................. 121 11.06 No Representations ................................................. 121 11.07 Indemnification .................................................... 122 11.08 Lender ............................................................. 122 11.09 Resignation ........................................................ 122 11.10 Sharing of Payments, etc ........................................... 123 11.11 Fees ............................................................... 124 ARTICLE XII Miscellaneous 12.01 Assignments and Participations ..................................... 125 12.02 Notices ............................................................ 127 12.03 No Waiver .......................................................... 129 12.04 Setoff ............................................................. 129 12.05 Survival ........................................................... 129 12.06 Expenses ........................................................... 130 12.07 Amendments ......................................................... 130 12.08 Counterparts ....................................................... 131 12.09 Waivers by Borrowers ............................................... 132 12.10 Termination ........................................................ 132 12.11 Governing Law ...................................................... 133 12.12 Representation and Warranty of the Lenders ......................... 134 12.13 Indemnification .................................................... 134 12.14 Agreement Controls ................................................. 135 12.15 Severability ....................................................... 135 iv REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT THIS REVOLVING CREDIT AND REIMBURSEMENT AGREEMENT, dated as of May 23, 1996 (the "Agreement"), is made by and among: TECH DATA CORPORATION, a corporation organized and existing under the laws of the State of Florida and having its principal place of business located in Clearwater, Florida ("TDC"); and TECH DATA FRANCE, S.N.C., a societe en nom collectif organized under the laws of France with a registered capital of FF 66,867,000, having its registered office at 26 Avenue Henri Barbusse, 93000 Bobigny, registered with the Registry of Commerce and of Companies of Bobigny under Number B 309 910 282 ("TD France" and, together with TDC and any other Subsidiary who shall become authorized to borrow under the Multicurrency Facilities in accordance with Section 2.16 hereof, the "Multicurrency Facilities Borrowers"); and TECH DATA CANADA INC., a corporation organized and existing under the laws of Ontario, Canada, and having its principal place of business 6895 Columbus Road, Mississauga, Ontario L5T 269 ("TD Canada" and, together with the Multicurrency Facilities Borrowers, the "Borrowers"); and NATIONSBANK, NATIONAL ASSOCIATION ("NATIONSBANK"), CIBC INC., BARNETT BANK OF PINELLAS COUNTY, NBD BANK, THE BANK OF NOVA SCOTIA, CREDIT LYONNAIS, ROYAL BANK OF CANADA, PNC BANK, KENTUCKY, INC., SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, FIRST UNION NATIONAL BANK OF FLORIDA and THE SAKURA BANK, LIMITED, the initial lenders under the Multicurrency Facilities, and each other lender which may hereafter execute and deliver an instrument of assignment with respect to the Multicurrency Facilities under this Agreement pursuant to Section 12.01 (hereinafter NationsBank and such other lenders may be referred to individually as a "Multicurrency Facilities Lender" or collectively as the "Multicurrency Facilities Lenders"); and CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC") and THE BANK OF NOVA SCOTIA, the initial lenders under the Canadian Facilities and each other lender which may hereafter execute and deliver an instrument of assignment with respect to the Canadian Facilities under this Agreement pursuant to Section 12.01 (hereafter CIBC and such other lenders may be referred to individually as a "Canadian Facilities Lender" or collectively as the "Canadian Facilities Lenders"; the Canadian Facilities Lenders and the Multicurrency Facilities Lenders are sometimes referred to collectively as the "Lenders" or individually as a "Lender"); NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America and having its principal place of business in 1 Tampa, Florida in its capacity as agent for the Lenders (in such capacity, the "Agent"); and CANADIAN IMPERIAL BANK OF COMMERCE in its capacity as agent for the Canadian Facilities Lenders (the "Canadian Agent" and together with the Agent, collectively the "Agents"). W I T N E S S E T H: WHEREAS, TDC, the Agent and certain lenders are parties to an Amended and Restated Revolving Credit and Reimbursement Agreement dated July 28, 1994, as amended, (the "Prior Domestic Facilities Agreement") pursuant to which such lenders have agreed to make loans to TDC and issue letters of credit and create acceptances for the benefit of TDC in an aggregate amount of up to $125,000,000 (the "Prior Domestic Facilities"); and WHEREAS, TD France, the Agent and certain lenders are parties to a Revolving Foreign Currency Agreement dated as of August 4, 1994, as amended (the "Prior TD France Facilities Agreement") pursuant to which such lenders have agreed to make available to TD France a revolving credit facility in the aggregate amount of up to $50,000,000 (the "Prior TD France Facility"); and WHEREAS, TD Canada and CIBC are parties to a letter agreement dated as of July 28, 1994 (the "Prior Canadian Facilities Agreement" and, together with Prior Domestic Facilities Agreement and the Prior TD France Facilities Agreement, the "Prior Credit Agreements") pursuant to which CIBC agreed to make available to TD Canada revolving credit and foreign currency facilities and to issue letters of credit and create acceptances for the benefit of TD Canada in an aggregate amount of up to Cdn $33,000,000 (the "Prior TD Canada Facilities" and, together with the Prior Domestic Facilities and the Prior TD France Facility, the "Prior Credit Facilities"); and WHEREAS, the Borrowers desire to replace the Prior Credit Facilities with the Credit Facilities herein provided, and the Agents and the Lenders are willing to make the Credit Facilities available to the Borrowers subject to the terms and conditions herein provided; NOW, THEREFORE, the Borrowers, the Lenders and the Agents hereby agree as follows: 2 ARTICLE I Definitions and Terms 1.01 For the purposes of this Agreement, in addition to the definitions set forth above, the following terms shall have the respective meanings set forth below: "Absolute Rate" shall have the meaning assigned to such term in Section 2.04(c)(ii)(C) hereof; "Absolute Rate Auction" means a solicitation of Competitive Bid Quotes setting forth Absolute Rates pursuant to Section 2.04 hereof; "Absolute Rate Loans" means the Competitive Bid Loans the interest rates on which are determined on the basis of Absolute Rates set at Absolute Rate Auctions; "Acceptance" means a Domestic Acceptance or a Canadian Acceptance, as the case may be; "Acceptance Addition" means that percent per annum set forth below which percent shall be the Acceptance Addition effective as to each Acceptance created next following the date of delivery of the certificate described in Section 8.01(a)(iii) or Section 8.01(b)(ii) (the "Compliance Date") demonstrating that as of the end of such period (i) either the ratio of Consolidated Funded Indebtedness to Consolidated Total Capital is less than or equal to or more than, as the case may be, or (ii) the ratio of Consolidated EBIT to Consolidated Interest Expense is greater than or equal to or less than, as the case may be, the applicable ratio set forth opposite such Acceptance Addition (provided that if such determination shall result in more than one Acceptance Addition, the lower Acceptance Addition shall apply): Ratios ------ EBIT to Interest Debt to Capital Acceptance Addition ---------------- --------------- ------------------- (a) Less than 3.0 to 1.00 Less than .60 to 1.00 but .55% equal to or greater than .55 to 1.00 (b) Greater than or equal Less than .55 to 1.00 but .45% to 3.0 to 1.00 but less equal to or greater than than 4.0 to 1.00 .50 to 1.00 (c) Greater than or equal Less than .50 to 1.00 but .40% to 4.0 to 1.00 but less equal to or greater than than 5.0 to 1.00 .45 to 1.00 3 (d) Greater than or equal Less than .45 to 1.00 .375% to 5.0 to 1.00 Notwithstanding the foregoing, if the Borrowers shall fail to deliver any such certificate within the applicable period set forth in Section 8.01(a) or (b), as the case may be, then the Acceptance Addition shall be .55% until the appropriate certificate is delivered. From the Closing Date to the first Compliance Date, the Acceptance Addition shall be .45%; "Acceptance Discount Proceeds" means: (i) in the case of a Canadian Acceptance accepted by a Canadian Facilities Lender that is a Schedule I Canadian chartered bank, the discount proceeds received by it upon its sale of such Canadian Acceptance to an arm's length purchaser; and (ii) in the case of a Canadian Acceptance accepted by a Canadian Facilities Lender that is not a Schedule I Canadian chartered bank, the lesser of (a) the discount proceeds received by such Canadian Facilities Lender upon its sale of such Canadian Acceptance to an arm's length purchaser at approximately 10:00 a.m. Toronto time on the drawdown day, or (b) the discount proceeds that would be received by such Canadian Facilities Lender had it sold such Canadian Acceptance based upon the average discount rate for bankers' acceptances appearing on the CDOR screen of Reuters at approximately 10:00 a.m. Toronto time on the drawdown day in Section 3.01, or if such rate is not quoted on the CDOR screen of Reuters at that time, the discount proceeds that would be received by it if it were to sell such Canadian Acceptance at a discount rate equal to the average discount rate expressed as a rate per annum applicable to Acceptances sold at that time by Canadian Facilities Lenders that are Schedule I Canadian chartered banks plus 0.07% per annum; "Advance" means a Canadian Advance or a Domestic Advance, as the case may be; "Advance Date Exchange Rate" means, (i) with respect to a specified Advance or Loan of an Alternative Currency, the Spot Rate of Exchange as of the date two Business Days preceding the date such Advance is originally made, provided that, if such Advance or Loan is continued for a subsequent Interest Period or converted pursuant to Section 2.09 the Advance Date Exchange Rate with respect to such Loan shall be the Spot Rate of Exchange two Business Days preceding the effective date of the latest continuation or conversion of such Advance or Loan; (ii) with respect to a specified Advance or Loan of an Alternative Currency to TD Canada, the Advance Date Exchange Rate shall be the Spot Rate of Exchange as 4 of the date of the Advance or Loan or as of the date of a continued Interest Period or conversion; and in either case the Dollar Value of such Advance or Loan shall be adjusted as set forth in Section 2.01(b) or Section 3.01(b), as applicable; provided, further, that in the case of a drawing under a Letter of Credit, the Spot Rate of Exchange shall be as of the date of such drawing; "Alternative Currency" means, (i) with respect to Loans under the Domestic Revolving Credit Facility, those currencies listed on Schedule 1.5 hereto and, with the prior written consent of all Multicurrency Facilities Lenders and the Agent, any other lawful currency other than Dollars which is freely transferable and convertible into Dollars in the United States currency market; provided, however, that an Alternative Currency shall only be available to the Multicurrency Facilities Borrowers if each Multicurrency Facilities Lender shall have access to such Alternative Currency on terms reasonably acceptable to such Multicurrency Facilities Lender and (ii) with respect to Loans under the Canadian Revolving Credit Facility, Canadian Dollars; "Alternative Currency Equivalent Amount" means, with respect to a specified Alternative Currency and a specified Dollar amount, the amount of such Alternative Currency into which such Dollar amount would be converted, based on the applicable Advance Date Exchange Rate; "Alternative Currency Loan" means a Loan made in an Alternative Currency; "Applicable Agent" means, with respect to all matters involving Article II of this Agreement the Agent, and with respect to all matters involving Article III of this Agreement, the Canadian Agent; "Applicable Commitment Percentage" means, (i) for each Multicurrency Facilities Lender, with respect to the Obligations hereunder arising in connection with the Domestic Revolving Credit Facilities (each a type of "credit exposure"), including its Participations and its obligations hereunder to NationsBank to acquire Participations, a fraction (expressed as a percentage), the numerator of which shall be the then amount of such Multicurrency Facilities Lender's Domestic Revolving Credit Commitment and the denominator of which shall be the Total Domestic Revolving Credit Commitment, which Applicable Commitment Percentage for each Multicurrency Facilities Lender as of the Closing Date is as set forth in Exhibit A attached hereto and incorporated herein by this reference; (ii) for each Canadian Facilities Lender, with respect to the Obligations hereunder arising in connection with the Canadian Revolving Credit Facilities (each a type of "credit exposure"), including its Participations and its 5 obligations hereunder to CIBC to acquire Participations, a fraction (expressed as a percentage), the numerator of which shall be the then amount of such Canadian Facilities Lender's Canadian Revolving Credit Commitment and the denominator of which shall be the Total Canadian Revolving Credit Commitment, which Applicable Commitment Percentage for each Canadian Facilities Lender as of the Closing Date is as set forth in Exhibit A attached hereto and incorporated herein by this reference; provided that the Applicable Commitment Percentage of each Lender shall be increased or decreased to reflect any assignments to or by such Lender effected in accordance with Section 12.01 hereof; "Applicable Interest Addition" means that percent per annum set forth below in the case of each of a Floating CD Loan, Fixed CD Loan or Eurodollar Rate Loan, which percent shall be the Applicable Interest Addition effective beginning on the first day next following the date of delivery of the certificate described in Section 8.01(a)(iii) or Section 8.01(b)(iii) (the "Compliance Date") demonstrating that as of the end of such period either (i) the ratio of Consolidated Funded Indebtedness to Consolidated Total Capital is less than or equal to or more than, as the case may be, or (ii) the ratio of Consolidated EBIT to Consolidated Interest Expense is greater than or equal to or less than, as the case may be, the applicable ratio set forth opposite such Applicable Interest Addition (provided that if such determination shall result in more than one Applicable Interest Addition, the lower Applicable Interest Addition shall apply):
Ratios Interest Addition ------ ----------------- EBIT to Interest Debt to Capital Floating Fixed Eurodollar CD Loan CD Loan Rate Loan ---------------- --------------- ------- ------- --------- (a) Less than 3.0 to 1.00 Less than .60 to 1.00 but .675% .675% .55% equal to or greater than (b) Greater than or equal Less than .55 to 1.00 but .575% .575% .45% to 3.0 to 1.00 but less than equal to or greater than 4.0 to 1.00 .50 to 1.00 (c) Greater than or equal Less than .50 to 1.00 but .525% .525% .40% to 4.0 to 1.00 but less than equal to or greater than 5.0 to 1.00 .45 to 1.00 (d) Greater than or equal Less than .45 to 1.00 .500% .500% .375% to 5.0 to 1.00
Notwithstanding the foregoing, if the Borrowers shall fail to deliver any such certificate within the applicable period set forth in Section 8.01(a) or (b), as the case may be, then the Applicable Interest Addition for any Loan shall be the highest 6 Applicable Interest Addition for such type of Loan set forth above until the appropriate certificate is so delivered. From the Closing Date to the first Compliance Date, the Applicable Margin shall be .575% for CD Loans and .45% for Eurodollar Rate Loans; "Applicable Rate" means the Eurodollar Rate applicable to any Alternative Currency; "Applicable Reference Rate" means: (i) for any Fixed CD Loan, in respect of the Interest Period specified by the Authorized Representative in the Borrowing Notice for such Fixed CD Loan, the per annum rate of interest (expressed as a percentage and rounded upwards if necessary to the nearest 1/100 of 1%) (which shall be the same for each day of such Interest Period) determined in good faith by the Agent in accordance with the usual procedures for its customers generally (which determination shall be conclusive absent manifest error) to be the average of the secondary market bid rates at approximately 10:00 A.M. Charlotte, North Carolina time on the first day of such Interest Period of at least two dealers of recognized standing in negotiable certificates of deposit for the purchase at face value of negotiable certificates of deposit of major money center banks for delivery on such day in an amount approximately equal to the principal amount of, and for a period comparable to the Interest Period for, such Fixed CD Loan and maturing at the end of such Interest Period, and (ii) for any Floating CD Loan the per annum rate of interest (expressed as a percentage and rounded upwards if necessary to the nearest 1/100 of 1%) determined in good faith by the Agent in accordance with the usual procedures for its customers generally to be the average of the secondary market bid rates at approximately 10:00 A.M. Charlotte, North Carolina time on each day of such Floating CD Loan of at least two dealers of recognized standing in negotiable certificates of deposit for the purchase at face value of negotiable certificates of deposit of major money center banks for delivery on such day in an amount approximately equal to the principal amount of such Floating CD Loan for a period of 90 days, and (iii) for any Eurodollar Rate Loan, in respect of the Interest Period specified by the Authorized Representative in the Borrowing Notice for such Eurodollar Rate Loan the average (rounded upward to the nearest one-sixteenth (1/16th) of one percent) per annum rate of interest determined by the office of the Applicable Agent (each such determination to be conclusive and binding) as of two Business Days prior to the first day of such Interest Period, as the 7 effective rate at which deposits in immediately available funds in Dollars or an Alternative Currency, as the case may be, are being, have been, or would be offered or quoted by the Applicable Agent to major banks in the applicable interbank market for Eurodollar deposits or deposits of such Alternative Currency, as the case may be, at any time during the Business Day which is the second Business Day immediately preceding the first day of such Interest Period, for a term comparable to such Interest Period and in the amount of the Fixed Rate Loan. If no such offers or quotes are generally available for such amount, the Applicable Agent shall be entitled to determine the Eurodollar Rate by estimating in its reasonable judgment the per annum rate (as described above) that would be applicable if such quote or offers were generally available; "Applicable Reserve Requirement" means, for any CD Loan or any Fixed Rate Loan (other than Competitive Bid Loans) with respect thereto, the maximum aggregate rate at which reserves (including, without limitation, any basic marginal, special, supplemental or emergency reserves) are required to be maintained with respect thereto under Regulation D of the Board or other applicable banking regulator by the member banks of the Federal Reserve System against (i) non-personal Dollar time deposits in an amount of $100,000 or more in the case of any CD Loan or (ii) with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of a Fixed Rate Loan is determined), whether or not the applicable Lender has any Eurocurrency liabilities subject to such reserve requirement at that time. A Fixed Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credit for proration, exceptions or offsets that may be available from time to time to the applicable Lender. The Fixed Rate shall be adjusted automatically on and as of the effective date of any change in the Applicable Reserve Requirement; "Applicable Unused Fee" means that percent per annum set forth below, which shall be the Applicable Unused Fee effective beginning on the day next following the date of delivery of the certificate described in Section 8.01(a)(iii) or Section 8.01(b)(iii) (the "Compliance Date"), demonstrating that as of the end of such period either (i) the ratio of Consolidated Funded Indebtedness to Consolidated Total Capital is less than or equal to or more than, as the case may be, or (ii) the ratio of Consolidated EBIT to Consolidated Interest Expense is greater than or equal to or less than, as the case may be, the applicable ratio set forth opposite such Applicable Unused Fee (provided that if such determination 8 shall result in more than one Applicable Unused Fee, the lower Applicable Unused Fee shall apply:
Ratios ------ EBIT to Interest Debt to Capital Applicable Unused Fee ---------------- -------------- --------------------- (a) Less than 3.0 to 1.00 Less than .60 to 1.00 but .175% equal to or greater than .55 to 1.00 (b) Greater than or equal Less than .55 to 1.00 but .15% to 3.0 to 1.00 but less than 4.0 equal to or greater than to 1.00 .50 to 1.00 (c) Greater than or equal Less than .50 to 1.00 but .1375% to 4.0 to 1.00 but less than 5.0 equal to or greater than to 1.00 .45 to 1.00 (d) Greater than or equal Less than .45 to 1.00 .1250% to 5.0 to 1.00
Notwithstanding the foregoing, if the Borrowers shall fail to deliver any such certificate within the applicable period set forth in Section 8.01(a) or (b), as the case may be, then the Applicable Unused Fee shall be .175% until the appropriate certificate is so delivered. From the Closing Date to the first Compliance Date, the Applicable Unused Fee shall be .15%; "Assessment Rate" means, for any day for any CD Loan, the rate per annum (rounded upward to the nearest 1/100 of 1%) determined in good faith by the Agent in accordance with its usual procedures for its customers generally (which determination shall be conclusive absent manifest error) to be the net annual assessment rate payable by the Agent on such day for insurance by the Federal Deposit Insurance Corporation (or any successor) on Dollar time deposits. The CD Rate shall be adjusted automatically as of the effective date of each change in the Assessment Rate; "Assignment and Acceptance" shall mean an Assignment and Acceptance in the form of Exhibit B (with blanks appropriately filled in) delivered to the Agent in connection with an assignment of a Lender's interest under this Agreement pursuant to Section 12.01; "Assumption and Consent Agreement" means each Assumption and Consent Agreement described in Section 2.16 hereof executed and delivered in connection with the creation of additional Multicurrency Facilities Borrowers; "Authorized Representative" means (i) in the case of TDC any of the Chairman, Vice Chairman, President, Senior Vice Presidents of 9 Finance and Chief Financial Officer or Treasurer of TDC or, with respect to financial matters, the Treasurer or Chief Financial Officer of TDC, (ii) in the case of TD France any of the managing directors represented by their senior executive officers (President, Senior Vice President or Chief Financial Officer), and (iii) with respect to TD Canada, all of the Authorized Representatives of TDC and the Vice President of Finance and Controller, or any other person expressly designated by the Board of Directors (or the appropriate committee thereof) of TDC as an Authorized Representative for purposes of this Agreement, as set forth from time to time in a certificate in the form attached hereto as Exhibit C; "BA Rate" means with respect to Domestic Acceptances, NationsBank, N.A. Funds Management Bankers Acceptance Funding Rate as established by the Agent from time to time for an Acceptance having an Interest Period and in an approximate amount equal to such Acceptance; "Board" means the Board of Governors of the Federal Reserve System (or any successor body); "Borrowing Notice" means the telephonic request of the Authorized Representative of a Borrower to (i) obtain an Advance or to elect a subsequent Interest Period for or convert a Loan or Loans of any type hereunder, as the obtaining of such Advance, such election or conversion of such Loan or Loans shall be otherwise permitted herein or (ii) create an Acceptance, as otherwise permitted hereunder. Any Borrowing Notice shall be binding on and irrevocable by the Borrower, and (a) in the case of a notice for the purposes set forth in (i) hereof, shall be confirmed in writing within three (3) Business Days by the Authorized Representative in the form attached hereto as Exhibit D-1 for Domestic Revolving Loans or Exhibit D-2 for Canadian Loans and (b) in the case of a notice for the purposes set forth in (ii) hereof, shall be confirmed in writing not less than two (2) Business Days prior to the creation of such Acceptance by an Authorized Representative in the form attached hereto as Exhibit D-3 for Domestic Acceptances or Exhibit D-4 for Canadian Acceptances; "Business Day" means (i) for all purposes other than as covered by clauses (ii) and (iii) below, any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the States of New York, North Carolina or Florida or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close, (ii) with respect to all notices, determinations, findings and payments in connection with Canadian Loans, Canadian Letters of Credit and the Canadian Acceptances, any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of Canada and the Province of Ontario, 10 Canada or is a day on which banking institutions located in such Province are authorized or required by law or other governmental action to close and (iii) (A) with respect to all notices, determinations, fundings and payments in connection with any Eurodollar Rate Loan, any day that is a Business Day described in clause (i) above and that is also a day for trading by and between banks in Dollar deposits in the applicable interbank Eurodollar market or in deposits in the applicable Alternative Currency in the United States interbank market, as applicable, and (B) with respect to all notices, determinations, findings and payments in connection with any Canadian Loans, any day that is a Business Day described in clause (ii) above and that is also a day for trading by and between banks in Canadian Dollar deposits in the applicable interbank Canadian Eurodollar market; "Canadian Acceptance" means a draft which constitutes a blank bill of exchange within the meaning of the Bills of Exchange Act (Canada) drawn by TD Canada on, and accepted by, a Canadian Facilities Lender and has a maturity 1, 2, 3 or 6 months after the date such Acceptances was created and does not extend beyond the Revolving Credit Termination Date, and shall include for purposes of computation of Canadian Acceptance Usage the Existing Canadian Acceptances; "Canadian Acceptance Lender" means a Lender that is a Canadian chartered bank; "Canadian Acceptance Usage" means, as at any date of determination, the aggregate face amount of all completed Canadian Acceptances which have been accepted and discounted and not been repaid by TD Canada whether or not due and whether or not held by CIBC; "Canadian Advance" means a borrowing under the Canadian Revol- ving Credit Facility consisting of the aggregate principal amount of a Domestic Base Rate Loan, Canadian Prime Rate Loan or a Fixed Rate Loan; "Canadian Dollars" or "Cdn $" means the lawful currency of Canada; "Canadian Facilities" means the revolving credit, letter of credit and acceptance facilities made available by the Lenders pursuant to Article III hereof; "Canadian Letter of Credit" means a Letter of Credit issued under the Canadian Letter of Credit Facility, and shall include for purposes of computation of Canadian Letter of Credit Outstandings, the Existing Canadian Letters of Credit and the related reimbursement obligations; 11 "Canadian Letter of Credit Commitment" means an amount not to exceed Cdn $25,000,000; "Canadian Letter of Credit Facility" means the facility described in Article III hereof providing for the issuance by CIBC for the account of TD Canada of Canadian Letters of Credit in an aggregate stated amount at any time outstanding not exceeding the Canadian Letter of Credit Commitment; "Canadian Letter of Credit Outstandings" means all undrawn amounts of Canadian Letters of Credit plus Reimbursement Obligations relating to Canadian Letters of Credit; "Canadian Loans" means loans made by the Canadian Facilities Lenders pursuant to Sections 3.01 hereof; "Canadian Prime Rate" means on any day and with respect to all Canadian Prime Rate Loans, the greater of: (i) the variable rate of interest expressed as a percentage per annum (calculated on the basis of a year of 365 days) which CIBC publishes as the reference rate of interest in order to determine interest rates it will charge on that day for demand loans in Canadian Dollars to its Canadian customers and which it refers to as its "prime lending rate" or "prime rate"; and (ii) the average yield to maturity expressed as a percentage per annum (calculated on the basis of a year of 365 days) quoted at 10:00 Toronto time on that day on the CDOR page of Reuters for 30 day bankers' acceptances issued by Canadian chartered banks, plus .50% per annum. The Canadian Prime Rate is not necessarily intended to be the lowest rate of interest determined by CIBC in connection with extensions of credit in Canadian Dollars. Changes in the rate of interest on that portion of any Loans maintained as Canadian Prime Rate Loans will take effect simultaneously with each change in the Canadian Prime Rate. The Canadian Agent shall give notice to the Borrower and each Canadian Facilities Lender of the Canadian Prime Rate from time to time quoted by CIBC and such notice shall be conclusive and binding for all purposes absent error; "Canadian Prime Rate Loan" or "Canadian Prime Loan" means a Loan for which the rate of interest is determined by reference to the Canadian Prime Rate; "Canadian Revolving Credit Commitment" means with respect to each Canadian Facilities Lender, the obligation of such Lender to make Loans to TD Canada up to an aggregate principal amount at any one time outstanding equal to the percentage set forth in Exhibit A as the same 12 may be increased or decreased from time to time pursuant to this Agreement; "Canadian Revolving Credit Facility" means the facility described in Article III hereof providing for Loans to TD Canada by the Canadian Facilities Lenders in the aggregate principal amount of Total Canadian Revolving Credit Commitment less the aggregate amount of Canadian Letter of Credit Outstandings and Canadian Acceptance Usage; "Capital Expenditures" means for any period the sum of (i) the gross amount of additions to property, plant and equipment of TDC and its Subsidiaries during such period plus (ii) with respect to any Capital Lease entered into by TDC or any Subsidiary during such period, the present value of the lease payments due under such Capital Lease over the term of such Capital Lease applying a discount rate equal to the interest rate provided in such lease or if no interest is provided, the interest rate used in the preparation of the financial statements referred to in Section 8.01(a) or (b) hereof; "Capital Leases" means all leases which have been or should be capitalized in accordance with Generally Accepted Accounting Principles as in effect from time to time including Statement No. 13 of the Financial Accounting Standards Board and any successor thereof; "Cash Equivalents" means (a) marketable obligations issued or unconditionally guaranteed by the United States government, in each case maturing within one year after the date of acquisition thereof; (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state maturing within 180 days after the date of acquisition thereof and, at the time of acquisition, having a rating of A-1 or P-1, or better, from Standard & Poor's division of McGraw-Hill, Inc. ("Standard & Poor's") or Moody's Investors Service, Inc., respectively; (c) commercial paper maturing no more than 270 days after the date of acquisition thereof, issued by a corporation organized under the laws of any state of the United States or of the District of Columbia and, at the time of acquisition, having a rating of A-1 or P-1, or better, from Standard & Poor's or Moody's Investors Service, Inc., respectively; 13 (d) time deposits, certificates of deposit or Eurodollar deposit maturing within 90 days after the date of acquisition thereof, issued by any commercial bank that is either (i) a member of the Federal Reserve System that has capital, surplus and undivided profits (as shown on its most recent statement of condition) aggregating not less than $400,000,000 and is rated A or better by Moody's Investors Service, Inc. or Standard & Poor's or (ii) a Lender; (e) repurchase agreements entered into with any Lender or any commercial bank of the nature referred to in clause (d), secured by a fully perfected Lien in any obligation of the type described in any of clauses (a) through (d), having a fair market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation thereunder of such Lender or other commercial bank; and (f)money market funds not less than 75% of whose investments are made up of securities described in clauses (a) through (e); "CD Loan" means a Loan for which the rate of interest is determined by reference to the CD Rate; "CD Rate" means, for any CD Loan, the rate of interest per annum determined pursuant to the following formula: Applicable Reference Rate ------------------------- Applicable CD Rate = 1 - Applicable + Assessment Rate + Interest Reserve Requirement Addition "Change of Control" means, at any time: (A) with respect to TDC: (i) any "person" or "group" (each as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) either (A) becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act ), directly or indirectly, of Voting Stock of TDC (or securities convertible into or exchangeable for such Voting Stock) representing 30% or more of the combined voting power of all Voting Stock of TDC (on a fully diluted basis) or (B) otherwise has the ability, directly or indirectly, to elect a majority of the board of directors of TDC; or (ii) during any period of up to 24 consecutive months, commencing on the Closing Date, individuals who at the beginning of such 24-month period were directors of TDC shall cease for any reason (other 14 than the death, disability or retirement) to constitute a majority of the board of directors of TDC; or (iii) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence on the management or policies of TDC; and (B)with respect to any Significant Subsidiary of TDC: (i) which is or becomes a wholly-owned Significant Subsidiary at or after the Closing Date, such Person ceases for any reason to be a wholly-owned Subsidiary of TDC (or with respect to TD Canada or TD France, ceases to be a significant subsidiary); or (ii) which is or becomes a Significant Subsidiary (other than a wholly-owned Significant Subsidiary) of TDC at or after the Closing Date, such Person ceases for any reason to be a Subsidiary of TDC; "Closing Date" means the date as of which this Agreement is executed by the Borrowers, the Lenders and the Agent and on which the conditions set forth in Section 5.01 hereof have been satisfied; "Commercial Letter of Credit" means a documentary letter of credit issued (i) in the case of Domestic Letters of Credit, by NationsBank for the account of the applicable Multicurrency Facilities Borrower or (ii) in the case of Canadian Letters of Credit, by CIBC for the account of TD Canada, to support the acquisition of Eligible Inventory (x) in the case of Domestic Letters of Credit, of Multicurrency Facilities Borrowers and (y) in the case of Canadian Letters of Credit, of TD Canada which letters of credit are secured by documents; provided that the expiry date of a Commercial Letter of Credit (i) shall not be later than six (6) months subsequent to the date of issuance thereof, (ii) shall not provide for payment subsequent to the thirtieth Business Day preceding the Revolving Credit Termination Date and (iii) shall not provide for time drafts; "Competitive Bid Borrowing" shall have the meaning assigned to such term in Section 2.04(b) hereof; 15 "Competitive Bid Loans" means the Loans provided for by Section 2.04 hereof; "Competitive Bid Notes" means the promissory notes of the Multicurrency Facilities Borrowers executed and delivered to the Multicurrency Facilities Lenders as provided in Section 2.05(c) and Section 2.16 substantially in the form of Exhibit E-1 which shall be delivered to evidence the Competitive Bid Loans; "Competitive Bid Quote" means an offer in accordance with Section 2.04(c) hereof by a Lender to make a Competitive Bid Loan with one single specified interest rate; "Competitive Bid Quote Request" shall have the meaning assigned to such term in Section 2.04(b) hereof; "Consistent Basis" in reference to the application of Generally Accepted Accounting Principles means the accounting principles observed in the period referred to are comparable in all material respects to those applied in the preparation of the audited financial statements of TDC referred to in Section 7.02(c)(i) hereof; "Consolidated Asset Coverage Ratio" means the ratio of (A) the sum of, without duplication, (i) unrestricted cash and Cash Equivalents located in each case within the United States, (ii) Remaining Accounts Receivable, (iii) Receivables of Subsidiaries, (iv) Inventory and (v) Prepaid Inventory to (B) the sum of, without duplication, (i) Total Domestic Utilization, (ii) Total Canadian Utilization, (iii) Indebtedness permitted under Section 9.06(v), and (iv) accounts payable of TDC and its Subsidiaries, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principals applied on a Consistent Basis; "Consolidated EBIT" means, with respect to TDC and its Subsidiaries for the Four-Quarter Period immediately preceding the date of computation thereof, the sum of, without duplication, (i) Consolidated Net Income, plus (ii) Consolidated Interest Expense during such period, (iii) plus taxes paid on income during such period, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; "Consolidated Funded Indebtedness" means Indebtedness for Money Borrowed of TDC and its Subsidiaries, all determined on a consolidated basis; "Consolidated Indebtedness" means all Indebtedness of TDC and its Subsidiaries, all determined on a consolidated basis; 16 "Consolidated Interest Expense" means, with respect to any period of computation thereof, the gross interest expense of TDC and its Subsidiaries, including without limitation (i) the amortization of debt discounts, (ii) the amortization of all reserves and fees (including without limitation, dealer and program fees payable under the Transfer and Administration Agreement and fees payable in respect of a Swap Agreement) payable in connection with the incurrence of Indebtedness to the extent included in interest expense and (iii) the portion of any liabilities incurred in connection with Capital Leases allocable to interest expense, all determined on a consolidated basis in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; "Consolidated Lease Expense" means with respect to TDC and its Subsidiaries for the Four Quarter Period immediately preceding the date of computation, the gross amount of all lease or rental expense, whether or not characterized as rent, excluding payments in respect of Capital Leases constituting Indebtedness, all determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; "Consolidated Net Income" means the gross revenues of TDC and its Subsidiaries less all operating and non-operating expenses of TDC and its Subsidiaries including taxes on income, all determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; but excluding as income: (i) gains on the sale, conversion or other disposition of capital assets, (ii) gains on the acquisition, retirement, sale or other disposition of capital stock and other securities of TDC or any Subsidiary, (iii) gains on the collection of proceeds of life insurance policies, (iv) any write-up of any asset, and (v) any other gain or credit of an extraordinary nature as determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; "Consolidated Shareholders' Equity" means at any time as of which the amount thereof is to be determined, the sum of the following in respect of TDC and its Subsidiaries (determined on a consolidated basis and excluding intercompany items among TDC and its Subsidiaries and any upward adjustment after the Closing Date due to revaluation of assets): (i) the amount of issued and outstanding share capital, plus (ii) the amount of additional paid-in capital and retained income (or, in the case of a deficit, minus the amount of such deficit), plus (iii) the amount of any foreign currency translation adjustment (if positive, or, if negative, minus the amount of such translation adjustment) minus (iv) the absolute value of any treasury stock and the absolute value of any stock subscription receivables, as determined in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis; 17 "Consolidated Tangible Net Worth" means at any time as of which the amount thereof is to be determined, Consolidated Shareholders' Equity minus the sum of the following (without duplication of deductions in respect of items already deducted in arriving at surplus and retained earnings): (a) the net book value of all assets which would be treated as intangible assets under Generally Accepted Accounting Principles, such as (without limitation) goodwill (whether representing the excess of cost over book value of assets acquired or otherwise), capitalized expenses (other than capitalized software expenses), unamortized debt discount and expense, consignment inventory (to the extent not included in Inventory of the Borrower and its Subsidiaries under Generally Accepted Accounting Principles), patents, trademarks, trade names, copyrights, franchises and licenses; and (b) all reserves (other than contingent reserves not allocated to any particular purpose), including without limitation reserves for depreciation, depletion, amortization, obsolescence, deferred income taxes, insurance and inventory valuation; "Consolidated Total Capital" means the sum of Consolidated Shareholders' Equity and Consolidated Funded Indebtedness; "Contingent Obligation" of any Person means all contingent liabilities required (or which, upon the creation or incurring thereof, would be required) to be included in the consolidated financial statements (including footnotes) of such Person in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis, including Statement No. 5 of the Financial Accounting Standards Board, and any obligation of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including obligations of such Person however incurred: (1) to purchase such Indebtedness or other obligation or any property or assets constituting security therefor; (2) to advance or supply funds in any manner (i) for the purchase or payment of such Indebtedness or other obligation, or (ii) to maintain a minimum working capital, net worth or other balance sheet condition or any income statement condition of the primary obligor; (3) to grant or convey any lien, security interest, pledge, charge or other encumbrance on any property or assets of such Person to secure payment of such Indebtedness or other obligation; 18 (4) to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner or holder of such Indebtedness or obligation of the ability of the primary obligor to make payment of such Indebtedness or other obligation; or (5)otherwise to assure the owner of the Indebtedness or such obligation of the primary obligor against loss in respect thereof; With respect to Contingent Obligations (such as litigation, guarantees and pension plan liabilities), such liabilities shall be computed at the amount which, in light of all the facts and circumstances existing at the time, represent the amount which can reasonably be expected to become an actual or matured liability; "Cost of Acquisition" means the sum of (i) the market value, as at the date of entering into any agreement to acquire any Person, of the assets and/or the capital stock or warrant or option to be transferred in connection therewith, (ii) any cash or face amount of any debt instrument given as consideration, and (iii) any Indebtedness or liabilities assumed (or taken subject to) by TDC or its Subsidiaries in connection with such acquisition; "Credit Margin" means, for any day, with respect to any Canadian Acceptance accepted under the Canadian Revolving Commitment the amount set out as the Applicable Interest Addition used for determining the Eurodollar Rate; "Default" means any event or condition which, with the giving or receipt of notice or lapse of time or both, would constitute an Event of Default hereunder; "Defaulted Receivable" means any Receivable which is at the time of transfer to Enterprise pursuant to the Transfer and Administration Agreement either (i) unpaid for 91 days or more from the original due date, (ii) as to which an event of bankruptcy has occurred with respect to the obligor thereunder, (iii) is deemed uncollectible by TDC, or (iv) consistent with TDC's credit and collection policy should be written off as uncollectible; "Dollar Equivalent Amount" means, with respect to a specified Alternative Currency amount, the amount of Dollars into which an Alternative Currency amount would be converted, based on the applicable Advance Date Exchange Rate; "Dollar Value" of an Advance or a Loan in an Alternative Currency means the Dollar Equivalent Amount of the principal amount of such Advance or Loan with respect to such Advance or Loan, as recorded 19 in the Agent's records pursuant to Section 2.01(b) and Section 3.01(b); "Dollars" and the symbol "$" means dollars constituting legal tender for the payment of public and private debts in the United States of America; "Domestic Acceptance" means a draft drawn by TDC on, and accepted by, a financial institution, which Acceptance is eligible for discount by Federal Reserve Banks pursuant to paragraph 7 of Section 13 of the Federal Reserve Act (12 U.S.C. ss.372), as amended from time to time and has a maturity date of 30, 60, 90 or 180 days after the date such Acceptance was created and does not extend beyond the Revolving Credit Termination Date, and shall include for purposes of computation of Domestic Acceptance Usage the Existing Domestic Acceptances; "Domestic Acceptance Date" means that date upon which NationsBank creates a Domestic Acceptance pursuant to Article II hereof; "Domestic Acceptance Usage" means, as at any date of determination, the aggregate face amount of all completed Domestic Acceptances which have not been repaid by the Multicurrency Facilities Borrowers whether or not due and whether or not held by NationsBank; "Domestic Advance" means a borrowing under (i) the Domestic Revolving Credit Facility consisting of the aggregate principal amount of a Domestic Base Rate Loan or Fixed Rate Loan, as the case may be and (ii) the Swing Line consisting of Floating CD Loans; "Domestic Base Rate" means on any day the per annum rate of interest equal to (A) for Loans in Article II hereof the greater of (i) the Domestic Prime Rate or (ii) the Federal Funds Effective Rate plus one-half of one percent (1/2%). Any change in the Domestic Base Rate resulting from a change in the Domestic Prime Rate or the Federal Funds Effective Rate shall become effective as of 12:01 A.M. of the Business Day on which each such change occurs. The Domestic Base Rate is a reference rate used by Agent in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit to any debtor and (B) for Canadian Loans in Article III hereof made by Canadian Facilities Lenders a fluctuating rate of interest per annum (expressed on the basis of a year of 365 days) equal to the higher of: (a) the rate of interest most recently established by CIBC as its base rate for Dollar loans made in Canada; and 20 (b) the Federal Funds Effective Rate in effect on each day as determined by the Agent plus 1/2 of 1%. The Domestic Base Rate is not necessarily intended to be the lowest rate of interest determined by CIBC in connection with extensions of credit in Dollars. Changes in the rate of interest on that portion of any Canadian Loans maintained as Domestic Base Rate Loans will take effect simultaneously with each change in the Domestic Base Rate. The Canadian Agent will give notice promptly to TD Canada and the Canadian Facilities Lenders of changes in the Domestic Base Rate; "Domestic Base Rate Loan" means a Loan for which the rate of interest is determined by reference to the Domestic Base Rate; "Domestic Borrowers' Account" means a demand deposit account with the Agent, which may be maintained at one or more offices of the Agent, or an agent for the Agent; "Domestic Letter of Credit" means a Letter of Credit issued under the Domestic Letter of Credit Facility, and shall include for purposes of computation of Domestic Letter of Credit Outstandings, the Existing Domestic Letters of Credit and the related reimbursement obligations; "Domestic Letter of Credit Commitment" means an amount not to exceed $75,000,000; "Domestic Letter of Credit Facility" means the facility described in Article II hereof providing for the issuance by NationsBank for the account of the Multicurrency Facilities Borrowers of Letters of Credit in an aggregate stated amount at any time outstanding not exceeding the Domestic Letter of Credit Commitment; "Domestic Letter of Credit Outstandings" means all undrawn amounts of Domestic Letters of Credit plus Reimbursement Obligations relating to Domestic Letters of Credit; "Domestic Loans" means Loans made by the Multicurrency Facilities Lenders pursuant to Sections 2.01, 2.04 and 2.15 hereof; "Domestic Prime Rate" means the per annum rate of interest announced publicly by the Agent as its prime rate from time to time. The Domestic Prime Rate is not necessarily the best or the lowest rate of interest offered by the Agent; "Domestic Revolving Credit Commitment" means with respect to each Domestic Lender, the obligation of such Lender to make Loans to the Domestic Facility Borrowers up to an aggregate principal amount at 21 any one time outstanding equal to the percentage set forth in Exhibit A as the same may be increased or decreased from time to time pursuant to this Agreement; "Domestic Revolving Credit Facility" means the facility described in Article II hereof providing for Loans to the Domestic Borrowers by the Domestic Lenders in the aggregate principal amount of the Total Domestic Revolving Credit Commitment less the aggregate amount of outstanding Swing Line Loans, Domestic Letters of Credit Outstandings and Domestic Acceptances Usage; "Domestic Revolving Credit Notes" means the promissory notes of the Multicurrency Facilities Borrowers executed and delivered to the Multicurrency Facilities Lenders as provided in Section 2.05(a) and Section 2.16 hereof in substantially the form attached as Exhibit E-2, with appropriate insertions as to amounts, dates and names of Multicurrency Facilities Lenders, which Domestic Revolving Credit Notes shall be delivered to evidence the Domestic Revolving Loans provided for herein; "Domestic Revolving Loan" means Loans made by the Multicurr- ency Facilities Lenders to the Multicurrency Facilities Borrowers pursuant to Section 2.01 hereof; "Domestic Subsidiary" means a Subsidiary of TDC which is organized under the laws of the United States, Federal or state, or any territory or instrumentality thereof; "Eligible Receivables" means, at any time, any Receivable: (i) which has been sold by TDC to TDF pursuant to a purchase agreement and to which TDF has good title thereto, free and clear of all Liens, other than a Lien in favor of Enterprise; (ii) the obligor of which is a United States resident, is not a Person affiliated with Borrower or TDF, has not been excluded as an obligor by Enterprise and is not a government or a governmental subdivision or agency; (iii) which is not a Defaulted Receivable; (iv) which has not remained unpaid for more than 60 days from the original due date; (v) which, according to the contract, purchase order or other agreement giving rise thereto is required to be paid in full within 60 days of the original billing date thereof; 22 (vi) which is an "eligible asset" as defined in Rule 3a-7 under the Investment Company Act of 1940, as amended; (vii) a purchase of which with the proceeds of commercial paper would constitute a "current transaction" within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended; (viii) which is an "account" within the meaning of Article 9 of the Uniform Commercial Code of all applicable jurisdictions; (ix) which is denominated and payable only in United States dollars in the United States; (x) which arises under a contract, purchase order or other agreement that together with the Receivable related thereto, is in full force and effect and constitutes the legal, valid and binding obligation of the related obligor enforceable against such obligor in accordance with its terms and, to the best knowledge of TDC or TDF is not subject to any offset, counterclaim or other defense at such time; (xi) which, together with the contract, purchase order or other agreement related thereto, does not contravene in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no part of the contract, purchase order or other agreement related thereto is in violation of any such law, rule or regulation in any material respect; (xii) which (A) satisfies in all material respects all applicable requirements of the applicable credit and collection policy of TDC and (B) is assignable; (xiii) which was generated in the ordinary course of TDC's business; and (xiv) the obligor of which has been directed to make all payments to a specified account of TDF; "Enterprise" means Enterprise Funding Corporation, a Delaware corporation; "Environmental Laws" means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization Act of 1986, the 23 Resource Conservation and Recovery Act, the Toxic Substances Control Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, any other "Superfund" or "Superlien" law or any other federal, or applicable state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect; "ERISA" means, at any date, the Employee Retirement Income Security Act of 1974 and the regulations thereunder, all as the same shall be in effect at such date; "Eurodollar Rate" means, for the Interest Period for any Eurodollar Rate Loan, the rate of interest per annum determined pursuant to the following formula: Eurodollar Applicable Reference Rate Applicable Interest = --------------------------------- + Addition Rate 1 - Applicable Reserve Requirement "Eurodollar Rate Loan" means a Loan (including a Loan in an Alternative Currency) for which the rate of interest is determined by reference to the Eurodollar Rate; "Event of Default" means any of the occurrences set forth as such in Section 10.01 hereof and the expiration of any applicable notice or cure period; "Existing Canadian Acceptances" means acceptances outstanding under the Prior TD Canada Facilities as of the Closing Date, more particularly described on Schedule 1-1 hereto; "Existing Canadian Letters of Credit" means standby and commercial letters of credit outstanding under the Prior TD Canada Facilities as of the Closing Date, more particularly described on Schedule 1-2; "Existing Domestic Acceptances" means acceptances outstanding under either the Prior Domestic Facilities or the Prior TD France Facility as of the Closing Date, more particularly described on Schedule 1-3 hereto; "Existing Domestic Letters of Credit" means standby and commercial letters of credit outstanding under either the Prior Domestic Facilities or the Prior TD France Facility as of the Closing Date, more particularly described on Schedule 1-4; "Existing TD France Subsidiaries" means the Subsidiaries of TD France listed on Schedule 7.02(a); 24 "Federal Funds Effective Rate" for any day, as used herein, means the rate per annum (rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced; "Fiscal Year" means the 12 month period of TDC ending on January 31 of each calendar year and commencing on February 1 of each calendar year; "Fixed CD Loan" means a CD Loan for which a Multicurrency Facilities Borrower elects an Interest Period of 30, 60, 90 or 180 days pursuant to Section 2.01(b)(iii) hereof; "Fixed Rate Loan" means a Loan which is either a Fixed CD Loan , a Eurodollar Rate Loan or a Competitive Bid Loan; "Floating CD Loan" means a CD Loan other than a Fixed CD Loan; "Floating Rate Loan" means a Loan in Dollars which is a Domestic Base Rate Loan or a Floating CD Loan; "Foreign Benefit Law" means any applicable statute, law, ordinance, code, rule, regulation, order or decree of any foreign nation or any province, state, territory, protectorate or other political subdivision thereof regulating, relating to, or imposing liability or standards of conduct concerning any pension, retirement, healthcare, death, disability or other employee benefit plan; "Four-Quarter Period" means a period of four full consecutive fiscal quarters of TDC and its Subsidiaries, taken together as one accounting period; "Funding Bank" means any banking institution approved by the Agent located within a country which country's currency constitutes an Alternative Currency and, with respect to Canadian Dollars to be made available to TD Canada under the Canadian Revolving Credit Facility, the Canadian Agent; 25 "General Acceptance Agreement" means the General Acceptance Agreements in the form attached hereto and marked as Exhibit F; "Generally Accepted Accounting Principles" means those principles of accounting set forth in pronouncements of the Financial Accounting Standards Board, the American Institute of Certified Public Accountants or which have other substantial authoritative support and are applicable in the circumstances as of the date of a report, as such principles are from time to time supplemented and amended; "Guaranty" means, collectively or individually, as the context may require, (i) the unconditional Guaranty and Suretyship Agreement in favor of the Multicurrency Facilities Lenders in the form attached hereto as Exhibit G-1 delivered to the Agent in accordance with Article V hereof or pursuant to Section 8.20 hereof pursuant to which the Significant Subsidiaries other than TD France guarantee the payment and performance of all obligations to the Multicurrency Facilities Lenders as more specifically set forth in such Guaranty, and (ii) the unconditional Guaranty and Suretyship Agreement in favor of the Canadian Facilities Lenders in the form attached hereto as Exhibit G-2 delivered to the Agent in accordance with Article V hereof pursuant to which TDC and its Significant Subsidiaries (other than TD Canada) guarantees the payment and performance of all obligations to the Canadian Facilities Lenders as more specifically set forth in such Guaranty; "Hazardous Material" means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling, storage, disposal, treatment or emission of which is subject to any Environmental Law in effect on any date; "Indebtedness" means with respect to any Person, all Indebtedness for Money Borrowed, all indebtedness of such Person for the acquisition of property, other than purchases of products and merchandise in the ordinary course of business so long as payment therefor is due within one year, indebtedness secured by any Lien on the property of such Person whether or not such indebtedness is assumed, all liability of such Person by way of endorsements (other than for collection or deposit in the ordinary course of business); all Contingent Obligations; all Capital Leases and other items which in accordance with Generally Accepted Accounting Principles are classified as liabilities on a balance sheet; provided that in no event shall the term Indebtedness include the TDC TROL, capital stock, surplus and retained earnings, minority interest in the common stock of Subsidiaries, lease obligations (other than pursuant to Capital Leases), reserves for deferred income taxes and investment credits, 26 other deferred credits and reserves, and deferred compensation obligations; "Indebtedness for Money Borrowed" means, for any Person, (i) all indebtedness, obligations and liabilities of such Person for money borrowed which are evidenced by bonds, debentures, notes or other similar instruments, (ii) the purchase price of Eligible Receivables sold pursuant to the Trade Receivables Purchase Facility and (iii) all Capital Leases which have been capitalized in accordance with Generally Accepted Accounting Principles; provided, however, the term "Indebtedness for Money Borrowed" shall specifically exclude payroll indebtedness and trade indebtedness incurred in the ordinary course of business (including trade indebtedness through financial intermediaries) provided such trade indebtedness has a maturity of less than one year; "Interest Period" for each Fixed Rate Loan or Acceptance means a period commencing on the date such Fixed Rate Loan is made or converted or such Acceptance is created and each subsequent period commencing on the last day of the immediately preceding Interest Period for such Fixed Rate Loan or Acceptance, as the case may be, and ending, at the Borrower's option, (A) for any Fixed CD Loan or Acceptance, on the date 30, 60, 90 or 180 days thereafter as notified to the Applicable Agent by the Authorized Representative of such Borrower two (2) Business Days prior to the beginning of such Interest Period and (B) for any Eurodollar Rate Loan, on the date one, two, three or six months thereafter as notified to the Agent by the Authorized Representative of such Borrower three (3) Business Days prior to the beginning of such Interest Period in the case of a Eurodollar Rate Loan and five (5) Business Days prior to the beginning of such Interest Period in the case of a Loan in an Alternative Currency other than Canadian Dollars or French Francs; provided, that, (i) if the Authorized Representative fails to notify the Applicable Agent of the length of an Interest Period for any Fixed CD Loan two (2) Business Days or for any Eurodollar Rate Loan three (3) or five (5) (as the case may be) Business Days, as the case may be, prior to the first day of such Interest Period, the Loan for which such Interest Period was to be determined shall be deemed to be a Floating Rate Loan as of the first day thereof; (ii) if an Interest Period for a Fixed Rate Loan or Acceptance would end on a day which is not a Business Day, such Interest Period shall be extended to the next Business Day (unless in the case of any Eurodollar Rate Loan, such extension would cause the applicable Interest Period to end in the succeeding calendar month, in which case such Interest Period shall end on the next preceding Business Day); 27 (iii) excluding Interest Periods for Acceptances, there shall not be more than (x) twelve (12) Interest Periods in effect on any day in respect of Domestic Loans and (y) four (4) Interest Periods in effect on any day in respect of Canadian Loans; (iv) Interest Periods shall be of such duration as to permit the Borrowers to make the reductions or repayments required by this Agreement; (v) there shall not be in effect at any one time more than an aggregate of four (4) Canadian Acceptances with different maturity dates; (vi) the first Interest Period for a Eurodollar Rate Loan shall commence on the day such Canadian Loan is advanced by the Canadian Facilities Lenders and each subsequent Interest Period relative thereto shall commence forthwith upon the expiry of the immediately preceding Interest Period relative thereto; and (vii) if any Interest Period is extended or shortened by the application of clause (vi) above, the following Interest Period shall (without prejudice to the application of clause (vi) above) end on the day on which it would have ended if the immediately preceding Interest Period had not been so extended or shortened. "Inventory" means and includes any and all goods, merchandise and other personal property, including, without limitation, goods in transit, wheresoever located and whether now owned or hereafter acquired by TDC and its Subsidiaries which is or may at any time be held for sale or lease, furnished under any contract of service or held as raw materials, work-in-process, or supplies or materials used or consumed in TDC's or its Subsidiaries' businesses; "LC/Acceptance Account Agreement" means the LC/Acceptance Account Agreement dated as of May 23, 1996 among the Borrowers and the Agent, as amended or modified from time to time; "Lending Office" means, as to each Lender, the Lending Office of such Lender designated on the signature pages hereof or in an Assignment and Acceptance or such other office of such Lender (or of an affiliate of such Lender) as such Lender may from time to time specify to the Authorized Representative and the Agent, in the case of Multicurrency Facilities Lenders, or the Canadian Agent, in the case of Canadian Facilities Lenders, as the office by which its Loans are to be made and maintained; "Letter of Credit" or "Letters of Credit" means a Commercial Letter(s) of Credit or Standby Letter(s) of Credit issued by 28 NationsBank (in the case of Domestic Letters of Credit) and CIBC (in the case of Canadian Letters of Credit), as described in Articles II and III hereof; "Letter of Credit Applications" means, collectively, the applications and agreements from the applicable Borrower to NationsBank (in respect of Domestic Letters of Credit) or CIBC (in respect of Canadian Letters of Credit) executed and delivered from time to time to support the issuance of Letters of Credit; "Lien" means any interest in property securing any obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute or contract, and including but not limited to the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. For the purposes of this Agreement, TDC and its Subsidiaries shall be deemed to be the owners of any property which it or they have acquired or hold subject to a conditional sale agreement, financing lease, or other arrangement pursuant to which title to the property has been retained by or vested in some other Person for security purposes; "Loan" or "Loans" means any of the Fixed Rate Loans, Floating Rate Loans or Canadian Prime Loans, as the context may require, made pursuant to Articles II and III hereof; "Loan Documents" means this Agreement, the Notes, the Guaranties, the LC/Acceptance Account Agreement, the Assumption and Consent Agreements, the Letter of Credit Applications, the General Acceptance Agreement for Acceptances, drafts and all other instruments and documents heretofore or hereafter executed or delivered to and in favor of any Lenders or the Agents in connection with the Loans, the Letters of Credit or the Acceptances made, issued or created under this Agreement as the same may be amended, modified or supplemented from time to time; "Multicurrency Facilities" means the revolving credit, competitive bid, swing line, letter of credit and acceptance facilities made available by the Lenders pursuant to Article II hereof; "Multicurrency Facilities Notes" means, collectively, the Domestic Revolving Credit Notes, the Competitive Bid Notes and the Swing Line Note; "Multi-employer Plan" means an employee pension benefit plan covered by Title IV of ERISA and in respect of which TDC or any Subsidiary is an "employer" as described in Section 4001(b) of ERISA, 29 which is also a multi-employer plan as defined in Section 4001(a)(3) of ERISA; "Net Receivables Balance" means the Eligible Receivables less all those Eligible Receivables excluded pursuant to the Transfer and Administration Agreement due to concentration; "Non-Acceptance Lender" means a Lender that is not a Canadian chartered bank; "Notes" means, collectively, the Multicurrency Facilities Notes and the Obligations herein to the Canadian Facilities Lenders as recorded on the records of the Canadian Agent; "Obligations" means the obligations, liabilities and Indebtedness of TDC and its Subsidiaries with respect to (i) the principal and interest on the Loans as evidenced by the Notes and on the records of the Canadian Agent as to the Obligations herein to the Canadian Facilities Lenders, (ii) the Reimbursement Obligations, (iii) all liabilities of TDC to any Lender which arise under a Swap Agreement, and (iv) the payment and performance of all other obligations, liabilities and Indebtedness of TDC and its Subsidiaries to the Lenders, the Canadian Agent or the Agent, under this Agreement, under any one or more of the other Loan Documents or with respect to the Loans; "Participation" means, with respect to any Multicurrency Facilities Lender (other than NationsBank) or any Canadian Facilities Lender (other than CIBC), as the case may be, the extension of credit represented by the participation of such Lender hereunder in the liability of (i) in the case of Multicurrency Facilities Lenders, NationsBank in respect of each Swing Line Loan made, Domestic Letter of Credit or Domestic Acceptance issued by NationsBank in accordance with the terms hereof and (ii) in the case of Canadian Facilities Lenders, CIBC in respect of each Canadian Letter of Credit or Canadian Acceptance issued by CIBC in accordance with the terms hereof; "Percentage Factor" means that fluctuating percentage of ownership interest in Eligible Receivables which are transferred to Enterprise under the Transfer and Administration Agreement; "Permitted Acquisition" means the acquisition by TDC or a Subsidiary of a controlling equity interest in or all or substantially all of the assets of any Person, which satisfies each of the following: (i) such Person is in the same or similar line or lines of business as that engaged in by TDC and its Subsidiaries; and (ii) no Default or Event of Default occurs or is created or results from such transaction; 30 "Person" means an individual, limited liability companies, partnership, corporation, trust, unincorporated organization, association, joint venture or a government or agency or political subdivision thereof; "Prepaid Inventory" means and includes any and all goods, merchandise and other personal property of TDC and its Subsidiaries for which payment has been made in full and which would otherwise be Inventory but for the reason that such property is not in the possession of TDC or its Subsidiaries; "Principal Office" means the principal office of the Agent at Independence Center, 15th Floor, Charlotte, North Carolina 28255, Attention: Agency Services, or such other office and address as the Agent may from time to time designate; "Rate Hedging Obligations" means any and all obligations of TDC and its Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, exchange rates or forward rates applicable to such party's assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts, warrants and those commonly known as interest rate "swap" agreements; and (b) any and all cancellations, buybacks, reversals, terminations or assignments of any of the foregoing; "Receivables" mean the short term trade receivables of TDC and its Subsidiaries generated from the sale of merchandise or services of TDC or its Subsidiaries; "Regulation D" means Regulation D of the Board as the same may be amended or supplemented from time to time; "Regulatory Change" means any change effective after the Closing Date in United States federal or state laws or regulations (including Regulation D and capital adequacy regulations), Canadian federal or provincial laws or regulations, or other foreign laws or regulations or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks, which includes any of the Lenders, under any United States federal or state, Canadian federal or provincial, or other foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or 31 administration thereof or compliance by any Lender with any request or directive regarding capital adequacy, including with respect to "highly leveraged transactions," whether or not having the force of law, whether or not failure to comply therewith would be unlawful and whether or not published or proposed prior to the date hereof; "Reimbursement Obligation" shall mean at any time, the obligation of any Borrower with respect to any Letter of Credit or Acceptance to reimburse NationsBank or CIBC, as the case may be, and the Lenders to the extent of their respective Participations (including by the receipt by NationsBank or CIBC of proceeds of Loans pursuant to Articles II or III) for amounts theretofore paid by NationsBank or CIBC pursuant to a drawing under a Letter of Credit or payment of an Acceptance; "Remaining Accounts Receivable" means the product of (i) Net Receivables Balance multiplied by (ii) a fraction equal to one (1) minus the Percentage Factor; "Required Lenders" means, as of any date, Lenders on such date having Credit Exposures (as defined below) aggregating at least 51% of the aggregate Credit Exposures of all the Lenders on such date, without distinction or reference as between Canadian Facilities and Multicurrency Facilities. For purposes of the preceding sentence, the amount of the "Credit Exposure" of each Lender shall be equal to the aggregate principal amount of the Loans owing to such Lender plus the sum of the aggregate unutilized amounts of such Lender's Domestic Revolving Credit Commitment and Canadian Revolving Credit Commitment plus the amount of such Lender's Applicable Commitment Percentage of the aggregate undrawn face amount of the outstanding Letters of Credit and unpaid face amount of Acceptances and of the Reimbursement Obligations; provided that, if any Lender shall have failed to pay to NationsBank or CIBC, as applicable, its Applicable Commitment Percentage of any Swing Line Loan, drawing under any Letter of Credit or payment of an Acceptance resulting in an outstanding Reimbursement Obligation, such Lender's Credit Exposure attributable to (i) Swing Line Loans, Domestic Letters of Credit, Domestic Acceptances, Reimbursement Obligations relating to Domestic Letters of Credit and the Domestic Letter of Credit Commitment shall be deemed to be held by NationsBank for purposes of this definition, and (ii) Canadian Letters of Credit, Canadian Acceptances, Reimbursement Obligations relating to Canadian Letters of Credit and the Canadian Letter of Credit Commitment shall be deemed to be held by CIBC for purposes of this definition; "Revolving Credit Termination Date" means (i) May 31, 1999 or (ii) such earlier date of termination of Lenders' obligations pursuant to Section 10.01 upon the occurrence of an Event of Default, or (iii) 32 such date as the Borrowers may voluntarily permanently terminate the Multicurrency Facilities and the Canadian Facilities by payment in full of all Obligations (including the discharge of all Obligations of NationsBank, CIBC and the other Lenders with respect to Letters of Credit, Acceptances and Participations) or (iv) such later date as the Borrowers, the Agent, the Canadian Agent and the Lenders shall agree in writing pursuant to Section 2.14 hereof with respect to Multicurrency Facilities or Section 3.12 with respect to Canadian Facilities; "Significant Subsidiary" means any Subsidiary which has either (i) total assets of more than $500,000 or (ii) total revenues of more than $500,000 during any Four-Quarter Period; provided, however, in no event shall the sum of total revenues or total assets of Subsidiaries not constituting Significant Subsidiaries exceed in either case $2,000,000; "Single Employer Plan" means any employee pension benefit plan covered by Title IV of ERISA and in respect of which TDC or any Subsidiary is an "employer" as described in Section 4001(b) of ERISA, which is not a Multi-employer Plan; "Solvent" means, when used with respect to any Person, that at the time of determination: (i) the fair value of its assets (both at fair valuation and at present fair saleable value on an orderly basis) is in excess of the total amount of its liabilities, including, without limitation, Contingent Obligations; and (ii) it is then able and expects to be able to pay its debts as they mature; and (iii) it has capital sufficient to carry on its business as conducted and as proposed to be conducted; "Spot Rate of Exchange" means, (i) in determining the Dollar Equivalent Amount of a specified Alternative Currency amount as of any date, the spot exchange rate determined by the Agent in accordance with its usual procedures for the purchase by the Agent of Dollars with such Alternative Currency at approximately 10:00 A.M., Charlotte, North Carolina time on the Business Day that is two (2) Business Days prior to such date, (ii) in determining the Alternative Currency Equivalent Amount of a specified Dollar amount on any date, the spot exchange rate determined by the Agent in accordance with its usual procedures for the purchase by the Agent of such Alternative Currency with Dollars at approximately 10:00 A.M., Charlotte, North Carolina time on the Business Day that is two (2) Business Days prior to such date and (iii) for all Loans under the Total Canadian Revolving Credit Commitment in 33 determining the Alternative Currency Equivalent amount of a specified Dollar amount or the Dollar amount when converting from Canadian Dollars, the amount in Dollars or Canadian Dollars, as the case may be, after giving effect to a conversion of a specified amount in Dollars to an Alternative Currency or of Alternative Currency to Dollars, as the case may be, at the rate of exchange quoted as the Bank of Canada noon spot rate on such date;00 "Standby Letter of Credit" means a letter of credit issued (i) in the case of Domestic Letters of Credit, by NationsBank for the account of the applicable Multicurrency Facilities Borrower and (ii) in the case of Canadian Letters of Credit, by CIBC for the account of TD Canada, in favor of a Person advancing credit or securing an obligation on behalf of the applicable Borrower; provided that the expiry date of a Standby Letter of Credit shall not be later than the thirtieth Business Day preceding the Revolving Credit Termination Date; "Subsidiary" means any corporation in which more than 50% of its outstanding voting stock is owned directly or indirectly by TDC and/or by one or more of TDC's Subsidiaries; "Swap Agreement" means one or more agreements with respect to Indebtedness evidenced by the Notes between one or more Borrowers and one or more Lenders, on terms mutually acceptable to Borrower and such Lender or Lenders, which agreements create Rate Hedging Obligations; "Swing Line" means the revolving line of credit established by NationsBank in favor of TDC pursuant to Section 2.15; "Swing Line Loans" means Loans made by NationsBank to TDC pursuant to Section 2.15; "Swing Line Note" means the promissory note of TDC executed and delivered to NationsBank as provided in Section 2.05(b) substantially in the form attached as Exhibit E-3, which shall be delivered to evidence the Swing Line Outstandings; "Swing Line Outstandings" means, as of any date of determination, the aggregate principal Indebtedness of TDC on all Swing Line Loans then outstanding; "Syndicated Loans" shall mean the Domestic Revolving Loans that are not Competitive Bid Loans or Swing Line Loans; "TDC TROL" means the Tax Retention Operating Lease dated April 26, 1996 between TDC and First Security Bank of Utah in its capacity as 34 owner trustee of the TD 1996 Real Estate Trust; "TDF" means Tech Data Finance, Inc., a California corporation, and a wholly-owned Subsidiary of the Borrower; "Total Canadian Revolving Credit Commitment" means an amount equal to US $40,000,000, as reduced or increased from time to time in accordance with Section 3.07; "Total Canadian Utilization" means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Canadian Loans plus (ii) the Canadian Acceptance Usage plus (iii) the Canadian Letter of Credit Outstandings, in each case at the Dollar Value or Dollar Equivalent Amount, as the case may be; "Total Domestic Revolving Credit Commitment" means an amount equal to $250,000,000, as reduced or increased from time to time in accordance with Section 2.08; "Total Domestic Utilization" means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Domestic Loans, plus (ii) the Domestic Acceptance Usage, plus (iii) the Domestic Letter of Credit Outstandings, in each case at the Dollar Value or Dollar Equivalent Amount, as the case may be; "Trade Receivable Purchase Facility" means the facility created for the benefit of TDF and TDC pursuant to the Transfer and Administration Agreement; "Transfer and Administration Agreement" means the Transfer and Administration Agreement dated as of December 22, 1993 among TDC, TDF and Enterprise, as amended, modified or supplemented from time to time, providing for the purchase of Receivables of TDF by Enterprise. 1.02 Rules of Interpretation. (a) All accounting terms not specifically defined herein shall have the meanings assigned to such terms and shall be interpreted in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis. (b) Each term defined in Article 1 or 9 of the Florida Uniform Commercial Code shall have the meaning given therein unless otherwise defined herein, except to the extent that the Uniform Commercial Code of another jurisdiction is controlling, in which case such terms shall have the meaning given in the Uniform Commercial Code of the applicable jurisdiction. (c) The headings, subheadings and table of contents used herein or in any other Loan Document are solely for convenience of reference and shall not constitute a part of any such document or 35 affect the meaning, construction or effect of any provision thereof. (d) Except as otherwise expressly provided, references herein to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and schedules are references to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and schedules in or to this Agreement. (e) All definitions set forth herein or in any other Loan Document shall apply to the singular as well as the plural form of such defined term, and all references to the masculine gender shall include reference to the feminine or neuter gender, and vice versa, as the context may require. (f) When used herein or in any other Loan Document, words such as "hereunder", "hereto", "hereof" and "herein" and other words of like import shall, unless the context clearly indicates to the contrary, refer to the whole of the applicable document and not to any particular article, section, subsection, paragraph or clause thereof. (g) References to "including" means including without limiting the generality of any description preceding such term, and for purposes hereof the rule of ejusdem generis shall not be applicable to limit a general statement, followed by or referable to an enumeration of specific matters, to matters similar to those specifically mentioned. (h) Each of the parties to the Loan Documents and their counsel have reviewed and revised, or requested (or had the opportunity to request) revisions to, the Loan Documents, and any rule of construction that ambiguities are to be resolved against the drafting party shall be inapplicable in the construing and interpretation of the Loan Documents and all exhibits, schedules and appendices thereto. (i) Any reference to an officer of any Borrower or any other Person by reference to the title of such officer shall be deemed to refer to each other officer of such person, however titled, exercising the same or substantially similar functions. (j) All references to any agreement or document as amended, modified or supplemented, or words of similar effect, shall mean such document or agreement, as the case may be, as amended, modified or supplemented from time to time only as and to the extent permitted therein and in the Loan Documents. 36 ARTICLE II The Multicurrency Facilities 2.01 Revolving Credit Facility (a) Commitment. Subject to the terms and conditions of this Agreement, each Multicurrency Facilities Lender severally agrees to make Domestic Advances in Dollars or an Alternative Currency (as specified in the respective Borrowing Notice) to the Multicurrency Facilities Borrower requesting such Advance, as the case may be, as specified in the Borrowing Notice, from time to time from the Closing Date until the Revolving Credit Termination Date, on a pro rata basis as to the total borrowing requested by such Multicurrency Facilities Borrower on any day determined by its Applicable Commitment Percentage, up to but not exceeding a Dollar Value equal to the Domestic Revolving Credit Commitment of such Multicurrency Facilities Lender, provided, however, that the Multicurrency Facilities Lenders will not be required and shall have no obligation to make any Domestic Advance (i) so long as a Default or an Event of Default has occurred and is continuing or (ii) if the Agent has accelerated the maturity of the Notes as a result of an Event of Default; provided further, however, that immediately after giving effect to each Domestic Advance, the Total Domestic Utilization shall not exceed the Total Domestic Revolving Credit Commitment. Within such limits, the Multicurrency Facilities Borrowers may borrow, repay and reborrow hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, the Revolving Credit Termination Date; provided, however, that (x) no Fixed Rate Loan shall be made which has an Interest Period that extends beyond the Revolving Credit Termination Date and (y) each Fixed Rate Loan may, subject to the provisions of Section 2.09, be repaid only on the last day of the Interest Period with respect thereto. The Multicurrency Facilities Borrowers agree that if at any time the Total Domestic Utilization shall exceed the Total Domestic Revolving Credit Commitment, the Multicurrency Facilities Borrowers shall immediately reduce the outstanding Domestic Revolving Loans such that, as a result of such reduction, the Total Domestic Revolving Credit Facility shall equal or exceed the Total Domestic Utilization. (b) Amounts, Advances and Rate Selection. (i) Each request for a Domestic Advance of an Alternative Currency under a Borrowing Notice shall constitute such Multicurrency Facilities Borrower's request for a Domestic Revolving Loan of the Dollar Value of the amount of the Alternative Currency specified in such Borrowing Notice and for such Loan to be made available by the Multicurrency Facilities Lenders to such Multicurrency Facilities Borrower in the Alternative Currency Equivalent Amount of such Dollar Value (determined based on the Advance Date Exchange Rate applicable to such Domestic Advance). The principal amount outstanding on any Domestic Loan shall be recorded in the Agent's records in Dollars 37 (in the case of a Domestic Advance of an Alternative Currency as if the Loan had initially been made in Dollars), based on the amount of any Domestic Advance and on the Dollar Value of the initial Advance of an Alternative Currency, as reduced from time to time by the Dollar Equivalent Amount (based on the Advance Date Exchange Rate applicable to such Domestic Advance) of any principal payments with respect to such Domestic Advance. In the event a Fixed Rate Loan of an Alternative Currency is continued, such election to continue the Fixed Rate Loan shall be treated as a Domestic Advance and the Agent shall notify the applicable Borrower and the Multicurrency Facilities Lenders of the Advance Date Exchange Rate, Interest Period and the Eurodollar Rate for such continued Fixed Rate Loan. The Lenders shall each be deemed to have made a Domestic Advance to such Multicurrency Facilities Borrower of its Applicable Commitment Percentage of such Loan of an Alternative Currency and the Agent shall apply the Advance Date Exchange Rate for such new Interest Period to such continued Alternative Currency Equivalent Amount to determine the new Dollar Value of such Fixed Rate Loan and shall adjust its books accordingly. In the event that such adjustment with respect to a continued Domestic Loan would cause the Total Domestic Utilization to exceed the Total Domestic Revolving Credit Commitment, the Multicurrency Facilities Borrowers shall, immediately on the effective date of such continuation, repay (a "Rate Adjustment Payment") the portion of such converted Loan (applying the new Advance Date Exchange Rate) necessary to ensure that the Total Domestic Utilization does not exceed the Total Domestic Revolving Credit Commitment, provided further that the Domestic Facility Borrowers shall not be required to pay any additional compensation pursuant to Section 4.04(a) with respect to a prepayment of a Domestic Loan required by this sentence if such prepayment is made immediately on the effective date of the continuation giving rise to such prepayment. For the purposes of determining the amount of Domestic Loans plus Domestic Letters of Credit Outstandings plus Domestic Acceptance Usage plus Swing Line Outstandings, it is intended by the parties that all Domestic Loans shall be the functional equivalent of Loans made and repaid (based on the applicable Advance Date Exchange Rate for each Advance) in Dollars. It is recognized that one or more Lenders may elect to record Domestic Loans or Domestic Advances in Alternative Currencies. The Agent shall maintain records sufficient to identify at any time, (i) the Advance Date Exchange Rate with respect to each Domestic Advance, and (ii) the portion of the outstanding Domestic Revolving Loans attributable to each Domestic Advance. There shall be no more than eight (8) Domestic Revolving Loans of an Alternative Currency outstanding at any one time. (ii) The Total Domestic Utilization shall not exceed at any time an amount equal to the Total Domestic Revolving Credit Commitment. Each Domestic Revolving Loan and each conversion under Section 2.09 shall be (A) in the case of Fixed CD or Eurodollar Rate Loans, in an amount not less than $3,000,000 (or as to Eurodollar Rate Loans the equivalent thereof if in an Alternative Currency) and if greater in integral multiples of $1,000,000 (or as to 38 Eurodollar Rate Loans the equivalent thereof if in an Alternative Currency plus accrued interest rounded upward to the nearest $10,000), and (B) in the case of Domestic Base Rate Loans in an amount not less than $1,000,000, and, if greater, an integral multiple of $100,000. (iii) For each Domestic Advance an Authorized Representative shall give the Agent at least (A) three (3) Business Days irrevocable telecopy or telex notice of each Fixed Rate Loan in an Alternative Currency (whether representing an additional borrowing hereunder or the conversion of borrowing hereunder) prior to 10:30 A.M., Charlotte, North Carolina time, (B) three (3) Business Days irrevocable telecopy or telex notice prior to 10:30 A.M., Charlotte, North Carolina time in the case of Eurodollar Rate Loans in Dollars or two (2) Business Days irrevocable telecopy or telex notice prior to 10:30 A.M. Charlotte, North Carolina time in the case of Fixed CD Loans, and, (C) irrevocable telephonic or telefacsimile notice of each Floating Rate Loan representing a borrowing or conversion hereunder prior to 10:30 A.M. Charlotte, North Carolina time on the day of such proposed Floating Rate Loan. Each such Borrowing Notice, which shall be effective upon receipt by the Agent, shall specify the type of Loan (Fixed Rate or Floating Rate), whether Dollar or Alternative Currency, amount of the Domestic Loan for which the Domestic Advance is to be made, the date of borrowing and the Interest Period to be used in the computation of interest. The Authorized Representative shall provide the Agent written confirmation of each such telephonic notice on the same day by telefacsimile transmission in the form of a Borrowing Notice in the form attached hereto as Exhibit D-1, in each case with appropriate insertions, but failure to provide such confirmation shall not affect the validity of such telephonic notice. The duration of the initial Interest Period for each Domestic Loan shall be as specified in the initial Borrowing Notice. The Multicurrency Facilities Borrowers shall have the option to elect the duration of subsequent Interest Periods and to convert the Domestic Loans in accordance with Section 2.09 hereof. If the Agent does not receive a notice of election of duration of an Interest Period or to convert by the time prescribed hereby and by Section 2.09 hereof, the applicable Multicurrency Facilities Borrower shall be deemed to have elected a Floating Rate Loan bearing interest at the Domestic Base Rate. The Fixed CD Rate may only be elected to apply to Domestic Loans made in Dollars. The Floating CD Rate shall apply only to Swing Line Loans. (iv) Notice of receipt of each Borrowing Notice in respect of Domestic Loans shall be provided by the Agent to each Multicurrency Facilities Lender by telecopy or telex with reasonable promptness, but not later than 12:00 noon, Charlotte, North Carolina time on the same day as Agent's receipt of such notice from the Multicurrency Facilities Borrowers so long as such receipt is prior to 10:30 A.M. At approximately 10:00 A.M. Charlotte, North Carolina time two (2) Business Days preceding the date specified for a Domestic Advance of an Alternative Currency, the Agent shall determine the Advance Date Exchange Rate and the Applicable Rate. Not later than 11:00 A.M. Charlotte, North Carolina time two (2) Business Days preceding the date specified for each Domestic Advance of an Alternative Currency, the Agent shall 39 provide the applicable Multicurrency Facilities Borrower and each Multicurrency Facilities Lender notice by telefacsimile transmission of the Advance Date Exchange Rate applicable to such Domestic Advance, and the applicable Alternative Currency Equivalent Amount of the Domestic Loan or Domestic Loans required to be made by each Multicurrency Facilities Lender on such date, and the Dollar Value of such Domestic Loan or Domestic Loans and the Applicable Rate. (v) In the case of Domestic Advances in Dollars, each Lender shall, pursuant to the terms and conditions of this Agreement, not later than 12:00 noon, Charlotte, North Carolina time on the date specified for such Domestic Advance, make the amount of the Domestic Advance to be made by it on such day available to the Agent by depositing or transferring the proceeds thereof in immediately available funds to the Agent, at the Principal Office. The amount so received by the Agent shall, subject to the terms of this Agreement, be made available to the applicable Multicurrency Facilities Borrower by deposit of the proceeds to an account of such Multicurrency Facilities Borrower maintained at the Principal Office or otherwise as shall be directed in the applicable Borrowing Notice. (vi) In the case of Domestic Advances of an Alternative Currency, not later than 9:00 A.M., Charlotte, North Carolina time on the date specified for each Domestic Advance, each Multicurrency Facilities Lender shall, pursuant to the terms and subject to the conditions of this Agreement, make the amount of the Domestic Loan or Domestic Loans to be made by it on such day available to the applicable Multicurrency Facilities Borrower at the Funding Bank, to the account of the Agent with the Funding Bank. The amount so received by the Funding Bank shall, subject to the terms and conditions of the Loan Documents and upon instruction from the Agent to the Funding Bank on the same day but no later than 9:00 A.M. Charlotte, North Carolina time, be made available to the applicable Multicurrency Facilities Borrower by delivery of the Alternative Currency Equivalent Amount to such Multicurrency Facilities Borrower's account with the Funding Bank. (vii) Notwithstanding the foregoing, if a drawing is made under any Domestic Letter of Credit or presentment is made of a Domestic Acceptance prior to the Revolving Credit Termination Date and the applicable Multicurrency Facilities Borrower shall not immediately reimburse NationsBank for the amount of such draw or payment, then notice of such drawing or payment shall be provided promptly by NationsBank to the Agent and the Agent shall provide notice to each Multicurrency Facilities Lender by telephone or telefacsimile. If notice to the Multicurrency Facilities Lenders of a drawing under any Letter of Credit or payment under any Domestic Acceptance is given by the Agent at or before 12:00 noon Charlotte, North Carolina time on any Business Day, the applicable Multicurrency Facilities Borrower shall be deemed to have requested, and each Multicurrency Facilities Lender shall, pursuant to the conditions of this Agreement, make a Domestic Base Rate Loan under the Domestic Revolving Credit Facility in the amount of such Multicurrency Facilities Lender's Applicable Commitment Percentage of such drawing or payment (and in the case of a drawing in an Alternative Currency, a Floating Rate Loan, in an amount equal to such Multicurrency Facilities Lender's Applicable Commitment Percentage of the Dollar Equivalent Amount of such drawing or payment determined on the basis of the Spot Rate of Exchange on the date of drawing under the Letter of Credit) and shall pay such amount to the Agent for the account of NationsBank at the Principal Office in Dollars and in immediately available funds before 2:30 P.M. Charlotte, North Carolina time on the same Business Day. If notice to the Multicurrency Facilities Lenders is given by the Agent after 12:00 noon 40 Charlotte, North Carolina time on any Business Day, the applicable Multicurrency Facilities Borrower shall be deemed to have requested, and each Multicurrency Facilities Lender shall, pursuant to the terms and subject to the conditions of this Agreement, make a Domestic Base Rate Loan under the Domestic Revolving Credit Facility in the amount of such Multicurrency Facilities Lender's Applicable Commitment Percentage of such drawing or payment (and in the case of a drawing in an Alternative Currency, a Domestic Base Rate Loan, in an amount equal to such Multicurrency Facilities Lender's Applicable Commitment Percentage of the Dollar Equivalent Amount of such drawing or payment determined on the basis of the Spot Rate of Exchange on the date of drawing under the Letter of Credit) and shall pay such amount to the Agent for the account of NationsBank at the Principal Office in Dollars and in immediately available funds before 12:00 noon Charlotte, North Carolina time on the next following Business Day. Such Domestic Base Rate Loan shall continue unless and until the applicable Multicurrency Facilities Borrower converts such Floating Rate Loan in accordance with the terms of Section 2.09 hereof. 2.02 Payment of Interest. (a) The Multicurrency Facilities Borrowers shall pay interest to the Agent for the account of each Multicurrency Facilities Lender on the outstanding and unpaid principal amount of each Domestic Loan made by such Multicurrency Facilities Lender for the period commencing on the date of such Domestic Loan until such Loan shall be due at the then applicable Floating Rate for Floating Rate Loans or applicable Fixed Rate for Fixed Rate Loans, such payments to be made in Dollars with respect to Loans made in Dollars, and at the Applicable Rate in the case of Domestic Loans made in Alternative Currency, such payments to be made in the appropriate Alternative Currency as designated by the Authorized Representative pursuant to Section 2.01 hereof or as otherwise provided herein; provided, however, that if any amount shall not be paid when due (at maturity, by acceleration or otherwise), all amounts outstanding hereunder shall bear interest thereafter (i) in the case of a Fixed Rate Loan, until the end of 41 the Interest Period with respect to such Fixed Rate Loan, at a rate of two percent (2%) above such Fixed Rate and (ii) thereafter, and with respect to Floating Rate Loans, at a rate of interest per annum which shall be two percent (2%) above the Domestic Base Rate or the Floating CD Rate, as applicable, or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. (b) Interest on each Domestic Loan shall be computed on the basis of a year of 360 days and calculated for the actual number of days elapsed provided that for Alternative Currency Loans for which a 365-day basis is the only market practice available to the Agent for such Loan, interest shall be calculated on the basis of a year of 365-366 days, as the case may be, for the actual days elapsed. Interest on each Domestic Loan shall be paid (a) quarterly in arrears on the last Business Day of each fiscal quarter, commencing July 31, 1996, on each Floating Rate Loan, (b) on the last day of the applicable Interest Period for each Fixed Rate Loan and, if the Interest Period extends for more than three months, at intervals of three months after the first day of the Interest Period and (c) on the Revolving Credit Termination Date. Interest on amounts not paid when due shall be payable on demand. 2.03 Payment of Principal. (a) The principal amount of each Domestic Loan (other than a Competitive Bid Loan) shall be due and payable to the Agent for the benefit of each Multicurrency Facilities Lender in full on the Revolving Credit Termination Date. Competitive Bid Loans shall be due and payable on the last day of the Interest Period for such Loan. The duration of the initial Interest Period for each Domestic Loan that is a Fixed Rate Loan shall be as specified in the initial Borrowing Notice. The Multicurrency Facilities Borrowers shall have the option to elect the duration of subsequent Interest Periods and to convert the Domestic Loans in accordance with Section 2.09 hereof. If the Agent does not receive a notice of election of duration of an Interest Period or to convert by the time prescribed by Section 2.09 hereof, the applicable Multicurrency Facilities Borrower shall be deemed to have elected to convert such Domestic Loan to (or continue such Domestic Loan as) a Domestic Base Rate Loan until the Multicurrency Facilities Borrower notifies the Agent in accordance with Section 2.09. (b) Each payment of principal (including any prepayment) and payment of interest in respect of Domestic Loans shall be made to the Agent at the Principal Office, for the account of each Multicurrency Facilities Lender's applicable Lending Office, to be recorded in Dollars as set forth in Section 2.01(b). The repayment of such principal amount in respect of Loans made in an Alternative Currency shall be made in the appropriate Alternate Currency as follows: the portion of the outstanding Domestic Loans attributable to each specified Domestic Advance (or the continuation or conversion thereof) (as determined from the Agent's 42 records) shall be repaid in the same Alternative Currency as such Domestic Advance. Each such payment shall be made in immediately available funds before 12:30 P.M. Charlotte, North Carolina time on the date such payment is due. The Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of the applicable Multicurrency Facilities Borrower with the Agent. The Multicurrency Facilities Borrowers shall give the Agent prior telephonic notice of any payment of principal, such notice to be given by not later than 11:00 A.M. Charlotte, North Carolina time, on the date of such payment. (c) The Agent shall deem any payment by or on behalf of the Multicurrency Facilities Borrowers hereunder that is not made both (a) in Dollars in the case of Domestic Loans made in Dollars and the required Alternative Currency in the case of Domestic Loans made in Alternative Currencies and in immediately available funds and (b) prior to 12:30 P.M. Charlotte, North Carolina time to be a non-conforming payment. Any such payment shall not be deemed to be received by the Agent until the time such funds become available funds in the required currency. The Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the Multicurrency Facilities Lenders (confirmed in writing) if any payment is non-conforming. Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at a rate of interest per annum which shall be two percent (2%) above the Domestic Base Rate or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. (d) In the event that any payment hereunder or under the Multicurrency Facilities Notes becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day; provided that interest shall continue to accrue during the period of any such extension. 2.04 Competitive Bid Loans. (a) In addition to borrowings of Syndicated Loans, at any time prior to the Revolving Credit Termination Date the Multicurrency Facilities Borrowers may, as set forth in this Section 2.04, request the Multicurrency Facilities Lenders to make offers to make Competitive Bid Loans to the Multicurrency Facilities Borrowers in Dollars. The Multicurrency Facilities Lenders may, but shall have no obligation to, make such offers and the Multicurrency Facilities Borrowers may, but shall have no obligation to, accept any such offers in the manner set forth in this Section 2.04. Competitive Bid Loans shall be Absolute Rate Loans, provided that: 43 (i) the Total Domestic Utilization shall not exceed the Total Domestic Revolving Credit Commitment; (ii) there may be no more than four (4) different Interest Periods for Competitive Bid Loans outstanding at the same time; (iii) the aggregate amount of outstanding Competitive Bid Loans of a Multicurrency Facilities Lender shall not exceed at any time an amount equal to $25,000,000; (iv) no Competitive Bid Loan shall have a maturity date subsequent to the Revolving Credit Termination Date; and (v) the aggregate amount of Competitive Bid Loans outstanding at any time shall not exceed $25,000,000 in the aggregate. (b) When a Borrower wishes to request offers to make Competitive Bid Loans, it shall give the Agent (which shall promptly notify the Multicurrency Facilities Lenders) notice (a "Competitive Bid Quote Request") to be received no later than 10:00 A.M. on the Business Day next preceding the date of borrowing proposed therein, (or such other time and date as such Multicurrency Facilities Borrower and the Agent, with the consent of the Required Lenders, may agree). The Multicurrency Facilities Borrowers may request offers to make Competitive Bid Loans for up to three (3) different Interest Periods in a single notice; provided that the request for each separate Interest Period shall be deemed to be a separate Competitive Bid Quote Request for a separate borrowing (a "Competitive Bid Borrowing") and there shall not be outstanding at any one time more than four (4) Competitive Bid Borrowings. Each such Competitive Bid Quote Request shall be substantially in the form of Exhibit H hereto and shall specify as to each Competitive Bid Borrowing: (i) the proposed date of such borrowing, which shall be a Business Day; (ii) the aggregate amount of such Competitive Bid Borrowing, which shall be at least $5,000,000 (or a larger multiple of $1,000,000) but shall not cause the limits specified in Section 2.04(a) hereof to be violated; (iii) the duration of the Interest Period applicable thereto; and (iv) the date on which the Competitive Bid Quotes are to be submitted if it is before the proposed date of borrowing (the date on which such Competitive Bid Quotes are to be submitted is called the "Quotation Date"). 44 Except as otherwise provided in this Section 2.04(b), no Competitive Bid Quote Request shall be given within five (5) Business Days (or such other number of days as the applicable Multicurrency Facilities Borrower and the Agent, with the consent of the Required Lenders, may agree) of any other Competitive Bid Quote Request. (c) (i) Each Multicurrency Facilities Lender may submit one or more Competitive Bid Quotes, each containing an offer to make a Competitive Bid Loan in response to any Competitive Bid Quote Request; provided that, if a Multicurrency Facilities Borrower's request under Section 2.04(b) hereof specified more than one Interest Period, such Multicurrency Facilities Lender may make a single submission containing one or more Competitive Bid Quotes for each such Interest Period. Each Competitive Bid Quote must be submitted to the Agent not later than 10:00 A.M. Charlotte, North Carolina time on the Quotation Date (or such case, such other time and date as the applicable Multicurrency Facilities Borrower and the Agent, with the consent of the Required Lenders, may agree); provided, that any Competitive Bid Quote may be submitted by the Agent (or its Applicable Lending Office) only if the Agent (or such Applicable Lending Office) notifies the Multicurrency Facilities Borrower of the terms of the offer contained therein not later than 9:45 A.M. Charlotte, North Carolina time on the Quotation Date. Subject to Article IV, Article VII and X hereof, any Competitive Bid Quote so made shall be irrevocable except with the consent of the Agent given on the instructions of the applicable Multicurrency Facilities Borrower. (ii) Each Competitive Bid Quote shall be substantially in the form of Exhibit I hereto and shall specify: (A) the proposed date of borrowing and the Interest Period therefor; (B) the principal amount of the Competitive Bid Loan for which each such order is being made, which principal amount shall be at least $5,000,000 (or a larger multiple of $1,000,000); provided that the aggregate principal amount of all Competitive Bid Loans for which a Lender submits Competitive Bid Quotes (x) may not exceed $25,000,000 and (y) may not exceed the principal amount of the Competitive Bid Borrowing for a particular Interest Period for which offers were requested; (C) the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/10,000th of 1%) offered for each such Competitive Bid Loan (the "Absolute Rate"); and 45 (D) the identity of the quoting Lender. Unless otherwise agreed by the Agent and the applicable Multicurrency Facilities Borrower, no Competitive Bid Quote shall contain qualifying, conditional or similar language or propose terms other than or in addition to those set forth in the applicable Competitive Bid Quote Request and, in particular, no Competitive Bid Quote may be conditioned upon acceptance by the applicable Multicurrency Facilities Borrower of all (or some specified minimum) of the principal amount of the Competitive Bid Loan for which such Competitive Bid Quote is being made. (d) The Agent shall, as promptly as practicable after the Competitive Bid Quote is submitted (but in any event not later than 10:30 A.M. Charlotte, North Carolina time on the Quotation Date), notify the applicable Multicurrency Facilities Borrower of the terms (i) of any Competitive Bid Quote submitted by a Multicurrency Facilities Lender that is in accordance with Section 2.04(c) hereof and (ii) of any Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a previous Competitive Bid Quote submitted by such Multicurrency Facilities Lender with respect to the same Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall be disregarded by the Agent unless such subsequent Competitive Bid Quote is submitted solely to correct a manifest error in such former Competitive Bid Quote. The Agent's notice to the applicable Multicurrency Facilities Borrower shall specify (A) the aggregate principal amount of the Competitive Bid Borrowing for which orders have been received and (B) the respective principal amounts and Absolute Rates so offered by each Multicurrency Facilities Lender (identifying the Multicurrency Facilities Lender that made each Competitive Bid Quote). (e) Not later than 11:00 A.M. Charlotte, North Carolina time on the Quotation Date (or such other time and date as the applicable Multicurrency Facilities Borrower and the Agent, with the consent of the Required Lenders, may agree), the applicable Multicurrency Facilities Borrower shall notify the Agent of its acceptance or nonacceptance of the offers so notified to it pursuant to Section 2.04(d) hereof (and the failure of the applicable Multicurrency Facilities Borrower to give such notice by such time shall constitute nonacceptance) and the Agent shall promptly notify each affected Multicurrency Facilities Lender. In the case of acceptance, such notice shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The applicable Borrower may accept any Competitive Bid Quote in whole or in part (provided that any Competitive Bid Quote accepted in part shall be at least $5,000,000 or a larger multiple of $1,000,000); provided that: (i) the aggregate principal amount of each Competitive Bid Borrowing may not exceed the applicable amount set forth in the related Competitive Bid Quote Request; 46 (ii) the aggregate principal amount of each Competitive Bid Borrowing shall be at least $5,000,000 (or a larger multiple of $1,000,000) but shall not cause the limits specified in Section 2.04(a) hereof to be violated; (iii) acceptance of offers may be made only in ascending order of Absolute Rates, beginning with the lowest rate so offered; and (iv) the Multicurrency Facilities Borrowers may not accept any offer where the Agent has correctly advised the Multicurrency Facilities Borrowers that such offer fails to comply with Section 2.04(c)(ii) hereof or otherwise fails to comply with the requirements of this Agreement (including, without limitation, Section 2.04(a) hereof). If offers are made by two or more Lenders with the same Absolute Rates, for a greater aggregate principal amount than the amount in respect of which offers are accepted for the related Interest Period after the acceptance of all offers, if any, of all lower Absolute Rates offered by any Multicurrency Facilities Lender for such related Interest Period, the principal amount of Competitive Bid Loans in respect of which such offers are accepted shall be allocated by the applicable Multicurrency Facilities Borrower among such Multicurrency Facilities Lenders as nearly as possible (in amounts of at least $5,000,000 or larger multiples of $1,000,000) in proportion to the aggregate principal amount of such offers. Determinations by the applicable Multicurrency Facilities Borrower of the amounts of Competitive Bid Loans and the lowest bid after adjustment as provided in Section 2.04(e)(iii) shall be conclusive in the absence of manifest error. (f) Any Multicurrency Facilities Lender whose offer to make any Competitive Bid Loan has been accepted shall, not later than 1:00 P.M. Charlotte, North Carolina time on the date specified for the making of such Loan, make the amount of such Loan available to the Agent at the Principal Office in Dollars and in immediately available funds, for account of the applicable Multicurrency Facilities Borrower. The amount so received by the Agent shall, subject to the terms and conditions of this Agreement, be made available to the applicable Multicurrency Facilities Borrower on such date by depositing the same, in Dollars and in immediately available funds, in an account of the Multicurrency Facilities Borrowers maintained at the Principal Office or otherwise as shall be directed by the applicable Multicurrency Facilities Borrower. 2.05 Multicurrency Facilities Notes. (a) Syndicated Loans made by each Multicurrency Facilities Lender shall be evidenced by the Domestic Revolving Credit Note payable to the order of such Lender in the respective amount of its Applicable Commitment Percentage of the Total Domestic Revolving Credit Commitment, which Domestic Revolving Credit Note shall be dated the Closing Date and shall be 47 duly completed, executed and delivered by the Multicurrency Facilities Borrowers. (b) Swing Line Loans made by NationsBank shall be evidenced by the Swing Line Note payable to the order of NationsBank, which Swing Line Note shall be dated the Closing Date and shall be duly completed, executed and delivered by TDC. (c) Competitive Bid Loans made by each Multicurrency Facilities Lender shall be evidenced by the Competitive Bid Note payable to the order of such Lender in the amount of $25,000,000, which Competitive Bid Note shall be dated the Closing Date and shall be duly completed, executed and delivered by the Multicurrency Facilities Borrowers. 2.06 ProRata Payments. Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the Syndicated Loans and the fees described in Section 2.10 hereof shall be made to the Agent for the account of the Lenders pro rata based on their Applicable Commitment Percentages of the Total Domestic Revolving Credit Commitment, (b) all payments to be made by the Multicurrency Facilities Borrowers for the account of each of the Multicurrency Facilities Lenders on account of principal, interest and fees, shall be made without set-off or counterclaim, and (c) the Agent will promptly distribute payments received to the Multicurrency Facilities Lenders. Notwithstanding the foregoing, in the event any Multicurrency Facilities Lender shall not be able to make a Fixed Rate Loan as provided in Section 4.05, interest shall be allocated to each Multicurrency Facilities Lender according to the interest rate payable to such Multicurrency Facilities Lender. 2.07 Reductions. The Multicurrency Facilities Borrowers shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days written notice to the Agent to reduce the Total Domestic Revolving Credit Commitment. The Agent shall give each Multicurrency Facilities Lender, within one (1) Business Day, telephonic notice (confirmed in writing) of such reduction. Each such reduction shall be in the aggregate amount of $5,000,000 or such greater amount which is in an integral multiple of $1,000,000, and shall permanently reduce the Total Domestic Revolving Credit Commitment. No such reduction shall result in the payment of any Fixed Rate Loan other than on the last day of the Interest Period of such Loan unless such prepayment is accompanied by amounts due, if any, under Section 4.04. Each such reduction of the Total Domestic Revolving Credit Commitment shall be accompanied by payment of the Notes to the extent that the Total Domestic Utilization exceeds the Total Domestic Revolving Credit Commitment, after giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. 48 2.08 Increase and Decrease in Amounts. The amount of the Total Domestic Revolving Credit Commitment which shall be available to the Multicurrency Facilities Borrowers shall be reduced by the aggregate amount of all Domestic Letters of Credit Outstandings, Swing Line Outstandings, Domestic Acceptance Usage and Competitive Bid Loans. 2.09 Conversions and Elections of Subsequent Interest Periods. Provided that no Default or Event of Default shall have occurred and be continuing and subject to the limitations set forth below and in Sections 4.01(b), 4.02 and 4.03 hereof, the Multicurrency Facilities Borrowers may: (a) upon notice to the Agent on or before 10:30 A.M. Charlotte, North Carolina time on any Business Day convert all or a part of Fixed Rate Loans (other than Competitive Bid Loans) to Floating Rate Loans under the Domestic Revolving Credit Facility on the last day of the Interest Period for such Fixed Rate Loans; (b) on three (3) or in the case of conversions into or continuations of Domestic Loans as Fixed CD Loans two (2)) Business Days' notice to the Agent on or before 10:30 A.M. Charlotte, North Carolina time: (i) elect a subsequent Interest Period for all or a portion of Fixed Rate Loans (other than Competitive Bid Loans) under the Domestic Revolving Credit Facility of Dollars or any Alternate Currency to begin in the same currency on the last day of the current Interest Period for such Fixed Rate Loans; (ii) elect that any Fixed Rate Loan in Dollars (other than Competitive Bid Loans) under the Domestic Revolving Credit Facility be converted on the last day of the Interest Period for any Fixed Rate Loan into another Fixed Rate Loan in Dollars; and (iii) convert Floating Rate Loans under the Domestic Revolving Credit Facility to Fixed Rate Loans (other than Competitive Bid Loans) on any Business Day. Notice of any such elections or conversions shall be effected by receipt of an appropriate Borrowing Notice and shall specify the effective date of such election or conversion and the Interest Period to be applicable to the Domestic Revolving Loan as continued or converted. Each election and conversion pursuant to this Section 2.09 shall be subject to the limitations on Fixed Rate Loans set forth in the definition of "Interest Period" herein and in Section 2.01 and Article IV hereof. All such continuations or conversions of Domestic Revolving Loans shall be effected pro rata based on the Applicable Commitment Percentages of the Lenders in respect of the Total Domestic Revolving Credit Commitment. 49 2.10 Unusued Fee. For the period beginning on the Closing Date and ending on the Revolving Credit Termination Date (or such earlier date on which the Domestic Revolving Credit Facility has terminated), the Multicurrency Facilities Borrowers agree to pay to the Agent, for the pro rata benefit of the Multicurrency Facilities Lenders based on their Applicable Commitment Percentages of the Total Domestic Revolving Credit Commitment, an unused fee equal to the Applicable Unused Fee times the sum of the daily amount by which the Total Domestic Revolving Credit Commitment exceeds the sum of average daily (i) Domestic Revolving Loans, plus (ii) Domestic Letter of Credit Outstanding, plus (ii) Domestic Acceptance Usage. Swing Line Loans and Competitive Bid Loans shall not be outstanding Loans for purposes of determining such fee. Such payments of fees provided for in this Section 2.10 shall be due in arrears on the last Business Day of each July, October, January and April beginning July 31, 1996 to and on the Revolving Credit Termination Date (or such earlier date on which the Revolving Credit Facility has terminated). Notwithstanding the foregoing, so long as any Multicurrency Facilities Lender fails to make available any portion of its Domestic Revolving Credit Commitment when requested, such Lender shall not be entitled to receive payment of its pro rata share of such fee until such Lender shall make available such portion. Such fee shall be calculated on the basis of a year of 360 days for the actual number of days elapsed. 2.11 Deficiency Advances. No Multicurrency Facilities Lender shall be responsible for any default of any other Multicurrency Facilities Lender in respect to such other Multicurrency Facilities Lender's obligation to make any Domestic Revolving Loan hereunder nor shall the Domestic Revolving Credit Commitment of any Multicurrency Facilities Lender hereunder be increased as a result of such default of any other Multicurrency Facilities Lender. Without limiting the generality of the foregoing, in the event any Multicurrency Facilities Lender shall fail to advance funds to a Domestic Revolving Borrower as herein provided, the Agent may in its discretion, but shall not be obligated to, advance under the applicable Domestic Revolving Credit Note in its favor as a Multicurrency Facilities Lender all or any portion of such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal of and interest on such deficiency advance in the same manner and at the same interest rate or rates to which such other Multicurrency Facilities Lender would have been entitled had it made such advance under its applicable Domestic Revolving Credit Note; provided that, upon payment to the Agent from such other Multicurrency Facilities Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to the Agent by the applicable Multicurrency Facilities Borrower on each Domestic Revolving Loan comprising the deficiency advance at the interest rate per annum for overnight borrowing by the Agent from the Federal Reserve Bank, then such payment shall be credited against the applicable Domestic 50 Revolving Credit Note of the Agent in full payment of such deficiency advance and the applicable Multicurrency Facilities Borrower shall be deemed to have borrowed the amount of such deficiency advance from such other Multicurrency Facilities Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by such Multicurrency Facilities Borrower thereon. 2.12 Adjustments by Agent. Notwithstanding the construction of "pro rata" to mean based on the Applicable Percentage Commitments and any provisions contained herein for the advancement of funds or distribution of payments on a pro rata basis, the Agent may, in its discretion, but shall not be obligated to, adjust downward or upward (but not in excess of any applicable Domestic Revolving Credit Commitment) the principal amount of any Domestic Revolving Loan to be made by any Multicurrency Facilities Lender to the nearest amount which is evenly divisible by $100, and make appropriate related adjustment in the distribution of payments of principal and interest on the Loans. 2.13 Use of Proceeds. The proceeds of the Loans made pursuant to the Domestic Revolving Credit Facility hereunder shall be used by the Multicurrency Facilities Borrowers to repay and terminate the Prior Domestic Facilities, Prior TD Canadian Facilities and the Prior TD France Facility, to finance Capital Expenditures and Permitted Acquisitions and for other working capital and general corporate needs of TDC and its Subsidiaries, to the extent permitted under this Agreement. 2.14 Extension of Revolving Xredit Termination Date. At the request of the Multicurrency Facilities Borrowers the Lenders may, in their sole discretion, elect to extend the Revolving Credit Termination Date for Multicurrency Facilities then in effect for additional periods of one year. The Borrowers shall notify the Lenders of their request for such an extension by delivering to the Agent notice of such request signed by an Authorized Representative not more than one hundred and twenty (120) days nor less than sixty (60) days prior to the second anniversary of the Closing Date. If all the Lenders shall elect to so extend both the Domestic Facilities and the Canadian Facilities, the Agent shall notify the Multicurrency Facilities Borrowers in writing within sixty (60) days of its receipt of such request for extension of the decision of the Lenders of whether to extend the Revolving Credit Termination Date for Multicurrency Facilities. Failure by the Agent to give such notice shall constitute refusal by the Lenders to extend the Revolving Credit Termination Date for the Multicurrency Facilities. 2.15 Swing Line. Notwithstanding any other provision of this Agreement to the contrary, in order to administer the Domestic Revolving Credit Facility in an efficient manner and to minimize the transfer of funds between the Agent and the Multicurrency Facilities Lenders, NationsBank shall make available Swing 51 Line Loans to TDC in Dollars prior to the Revolving Credit Termination Date. NationsBank shall not make any Swing Line Loan pursuant hereto (i) if the Borrowers are not in compliance with all the conditions to the making of Loans set forth in this Agreement, (ii) if after giving effect to such Swing Line Loan, the Swing Line Loans outstanding exceed $15,000,000, or (iii) if after giving effect to such Swing Line Loan, the Total Domestic Utilization exceeds the Total Domestic Revolving Credit Commitment. Loans made pursuant to this Section 2.15 shall be limited to Floating CD Loans. (i) TDC may borrow, repay and reborrow under this Section 2.15. Borrowings under the Swing Line may be made in amounts of $250,000 and multiples of $250,000 in excess thereof, upon telephonic (confirmed in writing) or telefacsimile request by an Authorized Representative of TDC made to NationsBank not later than 12:00 noon Charlotte, North Carolina time on the Business Day of the requested borrowing. Each repayment of a Swing Line Loan shall be in integral multiples of $250,000 with a minimum amount of $250,000. (ii) If TDC instructs NationsBank to debit its demand deposit account in an amount of any payment with respect to a Swing Line Loan, or NationsBank otherwise receives repayment after 2:00 P.M. Charlotte, North Carolina time, on a Business Day, such payment shall be deemed received on the next Business Day. TDC shall pay interest on Swing Line Loans quarterly on the last Business Day of each quarter, commencing July 31, 1996 and continuing on each October, January, April and July thereafter. Interest shall be calculated on the basis of a year of 360 days and calculated for the actual number of days elapsed. (iii) The Multicurrency Facilities Borrowers and each Multicurrency Facilities Lender which is or may become a party hereto acknowledge that all Swing Line Loans are to be made solely by NationsBank to TDC but that such Multicurrency Facilities Lender shall share the risk of loss with respect to such Advances in an amount equal to such Lender's Applicable Commitment Percentage of such Swing Line Loan. Upon demand according to its Applicable Commitment Percentage of such Swing Line Loan, each Multicurrency Facilities Lender shall promptly provide to NationsBank its purchase price therefor in an amount equal to its Participation therein, in which case such Swing Line Loan shall be deemed from and after such date (to the extent TDC has not converted such loan pursuant to Section 2.09) a Syndicated Loan made in accordance with the Agreement. The obligation of each Lender to so provide its purchase price to NationsBank shall be absolute and unconditional and shall not be affected by the occurrence of an Event of Default or any other occurrence or event. 52 (iv) TDC at its option may request an Advance as a Domestic Revolving Loan pursuant to Section 2.01 in an amount sufficient to repay any or all Swing Line Loans on any date (subject to three (3) Business Days prior notice in the case of Eurodollar Loans or (5) Business Days prior notice in the case of Loans in an Alternative Currency) and the Agent shall upon the receipt of such Advance, provide to NationsBank the amount necessary to repay such Swing Line Loan or Loans (which NationsBank shall then apply to such repayment) and credit any balance of the Domestic Revolving Loan in immediately available funds to an account of TDC at the Principal Office or as otherwise directed by TDC. The proceeds of such Advances shall be paid to NationsBank for application to the outstanding Swing Line Loans and the Lenders shall then be deemed to have made Domestic Revolving Loans in the amount of such Advances. The obligation of NationsBank to fund the Swing Line shall cease upon the earliest of (i) the occurrence of a Default or Event of Default, or (ii) the Revolving Credit Termination Date, or (iii) the date of resignation by NationsBank as Agent; provided that when a Default is no longer continuing NationsBank shall be obligated to provide Swing Line Loans unless payment of the Obligations has been accelerated. 2.16 Additional Multicurency Facilities Borrowers. Upon the request of the Multicurrency Facilities Borrowers as then constituted hereunder (the "Current Borrowers") and with the consent of the Agent and the Lenders, additional wholly-owned Subsidiaries of TDC may be added as Multicurrency Facilities Borrowers (each, an "Additional Borrower") as herein provided. Not later than twenty (20) days prior to the proposed effective date of such addition, an Authorized Representative of the Current Borrowers shall request the addition of such Additional Borrower by notice in writing to the Agent, which notice shall identify the proposed Additional Borrower and the proposed effective date of such addition, and shall constitute the Current Borrowers' representation and warranty to the Agents and the Lenders that they shall deliver or cause to be delivered, as appropriate, the documents required by this Section 2.16 in connection with such addition. If the Agent and the Lenders shall consent to the addition of such proposed Additional Borrower (which consent shall be indicated by written notice thereof from the Agent to the Multicurrency Facilities Borrowers and the Lenders, and which consent may be subject to additional conditions, including payments of additional fees as may be specified by the Agent in such notice), then such proposed Additional Borrower shall be and become a Multicurrency Facilities Borrower for all purposes of the Loan Documents upon the satisfaction of all of the following conditions: 53 (i) no Default or Event of Default shall exist or be continuing immediately prior to or on giving effect to such addition; (ii) the Additional Borrower and the Current Borrowers shall execute and deliver to the Lenders replacement Domestic Revolving Credit Notes and Competitive Bid Notes executed by each of them; (iii) the Additional Borrower, the Current Borrowers and all persons who have in effect a Guaranty in respect of the Domestic Loans (the "Domestic Credit Parties") shall execute and deliver an Assumption and Consent Agreement in the form attached as Exhibit J hereto; (iv) the Agent shall receive the opinion of counsel to the Domestic Credit Parties acceptable to the Agent addressed to the Agent and the Lenders as to the authorization, execution, delivery and enforceability of the documents described in clauses (ii) and (iii) and as to such other matters as it may request, such opinion to be acceptable in form and content to the Agent and its special counsel; (v) the Additional Borrower shall have furnished to the Agent its certificate appointing an initial Authorized Representative; and (vi) all additional conditions, including the payment of any fees in connection therewith, as may be specified by the Agent, shall have been satisfied. Upon satisfaction of such condition, the Additional Borrower shall thereafter be and become a Multicurrency Facilities Borrower for all purposes of the Loan Documents. 2.17 One Loan. (a) All Domestic Loans and Domestic Advances by the Multicurrency Facilities Lenders to any Multicurrency Facilities Borrower shall constitute the joint and several general obligation of each of the Multicurrency Facilities Borrowers. Each Multicurrency Facilities Borrower shall be jointly and severally liable to the Agent and the Multicurrency Facilities Lenders for all Obligations hereunder in respect of Multicurrency Facilities , regardless whether such Obligations arise as a result of Domestic Advances to such Borrower, it being stipulated and agreed that Domestic Advances hereunder to any Multicurrency Facilities Borrower inure to the benefit of each of the Borrowers, and that the Multicurrency Facilities Lenders are relying on the joint and several liability of the Multicurrency Facilities Borrowers in extending credit under the Multicurrency Facilities. (b) Each Multicurrency Facilities Borrower guarantees to the Multicurrency Facilities Lenders the payment in full of all of the Obligations of the other Multicurrency Facilities Borrowers to the 54 Multicurrency Facilities Lenders in respect of Multicurrency Facilities and further guarantees the due performance by each other Multicurrency Facilities Borrower of its respective duties and covenants made in favor of the Agent and the Multicurrency Facilities Lenders hereunder. Each Multicurrency Facilities Borrower agrees that the joint and several liability of the Multicurrency Facilities Borrowers shall not be impaired or affected by any modification, supplement, extension or amendment of any contract or agreement to which the parties thereto may hereafter agree, nor by any modification, release or other alteration of any of the rights of the Agent and the Multicurrency Facilities Lenders with respect to any collateral, nor by any delay, extension of time, renewal, compromise or other indulgence granted by the Agent and the Multicurrency Facilities Lenders with respect to any of the Obligations, nor by any other agreements or arrangements whatever with any other Multicurrency Facilities Borrower, and guarantor or any other Person, each Multicurrency Facilities Borrower hereby waiving all notice of any such delay, extension, release, substitution, renewal, compromise or other indulgence, and hereby consenting to be bound thereby as fully and effectually as if it had expressly agreed thereto in advance. The liability of each Multicurrency Facilities Borrower hereunder is direct and unconditional as to all of the Obligations hereunder in respect of the Multicurrency Facilities, and may be enforced without requiring the Agent or the Multicurrency Facilities Lenders first to resort to any other right, remedy or security; no Multicurrency Facilities Borrower shall have any right of subrogation, reimbursement or indemnity whatsoever, nor any right of recourse to security for any of the Obligations in respect of the Multicurrency Facilities, unless and until all of said Obligations have been paid in full. 2.18 Letters of Credit. NationsBank agrees, subject to the terms and conditions of this Agreement, to maintain the Existing Domestic Letters of Credit as Letters of Credit hereunder and upon request of a Multicurrency Facilities Borrower to issue from time to time for the account of such Borrower Domestic Letters of Credit upon delivery to NationsBank of a Letter of Credit Application therefor in form and content acceptable to NationsBank; provided, that the Domestic Letter of Credit Outstandings hereunder shall not exceed the Domestic Letter of Credit Commitment. No Domestic Letter of Credit shall be issued by NationsBank with an expiry date or payment date occurring subsequent to the fifth Business Day preceding the Revolving Credit Termination Date and no Commercial Letter of Credit shall have an expiry date occurring more than six (6) months after the date of its issuance. NationsBank shall not be required to issue any Letter of Credit if Total Domestic Utilization when added to the face amount of any requested Domestic Letter of Credit exceeds the Total Domestic Revolving Credit Commitment. 2.19 Acceptances. NationsBank agrees, subject to the terms and conditions hereof until the day prior to the Revolving Credit 55 Termination Date, to maintain the Existing Domestic Acceptances as Domestic Acceptances hereunder and, upon the request of a Multicurrency Facilities Borrower, to create, from time to time, Domestic Acceptances for the benefit of such Borrower. NationsBank shall create such Domestic Acceptances by accepting and discounting drafts drawn by the Borrower under and pursuant to this Agreement. NationsBank shall not accept any such drafts unless the resulting Acceptance shall be a Domestic Acceptance as defined in Section 1.01 hereof. Upon accepting a draft NationsBank may discount the resulting Domestic Acceptance at a rate per annum (based on a year of 360 days) equal to the BA Rate. NationsBank shall not be required to create any Domestic Acceptance if the amount payable under such Domestic Acceptance when added to the Total Domestic Utilization exceeds the Total Domestic Revolving Credit Commitment. The face amount of Domestic Acceptances shall be an integral multiple of $500,000 and shall not be less than $1,000,000. The creation date and maturity date of each Domestic Acceptance shall be a Business Day. Notwithstanding the foregoing, the Agent shall not be obligated to create or discount any Domestic Acceptance as amended from time to time, (i) if creation thereof would cause the Agent to exceed the maximum amount of outstanding bankers' acceptances permitted by applicable law, or (ii) if, in the reasonable opinion of the Agent, general conditions in the public market for rediscounting bankers' acceptances render it inadvisable to do so. 2.20 Creation of Acceptance. Any request for creation of a Domestic Acceptance shall be made at least two (2) Business Days in advance of the day upon which such Domestic Acceptance is to be created (the "Domestic Acceptance Date"); such request to be in writing and in the form of Borrowing Notice set forth in Exhibit D-3. No Domestic Acceptance shall be created by NationsBank with a maturity date occurring subsequent to the Revolving Credit Termination Date. If NationsBank creates the requested Domestic Acceptance, then on or before 11:00 A.M., Charlotte, North Carolina time on the Domestic Acceptance Date, NationsBank shall notify the Borrower of the BA Rate plus Acceptance Addition at which the Domestic Acceptance will be discounted by NationsBank, and NationsBank shall promptly thereafter accept the draft of Multicurrency Facilities Borrower for the amount and Interest Period requested. Upon the discounting of each Domestic Acceptance, NationsBank shall credit Borrower's Account with an amount equal to the net proceeds of such discounted Domestic Acceptance. In addition, NationsBank shall promptly remit to the Agent the full amount of the Acceptance Addition and the Agent shall promptly transfer to each Domestic Facilities Lender its Applicable Commitment Percentage of such Acceptance Addition. In order to enable NationsBank to create Domestic Acceptances in the manner specified in this Section 2.20, the Multicurrency Facilities Borrowers agree to promptly upon request furnish to NationsBank a sufficient number of drafts conforming to NationsBank requirements. All drafts shall be manually signed by a properly authorized officer. Each Multicurrency Facilities Borrower will be bound by 56 each draft and Domestic Acceptance bearing the signature of an individual who may no longer be authorized or otherwise holding office of a Multicurrency Facilities Borrower at any time. Each Multicurrency Facilities Borrower agrees to compensate NationsBank for any loss or expense with respect to a draft or Domestic Acceptance dealt with by NationsBank under this Agreement. 2.21 Reimbursement (a) Each Multicurrency Facilities Borrower hereby unconditionally agrees immediately to pay to NationsBank on demand at the Principal Office (i) all amounts required to pay all drafts drawn or purporting to be drawn under the Domestic Letters of Credit and (ii) the face amount of each draft accepted by NationsBank on the maturity date of such draft, or in the event of an Event of Default or in the event a Domestic Acceptance is determined not to be eligible for discount, and any and all expenses of every kind incurred by NationsBank in connection with the Domestic Letters of Credit and Domestic Acceptances and in any event and without demand to place in the possession of NationsBank (which shall include Domestic Advances under the Domestic Revolving Credit Facility if permitted by Section 2.01(b)(vii) hereof) sufficient funds to pay all debts and liabilities arising under any Domestic Letter of Credit and Domestic Acceptance. The Multicurrency Facilities Borrowers' obligations to pay NationsBank under this Section 2.21, and the right of NationsBank to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever. NationsBank may charge the Borrower's Account or any other account any Multicurrency Facilities Borrower may have with it for any and all amounts NationsBank pays under a Domestic Letter of Credit or Domestic Acceptance; provided that to the extent permitted by Section 2.01(b)(vii), amounts shall be paid pursuant to Domestic Advances under the Domestic Revolving Credit Facility. Each Multicurrency Facilities Borrower agrees that NationsBank may, in its sole discretion, accept or pay, as complying with the terms of any Domestic Letter of Credit or Domestic Acceptance, any drafts or other documents otherwise in order which may be signed or issued by an administrator, executor, trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, liquidator, receiver, attorney in fact or other legal representative of a party who is authorized under such Domestic Letter of Credit or Domestic Acceptance to draw or issue any drafts or other documents. Each Multicurrency Facilities Borrower agrees to pay NationsBank interest on any amounts not paid when due hereunder at the Domestic Base Rate plus two percent (2%), or such lower rate as may be required by law. (b) In accordance with the provisions of Section 2.01(b)(vii) hereof, NationsBank shall notify the Agent (and shall also notify the applicable Multicurrency Facilities Borrower) of any drawing under any Domestic Letter of Credit or payment of any draft, constituting a Domestic Acceptance issued for the account 57 of a Multicurrency Facilities Borrower as promptly as practicable following the receipt by NationsBank of such drawing. (c) Each Multicurrency Facilities Lender (other than NationsBank) shall automatically acquire on the date of issuance thereof, a Participation in the liability of NationsBank in respect of each Domestic Letter of Credit or Domestic Acceptance in an amount equal to such Lender's Applicable Commitment Percentage (determined in respect of the Total Domestic Revolving Credit Commitment) of such liability, and to the extent that any Multicurrency Facilities Borrower is obligated to pay NationsBank under Section 2.21(a), each Lender (other than NationsBank) thereby shall absolutely, unconditionally and irrevocably assume, and shall be unconditionally obligated to pay to NationsBank as hereinafter described, its Applicable Commitment Percentage (determined in respect of the Total Domestic Revolving Credit Commitment) of the liability of NationsBank under such Domestic Letter of Credit or Domestic Acceptance. Prior to the Revolving Credit Termination Date, each Multicurrency Facilities Lender (including NationsBank in its capacity as a Multicurrency Facilities Lender) shall, subject to the terms and conditions of this Article II, make a Domestic Base Rate Loan to the Borrower by paying to the Agent for the account of NationsBank at the Principal Office in Dollars and in immediately available funds, an amount equal to its Applicable Commitment Percentage (determined in respect of the Total Domestic Revolving Credit Commitment) of any drawing under a Domestic Letter of Credit or payment of a Domestic Acceptance, all as described and pursuant to Section 2.01(b)(vii). With respect to drawings under any of the Domestic Letters of Credit or payment of a Domestic Acceptance, each Multicurrency Facilities Lender, upon receipt from the Agent of notice of a drawing in the manner described in Section 2.01(b)(vii), shall promptly pay to the Agent for the account of NationsBank, prior to the applicable time set forth in Section 2.01(b)(vii), its Applicable Commitment Percentage (determined in respect of the Total Domestic Revolving Credit Commitment) of such drawing or payment. Simultaneously with the making of each such payment by a Multicurrency Facilities Lender to NationsBank, such Multicurrency Facilities Lender shall, automatically and without any further action on the part of NationsBank or such Multicurrency Facilities Lender, acquire a Participation in an amount equal to such payment (excluding the portion thereof constituting interest accruing before such Multicurrency Facilities Lender made such payment) in the related Reimbursement Obligation of the Borrower. The Reimbursement Obligations of the Multicurrency Facilities Borrowers shall be immediately due and payable whether by Domestic Advances made in accordance with Section 2.01(b)(vii) or otherwise. Each Multicurrency Facilities Lender's obligation to make payment to the Agent for the account of NationsBank pursuant to this Section 2.21, and the right of NationsBank to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and shall be made without any offset, abatement, withholding or reduction whatsoever. If any Multicurrency 58 Facilities Lender is obligated to pay but does not pay amounts to the Agent for the account of NationsBank in full upon such request as required by this Section 2.21(c), such Multicurrency Facilities Lender shall, on demand, pay to the Agent for the account of NationsBank interest on the unpaid amount for each day during the period commencing on the date of notice given to such Lender pursuant to Section 2.01(b)(vii) until such Multicurrency Facilities Lender pays such amount to the Agent for the account of NationsBank in full at the interest rate per annum for overnight borrowing by NationsBank from the Federal Reserve Bank. (d) Promptly following the end of each calendar month, NationsBank shall deliver to the Agent, and the Agent shall deliver to each Multicurrency Facilities Lender, a notice describing the aggregate undrawn amount of all Domestic Letters of Credit and aggregate face amount of all drafts constituting Domestic Acceptances accepted and outstanding at the end of such month. Upon the request of any Multicurrency Facilities Lender from time to time, NationsBank shall deliver to the Agent, and the Agent shall deliver to such Multicurrency Facilities Lender, any other information reasonably requested by such Multicurrency Facilities Lender with respect to each Domestic Letter of Credit and Domestic Acceptance then outstanding. (e) The issuance by NationsBank of each Domestic Letter of Credit and a Domestic Acceptance shall, in addition to the conditions precedent set forth in Section 5.01 hereof, be subject to the conditions that such Domestic Letter of Credit and Domestic Acceptance be in such form, contain such terms and support such transactions or obligations as shall be reasonably satisfactory to NationsBank consistent with the then current practices and procedures of NationsBank with respect to similar letters of credit and acceptances. All Domestic Letters of Credit shall be issued pursuant to and subject to the Uniform Customs and Practice for Documentary Credits, 1993 revision, International Chamber of Commerce Publication No. 500 and all subsequent amendments and revisions thereto. The applicable Multicurrency Facilities Borrower shall have executed and delivered such other instruments and agreements relating to such Domestic Letter of Credit and Domestic Acceptance as NationsBank shall have reasonably requested consistent with such practices and procedures. (f) Without duplication of Section 11.07 hereof, each Multicurrency Facilities Borrower hereby indemnifies and holds harmless NationsBank, each other Multicurrency Facilities Lender and the Agent from and against any and all claims and damages, losses, liabilities, costs or expenses which NationsBank, such other Multicurrency Facilities Lender or the Agent may incur (or which may be claimed against NationsBank, such other Multicurrency Facilities Lender or the Agent) by any Person by reason of or in connection with the issuance or transfer of or payment or failure to pay under any Domestic Letter of Credit or Domestic Acceptance; provided that the Multicurrency Facilities Borrowers shall not be 59 required to indemnify NationsBank, any other Multicurrency Facilities Lender or the Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, (i) caused by the willful misconduct or gross negligence of the party to be indemnified, (ii) caused by the failure of NationsBank to pay under any Domestic Letter of Credit or Domestic Acceptance after the presentation to it of a request strictly complying with the terms and conditions of such Domestic Letter of Credit or Domestic Acceptance, unless such payment or reimbursement is prohibited by any governmental authority, law, regulation, court order or decree, or (iii) paid or payable by any Multicurrency Facilities Lender under Sections 2.11 or 11.10 hereof. (g) Without limiting Borrowers' rights as set forth in Section 2.21(f) above, the obligation of the Multicurrency Facilities Borrowers to immediately reimburse Agent for drawings made under Domestic Letters of Credit or payment of Domestic Acceptances shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement and such Domestic Letters of Credit or Domestic Acceptances, under all circumstances whatsoever, including, without limitation, the following circumstances: (i) any lack of validity or enforceability of the Domestic Letter of Credit or Domestic Acceptance, the obligation supported by the Domestic Letter of Credit or Domestic Acceptance or any other agreement or instrument relating thereto (collectively, the "Domestic Related Documents"); (ii) any amendment or waiver of or any consent to or departure from all or any of the Domestic Related Documents; (iii) the existence of any claim, setoff, defense or other rights which any Multicurrency Facilities Borrower may have at any time against any beneficiary or any transferee of a Domestic Letter of Credit or Domestic Acceptance (or any persons or entities for whom any such beneficiary or any such transferee may be acting), Agent, Multicurrency Facilities Lenders or any other person or entity, whether in connection with the Loan Documents, the Domestic Related Documents or any unrelated transaction; (iv) any breach of contract or other dispute between any Multicurrency Facilities Borrower and any beneficiary or any transferee of a Domestic Letter of Credit or Domestic Acceptance (or any persons or entities for whom such beneficiary or any such transferee may be acting), Agent, Multicurrency Facilities Lenders or any other person or entity; (v) any draft, statement or any other document presented under the Domestic Letter of Credit or Domestic Acceptance proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; 60 (vi) any delay, extension of time, renewal, compromise or other indulgence or modification granted or agreed to by Agent, with or without notice to or approval by any Multicurrency Facilities Borrower in respect of any of a Multicurrency Facilities Borrower's indebtedness under this Agreement; or (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; provided, however, that nothing contained herein shall be deemed to release NationsBank or any other Multicurrency Facilities Lender of any liability for actual loss arising as a result of its gross negligence or willful misconduct. (h) Each Multicurrency Facilities Borrower acknowledges and agrees that the pricing for Domestic Acceptances hereunder is based upon the assumption that such Domestic Acceptances are "eligible" for discount by the Federal Reserve Banks and that the Multicurrency Facilities Lenders are not required to maintain reserves for such Domestic Acceptances under the Regulations of the Federal Reserve System. In the event the Federal Reserve System shall conclude the Domestic Acceptances created hereunder are ineligible or that reserves are required to be maintained in connection therewith, each Multicurrency Facilities Borrower shall and does hereby indemnify and hold the Agent and the Multicurrency Facilities Lenders harmless, and does hereby agree to, pay all reasonable costs, expenses, legal fees, penalties, as well as all retroactive, current and prospective reserve requirements arising in connection with such Domestic Acceptances. Additionally, each Multicurrency Facilities Borrower acknowledges and agrees that upon the Federal Reserve System reaching such conclusion, NationsBank and the other Multicurrency Facilities Lenders shall have no further obligation to create Domestic Acceptances and that in the event NationsBank and the other Multicurrency Facilities Lenders agree to create further Domestic Acceptances, those created may, at the option of NationsBank and the other Multicurrency Facilities Lenders, be priced at a rate higher than indicated in Section 2.19 in order to compensate NationsBank and the other Multicurrency Facilities Lenders for additional reserve requirements and other transactional costs. Notwithstanding anything to the contrary contained herein or otherwise, the Multicurrency Facilities Borrowers shall have no obligation to indemnify NationsBank and the other Multicurrency Facilities Lenders or to pay any extraordinary costs in connection with Domestic Acceptances which are determined by the Federal Reserve System to be ineligible solely and directly as a result of a mistake or error by NationsBank in performing ministerial functions with respect to the Domestic Acceptances. Additionally, each Multicurrency Facilities Borrower shall be entitled to dispute and contest any determination of ineligibility which gives rise to Multicurrency Facilities Borrowers' indemnification and promise to 61 pay set forth herein, provided, however, the Multicurrency Facilities Borrower shall diligently and expeditiously prosecute such dispute or contest. Each Multicurrency Facilities Borrower acknowledges and agrees that the refusal of the Federal Reserve System to recognize a dispute or contest raised by the Multicurrency Facilities Borrower shall in no way alter, impair, diminish or affect the obligations of the Multicurrency Facilities Borrowers set forth in this Subsection. Should the Multicurrency Facilities Borrowers fail promptly to pay for, dispute or contest any determination of ineligibility as herein provided, NationsBank and the other Multicurrency Facilities Lenders shall be entitled to pay, contest or dispute same and all sums expended by NationsBank and the other Multicurrency Facilities Lenders in doing so shall constitute additional Indebtedness of the Multicurrency Facilities Borrowers to the Multicurrency Facilities Lenders and shall bear interest from the date paid until the date repaid at the Domestic Base Rate plus two percent (2%) per annum. 2.22 Domestic Letter of Credit Fee. (a) For the period beginning on the Closing Date and ending on the Revolving Credit Termination Date, the Multicurrency Facilities Borrowers agree to pay to the Agent, for the pro rata benefit of the Multicurrency Facilities Lenders based on their Applicable Commitment Percentages determined in respect of the Total Domestic Revolving Credit Commitment, a fee for such period at a per annum rate equal to the Applicable Interest Addition for Eurodollar Rate Loans on the daily aggregate amount available to be drawn under Standby Letters of Credit and fees for such period at those rates established from time to time by the Agent. (b) For the period beginning on the Closing Date and ending on the Revolving Credit Termination Date, the Multicurrency Facilities Borrowers agree to pay to the Agent for the account of NationsBank as issuer of the Domestic Letter of Credit, a fee for such period at a per annum rate equal to .125% on the daily aggregate amount available to be drawn under Domestic Letters of Credit. (c) Such payments of fees provided for in this Section 2.22 shall be due with respect to each Domestic Letter of Credit quarterly in arrears, the first such payment to be made on the last Business Day of July 31, 1996 and on the last Business Day of each October, January, April and July thereafter. 2.23 Administrative Fees and Reserves. The Multicurrency Facilities Borrowers shall pay to NationsBank administrative and other fees, if any, in connection with the Domestic Letters of Credit and Domestic Acceptances in such amounts and at such times as NationsBank and the Multicurrency Facilities Borrowers shall agree from time to time. In addition, the Multicurrency Facilities Borrowers shall reimburse NationsBank for all costs or reduction in yield occurring by reason of the issuance by NationsBank of the Domestic Letters of Credit. 62 ARTICLE III CANADIAN FACILITIES 3.01 Revolving Credit Facility (a) Commitment. Subject to the terms and conditions of this Agreement, each Canadian Facilities Lender severally agrees to make Canadian Advances in Dollars or Canadian Dollars (as specified in the respective Borrowing Notice) to TD Canada, as specified in the Borrowing Notice, from time to time from the Closing Date until the Revolving Credit Termination Date on a pro rata basis as to the total borrowing requested by TD Canada on any day determined by its Applicable Commitment Percentage up to but not exceeding a Dollar Value equal to the Canadian Credit Commitment of such Canadian Facilities Lender, provided, however, that the Canadian Facilities Lenders will not be required and shall have no obligation to make any Canadian Advance (i) so long as a Default or an Event of Default has occurred and is continuing or (ii) if the Agent has accelerated the maturity of the Obligations as a result of an Event of Default; provided further, however, that immediately after giving effect to each Advance, the Dollar Value of Total Canadian Utilization shall not exceed the Total Canadian Revolving Credit Commitment. Within such limits, TD Canada may borrow, repay and reborrow hereunder, on a Business Day, from the Closing Date until, but (as to borrowings and reborrowings) not including, the Revolving Credit Termination Date; provided, however, that (x) no Eurodollar Rate Loan or Acceptance shall be made which has an Interest Period or maturity that extends beyond the Revolving Credit Termination Date and (y) each Eurodollar Rate Loan may, subject to the provisions of Section 3.08, be repaid only on the last day of the Interest Period with respect thereto. TD Canada agrees that if at any time the Total Canadian Utilization shall exceed the Total Canadian Revolving Credit Commitment, TD Canada shall immediately reduce the outstanding Canadian Loans such that, as a result of such reduction, the Total Canadian Revolving Credit Commitment shall equal or exceed the Total Canadian Utilization. CIBC agrees to establish in favor of TD Canada an overdraft facility in the amount of U.S. $5,000,000 to be utilized by TD Canada for working capital and general corporate needs of TD Canada. This overdraft facility may be availed by way of Canadian Prime Rate Loans and Domestic Base Rate Loans. Utilizations of this overdraft facility will constitute Canadian Loans and be included in Total Canadian Utilization. (b) Amounts, Advances and Rate Selection. (i) Each request for a Canadian Advance of the Alternative Currency under a Borrowing Notice shall constitute TD Canada's request for a Canadian Loan of the Dollar Value of the amount of the Alternative Currency specified in such Borrowing Notice and for such Canadian Loan to be made available by the Canadian Facilities Lenders to TD Canada in the Alternative Currency Equivalent Amount of such Dollar 63 Value (determined based on the Advance Date Exchange Rate applicable to such Canadian Advance). The principal amount outstanding on any Canadian Loan shall be recorded in the Canadian Agent's records in Dollars (in the case of a Canadian Advance of the Alternative Currency as if the Canadian Loan had initially been made in Dollars), based on the amount of any Canadian Advance and on the Dollar Value of the initial Canadian Advance of the Alternative Currency, as reduced from time to time by the Dollar Equivalent Amount (based on the Advance Date Exchange Rate applicable to such Advance) of any principal payments with respect to such Advance. In the event a Eurodollar Rate Loan of the Alternative Currency is continued such election to continue the Eurodollar Rate Loan shall be treated as a Canadian Advance and the Canadian Agent shall notify TD Canada and the Canadian Facilities Lenders of the Advance Date Exchange Rate, Interest Period and the Eurodollar Rate for such continued Eurodollar Rate Loan. The Canadian Facilities Lenders shall each be deemed to have made a Canadian Advance to TD Canada of its Applicable Commitment Percentage of such Canadian Loan of the Alternative Currency and the Canadian Agent shall apply the Advance Date Exchange Rate for such new Interest Period to such continued Alternative Currency Equivalent Amount to determine the new Dollar Value of such Eurodollar Rate Loan and shall adjust its books accordingly. In the event that such adjustment with respect to a continued Canadian Loan would cause the total Dollar Value of the outstanding Canadian Loans to exceed the Total Canadian Revolving Credit Commitment, TD Canada shall, immediately on the effective date of such continuation, repay (a "Rate Adjustment Payment") the portion of such converted Loan (applying the new Advance Date Exchange Rate) necessary to ensure that the total Dollar Value of the outstanding Canadian Loans does not exceed the Total Canadian Revolving Credit Commitment, provided further that TD Canada shall not be required to pay any additional compensation pursuant to Section 4.04 with respect to a prepayment of a Canadian Loan required by this sentence if such prepayment is made immediately on the effective date of the continuation giving rise to such prepayment. For the purposes of determining the maximum amount of the outstanding Canadian Loans that may exist hereunder, it is intended by the parties that all Loans shall be the functional equivalent of Loans made and repaid (based on the applicable Advance Date Exchange Rate for each Canadian Advance) in Dollars. It is recognized that Canadian Facilities Lenders may elect to record Canadian Loans or Canadian Advances in Alternative Currencies. The Canadian Agent shall maintain records sufficient to identify at any time, (i) the Advance Date Exchange Rate with respect to each Canadian Advance, and (ii) the portion of the total outstanding Canadian Loans attributable to each Canadian Advance. Total Canadian Utilization by TD Canada shall be permitted to exceed the Total Canadian Revolving Credit Commitment by up to 5% by reason of changes in the Spot Rate of Exchange, calculated by CIBC on a daily basis, however, should the Total Canadian Utilization by TD Canada exceed the Total Canadian Revolving Credit Commitment by an amount equal to or greater than 5% then TD Canada shall either (i) reduce the 64 Canadian Loans upon the next maturity, continuance or conversion of a Canadian Acceptance or Eurodollar Rate Loan or maturity of a Canadian Letter of Credit and provide to the Canadian Agent funds in Dollars equal to the amount in excess of the Total Canadian Revolving Credit Commitment, which Funds will be held by the Canadian Agent as security for such excess or (ii) repay Canadian Loans immediately such that, as a result of such repayment, the Total Canadian Revolving Credit Commitment shall equal or exceed the Total Canadian Utilization. (ii) The aggregate unpaid amount (including with respect to Loans of the Alternative Currency the total Dollar Value) of the Canadian Loans plus Canadian Letter of Credit Outstandings and Canadian Acceptance Usage shall not exceed at any time an amount equal to the Total Canadian Revolving Credit Commitment. Each Loan and each conversion under Section 3.01 shall be (A) in the case of Eurodollar Loans, in an amount not less than $1,000,000 and in integral multiples of $500,000 (or the equivalent thereof in the Alternative Currency), and (B) in the case of Canadian Prime Rate Loan or Domestic Base Rate Loan in an amount not less than $500,000, and, if greater, an integral multiple of $100,000 (or the equivalent thereof in the Alternative Currency). (iii) An Authorized Representative of TD Canada shall give the Canadian Agent at least (A) three (3) Business Days irrevocable telecopy or telex notice of each Eurodollar Rate Loan (whether representing an additional borrowing hereunder or the conversion of borrowing hereunder) or each Canadian Acceptance which the Borrower wants to be accepted prior to 10:30 A.M., Toronto, Canada time and, (B) irrevocable telephonic or telefacsimile notice of each Canadian Acceptance, Canadian Prime Rate Loan or Domestic Base Rate Loan representing a borrowing or conversion hereunder prior to 10:30 A.M. Toronto, Canada time on the day before such proposed Canadian Prime Rate Loan or Domestic Base Rate Loan. Each such Borrowing Notice, which shall be effective upon receipt by the Canadian Agent, shall specify the type of Canadian Loan (Eurodollar Rate, Canadian Prime Rate, Canadian Acceptance or Domestic Base Rate), whether Dollar or the Alternative Currency, the amount of the Canadian Loan for which the Canadian Advance is to be made, the date of borrowing and where applicable the Interest Period to be used in the computation of interest. The Authorized Representative shall provide the Canadian Agent written confirmation of each such telephonic notice on the same day by telefacsimile transmission in the form of a Borrowing Notice in the form attached hereto as Exhibit D-2, in each case with appropriate insertions, but failure to provide such confirmation shall not affect the validity of such telephonic notice. The duration of the initial Interest Period for each Canadian Loan shall be as specified in the initial Borrowing Notice. TD Canada shall have the option to elect the duration of subsequent Interest Periods and to convert the Loans in accordance with Section 3.08 hereof. If the Canadian Agent does not receive a notice of election of duration of an Interest Period or to convert by the time prescribed hereby and in accordance with 65 Section 3.08 hereof, TD Canada shall be deemed to have elected a Domestic Base Rate Loan in the case of Eurodollar Rate Loans or Canadian Prime Rate Loans for Canadian Acceptances. (iv) Notice of receipt of each Borrowing Notice shall be provided by the Canadian Agent to each Canadian Facilities Lender by telecopy or telex with reasonable promptness, but not later than 12:00 noon, Toronto, Canada time on the same day as the Canadian Agent's receipt of such notice from TD Canada prior to 10:30 A.M., Toronto, Canada time. At approximately 10:00 A.M. Toronto, Ontario time two (2) Business Days preceding the date specified for an Advance of the Alternative Currency, the Canadian Agent shall determine the Advance Date Exchange Rate and the Applicable Rate. Not later than 11:00 A.M. Toronto, Canada time on the date specified for each Advance of the Alternative Currency, the Agent shall provide TD Canada and each Canadian Facilities Lender notice by telefacsimile transmission of the Advance Date Exchange Rate applicable to such Canadian Advance, and the Alternative Currency Equivalent Amount of the Canadian Loan or Loans required to be made by each Canadian Facilities Lender on such date, and the Dollar Value of such Loan or Loans and the Applicable Rate. (v) In the case of Canadian Advances in Dollars, each Canadian Facilities Lender shall, pursuant to the terms and conditions of this Agreement, not later than 12:00 noon, Toronto, Canada time on the date specified for such Advance, make the amount of the Canadian Advance to be made by it on such day available to the Canadian Agent by depositing or transferring the proceeds thereof in immediately available funds to the Canadian Agent, at its Funding Bank. The amount so received by the Canadian Agent shall, subject to the terms of this Agreement, be made available to TD Canada by deposit of the proceeds to an account of TD Canada maintained at such Funding Bank or otherwise as shall be directed in the applicable Borrowing Notice. (vi) In the case of Canadian Advances of the Alternative Currency, not later than 11:00 A.M., Toronto, Canada time on the date specified for each Advance, each Canadian Facilities Lender shall, pursuant to the terms and subject to the conditions of this Agreement, make the amount of the Canadian Loan or Loans to be made by it on such day available to TD Canada at the Canadian Agent, to the account of the Canadian Agent. The amount so received by the Canadian Agent shall, subject to the terms and conditions of the Loan Documents on the same day but no later than 12:00 noon Toronto, Canada time, be made available to TD Canada by delivery of the Alternative Currency Equivalent Amount to TD Canada's account with the Canadian Agent. (vii) Notwithstanding the foregoing, if a drawing is made under any Canadian Letter of Credit prior to the Revolving Credit Termination Date and TD Canada shall not immediately reimburse CIBC for the amount of such draw or payment, then notice of such drawing or payment shall be provided promptly by CIBC to the Canadian Agent 66 and the Canadian Agent shall provide notice to each Canadian Facilities Lender by telephone or telefacsimile. If notice to the Canadian Facilities Lenders of a drawing under any Letter of Credit is given by the Canadian Agent at or before 12:00 noon Toronto, Canada time on any Business Day, such drawing shall be converted to Dollars at the Spot Rate of Exchange on the date of drawing under the Canadian Letter of Credit, TD Canada shall be deemed to have requested, and each Canadian Facilities Lender shall, pursuant to the conditions of this Agreement, make a Domestic Base Rate Loan under the Canadian Revolving Credit Facility in the amount of such Canadian Facilities Lender's Applicable Commitment Percentage of such drawing or payment (and in the case of a drawing in the Alternative Currency, a Canadian Prime Rate Loan in an amount equal to such Canadian Facilities Lender's Applicable Commitment Percentage of the Dollar Equivalent Amount of such drawing or payment determined on the basis of the Spot Rate of Exchange on the date of drawing under the Canadian Letter of Credit) and shall pay such amount to the Canadian Agent for the account of CIBC at the Lending Office in Dollars and in immediately available funds before 2:30 P.M. Toronto, Canada time on the same Business Day. If notice to the Canadian Facilities Lenders is given by the Canadian Agent after 12:00 noon Toronto, Canada time on any Business Day, such drawing shall be converted to Dollars at the Spot Rate of Exchange on the date of drawing under the Canadian Letter of Credit, TD Canada shall be deemed to have requested, and each Canadian Facilities Lender shall, pursuant to the terms and subject to the conditions of this Agreement, make a Canadian Prime Rate Loan under the Canadian Revolving Credit Facility in the amount of such Canadian Facilities Lender's Applicable Commitment Percentage of such drawing or payment and shall pay such amount to the Canadian Agent for the account of CIBC at the Principal Office in Dollars and in immediately available funds before 12:00 noon Toronto, Canada time on the next following Business Day. Such Domestic Base Rate Loan shall continue unless and until TD Canada converts such Domestic Base Rate Loan in accordance with the terms of Section 3.08 hereof. 3.02 Payment of Interest. (a) TD Canada shall pay interest to the Canadian Agent for the account of each Canadian Facilities Lender on the outstanding and unpaid principal amount of each Canadian Loan made by such Canadian Facilities Lender for the period commencing on the date of such Canadian Facilities Loan until such Canadian Loan shall be due at the then applicable Domestic Base Rate for Domestic Base Rate Loans, the Canadian Prime Rate for Canadian Prime Rate Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, such payments to be made in Dollars or at the Applicable Rate in the case of Canadian Loans made in the Alternative Currency, such payments to be made in the Alternative Currency as designated by the Authorized Representative pursuant to Section 3.01 hereof or as otherwise provided herein; provided, however, that if any amount shall not be paid when due (at maturity, by acceleration or otherwise), all amounts outstanding hereunder shall bear interest thereafter (i) in the case of a 67 Eurodollar Rate Loan, until the end of the Interest Period with respect to such Eurodollar Rate Loan, at a rate of two percent (2%) above such Eurodollar Rate and (ii) thereafter, and with respect to Domestic Base Rate Loans or Canadian Prime Rate Loans, at a rate of interest per annum which shall be two percent (2%) above the Domestic Base Rate or Canadian Prime Rate, as the case may be, or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. The Canadian Agent's certificate as to each rate of interest payable hereunder shall be prima facie evidence of such rate. (b) Computation of Interest. TD Canada shall pay to the Canadian Agent for the benefit of the Canadian Facilities Lenders interest on each Canadian Loan, which interest shall be calculated on the outstanding principal amount daily for the period: (i) in the case of a Canadian Prime Rate Loan or a Domestic Base Rate Loan, commencing on and including the day on which it is advanced and ending on, but excluding, the day on which it is repaid; or (ii) in the case of a Eurodollar Rate Loan, commencing on and including the first day of the Interest Period relative to such Eurodollar Rate Loan and ending on, but excluding, the last day of such Interest Period, at the rate of interest per annum equal to, in the case of: (i) the Canadian Prime Rate for Canadian Prime Rate Loans, on the basis of a year of 365 days; (ii) the Domestic Base Rate for Domestic Base Rate Loans, on the basis of a year of 365 days; (iii) the Eurodollar Rate for Eurodollar Rate Loans, on the basis of a year of 360 days. For the purposes of this Agreement, whenever interest is calculated on the basis of a year of 360 or 365 days, each rate of interest determined pursuant to such calculation expressed as an annual rate for the purposes of the Interest Act (Canada) is equivalent to such rate as so determined multiplied by the number of days in the calendar year in which the same is to be ascertained and divided by 360 or 365, as appropriate. The parties further agree that for the purposes of the Interest Act (Canada), (i) the principle of deemed reinvestment of interest shall not apply to any interest calculation under this Agreement, and (ii) the rates of interest stipulated in this Agreement are intended to be nominal rates and not effective rates or yields. 68 Interest on each Canadian Loan shall be paid on the last day of the applicable Interest Period for each Eurodollar Rate Loan and, if the Interest Period extends for more than three months, at intervals of three months after the first day of the Interest Period and on the Revolving Credit Termination Date. (c) Accrual and Payment of Interest. Interest on each Canadian Loan shall accrue from day to day but shall not compound and shall be payable: (i) in the case of a Canadian Prime Rate Loan, Domestic Base Rate Loan or any other amount payable hereunder other than in respect of a Eurodollar Rate Loan, monthly in arrears on the first Banking Day of each month; or (ii) in the case of a Eurodollar Rate Loan, as set forth in Section 3.02(b). 3.03 Payment of Principal. (a) The principal amount of each Canadian Loan shall be due and payable to the Agent for the benefit of each Canadian Facilities Lenders in full on the Revolving Credit Termination Date. The duration of the initial Interest Period for each Canadian Loan that is a Eurodollar Rate Loan or Canadian Acceptance shall be as specified in the initial Borrowing Notice. TD Canada shall have the option to elect the duration of subsequent Interest Periods and to convert the Loans in accordance with Section 3.08 hereof. If the Canadian Agent does not receive a notice of election of duration of an Interest Period or to convert by the time prescribed by Section 3.08 hereof, TD Canada shall be deemed to have elected to convert such Canadian Loan to (or continue such Canadian Loan as) a Canadian Prime Rate Loan or Domestic Base Rate Loan, as applicable, until TD Canada notifies the Agent in accordance with Section 3.08. (b) Each payment of principal (including any prepayment) shall be made to the Canadian Agent at its Lending Office, for the account of each Canadian Facilities Lender's applicable Lending Office, to be recorded in Dollars as set forth in Section 3.01(b). The principal amount attributable to each specified Advance of the Alternative Currency (or the continuation or conversion thereof) (as determined from the Canadian Agent's records) shall be repaid in the Alternative Currency. Each such payment shall be made in immediately available funds before 12:30 P.M. Toronto, Canada time on the date such payment is due. The Canadian Agent may, but shall not be obligated to, debit the amount of any such payment which is not made by such time to any ordinary deposit account, if any, of TD Canada with the Canadian Agent. TD Canada shall give the Canadian Agent prior telephonic notice of any payment of principal, such notice to be given by not later than 11:00 A.M. Toronto, Canada time, prior to the date of such payment. Each repayment shall be effected in the currency of the outstanding Advance. 69 (c) The Canadian Agent shall deem any payment by or on behalf of TD Canada hereunder that is not made both (a) in Dollars in the case of Eurodollar Rate Loans made in Dollars or Domestic Base Rate Loans and the Alternative Currency in the case of Canadian Loans in the Alternative Currency and in immediately available funds and (b) prior to 12:30 P.M. Toronto, Canada time to be a non-conforming payment. Any such payment shall not be deemed to be received by the Canadian Agent until the time such funds become available funds. The Canadian Agent shall give prompt telephonic notice to the applicable Authorized Representative and each of the Canadian Facilities Lenders (confirmed in writing) if any payment is non-conforming. Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding Business Day) at a rate of interest per annum which shall be two percent (2%) above the Canadian Prime Rate or Domestic Base Rate, as the case may be, or the maximum rate permitted by applicable law, whichever is lower, from the date such amount was due and payable until the date such amount is paid in full. (d) In the event that any payment hereunder or under the Canadian Loans which bear interest at the Domestic Base Rate or Canadian Prime Rate becomes due and payable on a day other than a Business Day, then such due date shall be extended to the next succeeding Business Day; provided that interest shall continue to accrue during the period of any such extension. 3.04 Evidence of Indebtedness. TD Canada hereby authorizes each Canadian Facilities Lender and the Canadian Agent to record, from time to time, in its records, the date and amount of each Canadian Loan; the interest rates payable by TD Canada in respect of each Canadian Loan and any Interest Period applicable thereto; the Canadian Acceptances issued in respect of any Canadian Loan; the dates and amounts of all payments received by such Canadian Facilities Lender on account of principal, interest and fees; and the amount of all the Canadian Loans which remain payable by TD Canada to such Canadian Facilities Lender. All amounts and other information so recorded shall be prima facie evidence thereof. The failure to record, or any error in recording, any such amount or other information shall not limit or impair the obligations of TD Canada hereunder or under any Loan Document. 3.05 Pro Rata Payments. Except as otherwise provided herein, (a) each payment on account of the principal of and interest on the Loans and the fees described in Section 3.09 hereof shall be made to the Canadian Agent for the account of the Canadian Facilities Lenders pro rata based on their Applicable Commitment Percentages, (b) all payments to be made by TD Canada for the account of each of the Canadian Facilities Lenders on account of principal, interest and fees, shall be made without set-off or counterclaim, and (c) the Canadian Agent in all other cases will promptly distribute payments received to the Canadian Facilities Lenders. 70 Notwithstanding the foregoing, in the event any Canadian Facilities Lender shall not be able to make a Eurodollar Rate Loan as provided in Section 3.01, interest shall be allocated to such Canadian Facilities Lender according to the interest rate payable to such Canadian Facilities Lender as set forth in Section 4.05. 3.06 Reductions. TD Canada shall, by notice from an Authorized Representative, have the right from time to time (but not more frequently than once during each fiscal quarter), upon not less than ten (10) Business Days written notice to the Canadian Agent to reduce the Total Canadian Revolving Credit Commitment. The Canadian Agent shall give each Canadian Facilities Lender, within one (1) Business Day, telephonic notice (confirmed in writing) of such reduction. Each such reduction shall be in the aggregate amount of $5,000,000 or such greater amount which is in an integral multiple of $1,000,000, and shall permanently reduce the Total Canadian Revolving Credit Commitment of the Canadian Facilities Lenders pro rata. No such reduction shall result in the payment of any Eurodollar Rate Loan other than on the last day of the Interest Period of such Canadian Loan unless such prepayment is accompanied by amounts due, if any, under Section 4.04. Each reduction of the Total Canadian Revolving Credit Commitment shall be accompanied by payment of the Canadian Facilities Notes to the extent that the Total Canadian Utilization exceeds the Total Canadian Revolving Credit Commitment, after giving effect to such reduction, together with accrued and unpaid interest on the amounts prepaid. 3.07 Increase and Decrease in Amounts. The amount of the Total Canadian Revolving Credit Commitment which shall be available to TD Canada shall be reduced by the aggregate amount of all Canadian Letters of Credit Outstandings and Canadian Acceptance Usage. 3.08 Conversions and Elections of Subsequent Interest Periods. Provided that no Default or Event of Default shall have occurred and be continuing and subject to the limitations set forth below and in Sections 4.01(b), 4.02 and 4.03 hereof, TD Canada may, by delivering the Borrowing Notice set out in Exhibit D-2, request a conversion or continuance provided that: (a) the proceeds are used to retire the Outstanding Loan; (b) the notice identifies the outstanding Loan to be retired (the "Outstanding Loan"); (c) the conversion or continuance would otherwise be a permitted Advance hereunder and TD Canada and TDC comply with each provision hereof relative to the obtaining of an Advance; (d) the aggregate principal amount of the conversion or continuance is not greater than the Outstanding Loan plus 71 accrued interest in the case of Eurodollar Rate Loans rounded up to the nearest $10,000; (e) no conversions shall be made from one currency to another without first satisfying the original Obligation in the currency of their denomination; (f) each conversion or continuance is made contemporaneously with the retirement of the Outstanding Loan. Notice of any such elections or conversions shall specify the effective date of such election or conversion and the Interest Period to be applicable to the Canadian Loan as continued or converted. All such continuations or conversions of Canadian Loans shall be effected pro rata based on the Applicable Commitment Percentages of the Canadian Facilities Lenders in respect of the Total Canadian Revolving Credit Commitment. 3.09 Unusued Fee. For the period beginning on the Closing Date and ending on the Revolving Credit Termination Date (or such earlier date on which the Canadian Revolving Credit Facility has terminated), TD Canada agrees to pay to the Canadian Agent, for the pro rata benefit of the Canadian Facilities Lenders based on their Applicable Commitment Percentages, an unused fee equal to the Applicable Unused Fee times the sum of the daily amount by which the Total Canadian Revolving Credit Commitment exceeds the sum of average daily (i) outstanding Canadian Loans plus (ii) Canadian Letters of Credit plus (iii) Canadian Acceptances. Such payments of fees provided for herein shall be due in arrears on the last Business Day of each January, April, July and October beginning July 31, 1996 to and on the Revolving Credit Termination Date (or such earlier date on which the Revolving Credit Facility has terminated). Notwithstanding the foregoing, so long as any Canadian Facilities Lender fails to make available any portion of its Canadian Revolving Credit Commitment when requested, such Lender shall not be entitled to receive payment of its pro rata share of such fee until such Lender shall make available such portion. Such fee shall be calculated on the basis of a year of 365 days for the actual number of days elapsed. 3.10 Deficiency Advances. No Canadian Facilities Lender shall be responsible for any default of any other Canadian Facilities Lender in respect to such other Canadian Facilities Lender's obligation to make any Canadian Loan hereunder nor shall the Canadian Revolving Credit Commitment of any Canadian Facilities Lender hereunder be increased as a result of such default of any other Canadian Facilities Lender. Without limiting the generality of the foregoing, in the event any Canadian Facilities Lender shall fail to advance funds to TD Canada as herein provided, the Canadian Agent may in its discretion, but shall not be obligated to, advance in its favor as a Canadian Facilities Lender all or any portion of 72 such amount or amounts (each, a "deficiency advance") and shall thereafter be entitled to payments of principal of and interest on such deficiency advance in the same manner and at the same interest rate or rates to which such other Canadian Facilities Lender would have been entitled had it made such advance hereunder; provided that, upon payment to the Canadian Agent from such other Canadian Facilities Lender of the entire outstanding amount of each such deficiency advance, together with accrued and unpaid interest thereon, from the most recent date or dates interest was paid to the Canadian Agent by TD Canada on each Canadian Loan comprising the deficiency advance at the interest rate per annum for overnight borrowing by the Canadian Agent, then such payment shall be credited against the applicable Obligation owed to the Canadian Agent in full payment of such deficiency advance and TD Canada shall be deemed to have borrowed the amount of such deficiency advance from such other Canadian Facilities Lender as of the most recent date or dates, as the case may be, upon which any payments of interest were made by TD Canada thereon. 3.11 Use of Proceeds. The proceeds of the Canadian Loans made pursuant to the Canadian Revolving Credit Facility hereunder shall be used by TD Canada to repay existing Indebtedness under the Prior Canadian Facilities Agreement, to support issuance of Canadian Letters of Credit and Canadian Acceptances, to finance Capital Expenditures and Permitted Acquisitions and for other working capital and general corporate needs of TD Canada, to the extent permitted under this Agreement. 3.12 Extension of Revolving Credit Termination Date. At the request of TD Canada the Lenders may, in their sole discretion, elect to extend the Revolving Credit Termination Date for Canadian Facilities then in effect for additional periods of one year. TD Canada shall notify the Lenders of its request for such an extension by delivering to the Agent notice of such request signed by an Authorized Representative not more than one hundred and twenty (120) days nor less than sixty (60) days prior to the second anniversary of the Closing Date. If all the Lenders shall elect to so extend, the Agent shall notify TD Canada in writing within sixty (60) days of its receipt of such request for extension of the decision of the Lenders of whether to extend the Revolving Credit Termination Date for Canadian Facilities. Failure by the Agent to give such notice shall constitute refusal by the Lenders to extend the Revolving Credit Termination Date for the Canadian Facilities. 3.13 Letters of Credit. CIBC agrees, subject to the terms and conditions of this Agreement, to maintain the Existing Canadian Letters of Credit as Canadian Letters of Credit hereunder and, upon request of TD Canada to issue from time to time for the account of the TD Canada Canadian Letters of Credit upon delivery to CIBC of a Letter of Credit Application in form and content acceptable to CIBC; provided, that the Canadian Letter of Credit Outstandings hereunder shall not exceed the Canadian Letter of Credit Commitment. No Canadian Letter of Credit shall be issued by CIBC 73 with an expiry date or payment date occurring subsequent to the thirtieth Business Day preceding the Revolving Credit Termination Date and no Commercial Letter of Credit shall have an expiry date occurring more than six (6) months after the date of its issuance. CIBC shall not be required to issue any Canadian Letter of Credit if the Total Canadian Utilization when added to the face amount of any requested Canadian Letter of Credit exceeds the Total Canadian Revolving Credit Commitment. 3.14 Acceptances (a) Creation of Canadian Acceptances. Upon receipt of a Borrowing Notice given in accordance with this Agreement and subject to the provisions of this Agreement, each Canadian Facilities Lender severally agrees to accept from time to time such Canadian Dollar bills of exchange as TD Canada shall request within the scope of the Total Canadian Revolving Credit Commitment, provided that: (i) Canadian Acceptances shall be issued on a Business Day specified in the Borrowing Notice; (ii) each Canadian Acceptance shall have a term from 30 to 180 days (excluding days of grace), as designated by TD Canada in the relevant Borrowing Notice, provided that each Canadian Acceptance shall mature on a Business Day and TD Canada shall choose Canadian Acceptances of such duration so as to ensure that TD Canada complies in all respects with its reduction or repayment obligations under this Agreement; and (iii) each Canadian Acceptance shall be in a form acceptable to the Canadian Facilities Lenders acting reasonably. The obligation of the Canadian Facilities Lenders to accept bills of exchange shall be several and not joint, and the failure of any Canadian Facilities Lender to accept any bills of exchange shall not relieve any other Canadian Facilities Lender of its obligation to accept bills of exchange in accordance with the terms hereof, and no Canadian Facilities Lender shall be responsible for the failure by any other Canadian Facilities Lender to accept bills of exchange to be accepted by such other Canadian Facilities Lender. (b) Notice by Canadian Agent to Canadian Facilities Lenders. The Canadian Agent shall give prompt written notice to the Canadian Facilities Lenders of each Borrowing Notice requesting the issue of Canadian Acceptances and shall notify each Canadian Facilities Lender of the face amount at maturity of each bill of exchange to be accepted by such Canadian Facilities Lender based upon such Canadian Facilities Lender's pro rata share based on their Applicable Commitment Percentage of the face amount of Canadian Acceptances specified in the Borrowing Notice, except that, if the face amount of a Canadian Acceptance would not be Cdn $100,000 or 74 a whole multiple thereof, the face amount may be increased or reduced by the Canadian Facilities Lender in its sole discretion without thereby increasing or reducing the aggregate face amount at maturity of the Canadian Acceptances to be accepted by the Canadian Facilities Lenders as specified in the Borrowing Notice. (c) Stamping Fees. Upon tendering any bill of exchange for acceptance by a Canadian Facilities Lender pursuant to the Canadian Revolving Credit Facility, TD Canada shall pay to such Canadian Facilities Lender, a fee equal to the Credit Margin then in effect relating to Canadian Acceptances to be accepted pursuant to the Canadian Revolving Credit Facility, based on the principal amount of such bill of exchange for the duration of its stated term calculated on the basis of the actual number of days in the stated term, commencing on, and including, the date such Canadian Facilities Lender accepts the bill of exchange and ending on, but excluding, its stated payment date. (d) Pre-Signed Acceptances. TD Canada shall deliver to the Canadian Facilities Lenders sufficient pre-signed bills of exchange, in form acceptable to the Canadian Facilities Lenders or such other instrument as may reasonably be required by a Canadian Facilities Lender and acceptable to TD Canada, to enable the Canadian Facilities Lenders to meet requests by TD Canada for Canadian Advances by way of Canadian Acceptances from time to time. The Canadian Facilities Lenders shall not be responsible or liable for their failure to accept a Canadian Acceptance as required hereunder if the cause of such failure is, in whole or in part, due to the failure of TD Canada to provide duly executed and endorsed drafts to the Canadian Facilities Lenders on a timely basis nor shall the Canadian Facilities Lenders be liable for any damage, loss or other claim arising by reason of any loss or improper use of any such instrument except the negligence or willful misconduct of the Canadian Facilities Lenders or their employees. Each of the Canadian Facilities Lenders shall maintain a record with respect to Canadian Acceptances (i) received by it from TD Canada in blank hereunder, (ii) voided by it for any reason, (iii) accepted by it hereunder, and (iv) cancelled at their respective maturities. The Canadian Facilities Lenders further agree to retain such records in the manner and for the statutory periods provided in the various provincial or federal statutes and regulations which apply to the Canadian Facilities Lenders. Such pre-signed bills of exchange shall be blank as to date of issue, date of maturity and amount. With respect to the safekeeping of pre-signed bills of exchange delivered to the Canadian Facilities Lenders by TD Canada, the Canadian Facilities Lenders shall be obligated to exercise only the same degree of care as if such Canadian Acceptances were the property of the Canadian Facilities Lenders and the Canadian Facilities Lenders were keeping them at the place at which they are held. The Canadian Facilities Lenders may complete and accept pre-signed bills of exchange from time to time in accordance with the instructions of TD Canada, provided that the Canadian Facilities Lenders shall not incur any liability whatsoever in respect of 75 instructions carried out by them in the belief that such instructions were properly given by TD Canada. (e) Execution of Acceptances. Bills of exchange of TD Canada to be accepted as Canadian Acceptances hereunder shall be signed by an Authorized Representative of TD Canada. Notwithstanding that any person whose signature appears on any Canadian Acceptance as one of such officers may no longer be an authorized signatory for TD Canada at the date of issuance of a Canadian Acceptance, such signature shall nevertheless be valid and sufficient for all purposes as if such authority had remained in force at the time of such issuance and any such Canadian Acceptance so signed shall be binding on TD Canada. (f) Payment of Discount Proceeds. On the date set forth in Section 3.01, each Canadian Facilities Lender will pay to TD Canada the Acceptance Discount Proceeds relating to the Canadian Acceptances accepted by it. The Canadian Facilities Lenders may at any time and from time to time hold, sell, rediscount or otherwise dispose of any or all Canadian Acceptances purchased by them. (g) Discharge of Acceptances. TD Canada agrees that on each date on which a Canadian Acceptance matures (in this Section, a "maturity date"), unless TD Canada is entitled to a Canadian Advance under Section 3.01 or TD Canada has requested and is entitled to a conversion in the amount of the maturing Canadian Acceptance TD Canada will provide the Canadian Agent for the benefit of the Canadian Facilities Lenders before 10:00 a.m. (Toronto Time) with immediately available funds (in this Section, the "discharge funds") to discharge in full the liabilities of the Canadian Facilities Lenders in respect of such Canadian Acceptance. TD Canada shall not claim any days of grace for the payment of maturity of any Canadian Acceptance. If TD Canada does not in fact provide the Canadian Agent with the discharge funds and is not entitled to an Advance or a conversion in the amount of the maturing Canadian Acceptance, the Canadian Facilities Lenders may (but shall not be obliged to) make a Canadian Loan to TD Canada, which Canadian Loan TD Canada hereby requests the Canadian Facilities Lenders to make and which, if made, shall be made on a demand basis and shall bear interest at the Canadian Prime Rate as varied from time to time plus 2% per annum. To the extent not inconsistent with the demand nature of this loan, the terms and conditions of this Agreement pertinent to a Canadian Prime Rate Loan outstanding under the Canadian Revolving Credit Facilities shall apply to such demand loan. This provision applies whether or not a Canadian Facilities Lender is the holder of the maturing Canadian Acceptance. (h) Acceptances Outstanding Upon Default. If any Canadian Acceptance is outstanding upon the occurrence of an Event of Default, TD Canada shall forthwith upon demand by the Canadian 76 Agent pay to the Canadian Agent for the benefit of the Canadian Facilities Lenders an amount equal to the principal amount of all such Canadian Acceptances such amount to be held by the Canadian Agent for application against the Indebtedness owing by TD Canada to the Canadian Facilities Lenders in respect of such Canadian Acceptances or in respect of any other amount payable under the Canadian Loan Documents. (i) Obligations Unconditional. The obligations of TD Canada with respect to Canadian Acceptances under this Section 3.14 shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances: (i) any lack of validity or enforceability of any bill of exchange accepted by the Canadian Facilities Lenders as a Canadian Acceptance; and (ii) the existence of any claim, set off, defense or other right which TD Canada may have at any time against the holder of a Canadian Acceptance, or any other Person, whether in connection with this Agreement or otherwise. (j) Non-Acceptance Lenders. Notwithstanding any provision of this Section 3.14 to the contrary, if a Canadian Facilities Lender is a Non-Acceptance Lender and if TD Canada wishes to obtain an Advance by way of Canadian Acceptances, such Canadian Facilities Lender shall, in lieu of accepting Canadian Acceptances, pay to TD Canada on the date in Section 3.01 and on the terms and conditions of this Agreement the same amount of money in Canadian Dollars that it would have paid to TD Canada pursuant to Section 3.14(f) hereof if it had been a Canadian Facilities Lender that is not a Schedule I chartered bank, and such Canadian Non-Acceptance Lender shall be entitled to a stamping fee in respect thereof equal to the amount and at the same time that it would be entitled to receive if it was a Canadian Acceptance Lender. Upon such payment being made to TD Canada by such Canadian Non-Acceptance Lender, it shall for all purposes be deemed to have accepted a Canadian Acceptance hereunder. 3.15 Reimbursement (a) TD Canada hereby unconditionally agrees immediately to pay to CIBC on demand at its Lending Office all amounts required to pay all drafts drawn or purporting to be drawn under the Canadian Letters of Credit and any and all expenses of every kind incurred by CIBC in connection with the Canadian Letters of Credit and in any event and without demand to place in the possession of CIBC (which shall include Canadian Advances under the Canadian Revolving Credit Facility if permitted by Section 3.01(b)(vii) hereof) sufficient funds to pay all debts and liabilities arising under any Canadian Letter of Credit. TD Canada's obligations to 77 pay CIBC under this Section 3.15, and the right of CIBC to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever. CIBC may charge any account TD Canada may have with CIBC for any and all amounts CIBC pays under a Canadian Letter of Credit; provided that to the extent permitted by Section 3.01(b)(vii), amounts shall be paid pursuant to Canadian Advances under the Canadian Revolving Credit Facility. TD Canada agrees that CIBC may, in its sole discretion, accept or pay, as complying with the terms of any Canadian Letter of Credit, any drafts or other documents otherwise in order which may be signed or issued by an administrator, executor, trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, liquidator, receiver, attorney in fact or other legal representative of a party who is authorized under such Canadian Letter of Credit to draw or issue any drafts or other documents. TD Canada agrees to pay CIBC interest on any amounts not paid when due hereunder at the Canadian Prime Rate plus two percent (2%), or such lower rate as may be required by law. (b) In accordance with the provisions of Section 3.01(b)(vii) hereof, CIBC shall notify the Canadian Agent (and shall also notify TD Canada) of any drawing under any Canadian Letter of Credit issued for the account of TD Canada as promptly as practicable following the receipt by CIBC of such drawing. (c) Each Canadian Facilities Lender (other than CIBC) shall automatically acquire on the date of issuance thereof, a Participation in the liability of CIBC in respect of each Canadian Letter of Credit in an amount equal to such Canadian Facilities Lender's Applicable Commitment Percentage of such liability, and to the extent that TD Canada is obligated to pay CIBC under Section 3.16(a), each Canadian Facilities Lender (other than CIBC) thereby shall absolutely, unconditionally and irrevocably assume, and shall be unconditionally obligated to pay to CIBC as hereinafter described, its Applicable Commitment Percentage (determined in respect of the Total Canadian Revolving Credit Commitment) of the liability of CIBC under such Canadian Letter of Credit. Prior to the Revolving Credit Termination Date, each Canadian Facilities Lender (including CIBC in its capacity as a Canadian Facilities Lender) shall, subject to the terms and conditions of this Article III, make a Canadian Prime Rate Loan to TD Canada by paying to the Canadian Agent for the account of CIBC at the Lending Office in Dollars and in immediately available funds, an amount equal to its Applicable Commitment Percentage (determined in respect of the Total Canadian Revolving Credit Commitment) of any drawing under a Canadian Letter of Credit, all as described and pursuant to Section 3.01(b)(vii). With respect to drawings under any of the Canadian Letters of Credit, each Canadian Facilities Lender, upon receipt from the Canadian Agent of notice of a drawing in the manner described in Section 3.01(b)(vii), shall promptly pay to the Canadian Agent for the account of CIBC, prior to the applicable time set forth in Section 3.01(b)(vii), its Applicable Commitment Percentage (determined in respect of the Total Canadian Revolving 78 Credit Commitment) of such drawing or payment. Simultaneously with the making of each such payment by a Canadian Facilities Lender to CIBC, such Canadian Facilities Lender shall, automatically and without any further action on the part of CIBC or such Canadian Facilities Lender, acquire a Participation in an amount equal to such payment (excluding the portion thereof constituting interest accruing before such Canadian Facilities Lender made such payment) in the related Reimbursement Obligation of TD Canada. The Reimbursement Obligations of TD Canada shall be immediately due and payable whether by Canadian Advances made in accordance with Section 3.01(b)(vii) or otherwise. Each Canadian Facilities Lender's obligation to make payment to the Canadian Agent for the account of CIBC pursuant to this Section 3.16(c), and the right of CIBC to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and shall be made without any offset, abatement, withholding or reduction whatsoever. If any Canadian Facilities Lender is obligated to pay but does not pay amounts to the Canadian Agent for the account of CIBC in full upon such request as required by this Section 3.16(c), such Canadian Facilities Lender shall, on demand, pay to the Canadian Agent for the account of CIBC interest on the unpaid amount for each day during the period commencing on the date of notice given to such Canadian Facilities Lender pursuant to Section 3.01(b)(vii) until such Canadian Facilities Lender pays such amount to the Agent for the account of CIBC in full at the interest rate per annum for overnight borrowing by CIBC. (d) Promptly following the (i) issuance of each Canadian Letter of Credit and the creation of a Canadian Acceptance, CIBC shall give the Canadian Agent written notice of the terms and conditions thereof and (ii) end of each calendar month, CIBC shall deliver to the Canadian Agent and the Agent, and the Canadian Agent shall deliver to each Canadian Facilities Lender, a notice describing the aggregate undrawn amount of all Canadian Letters of Credit accepted and outstanding at the end of such month. Upon the request of any Canadian Facilities Lender from time to time, CIBC shall deliver to the Canadian Agent, and the Canadian Agent shall deliver to such Canadian Facilities Lender, any other information reasonably requested by such Canadian Facilities Lender with respect to each Canadian Letter of Credit then outstanding. (e) The issuance by CIBC of each Canadian Letter of Credit and a Canadian Acceptance shall, in addition to the conditions precedent set forth in Section 5.01 hereof, be subject to the conditions that such Canadian Letter of Credit and Canadian Acceptance be in such form, contain such terms and support such transactions or obligations as shall be reasonably satisfactory to CIBC consistent with the then current practices and procedures of CIBC with respect to similar letters of credit and acceptances. All Canadian Letters of Credit shall be issued pursuant to and subject to the Uniform Customs and Practice for Documentary Credits, 1993 revision, International Chamber of Commerce Publication No. 500 and all subsequent amendments and revisions 79 thereto. TD Canada shall have executed and delivered such other instruments and agreements relating to such Canadian Letter of Credit and Canadian Acceptance as CIBC shall have reasonably requested consistent with such practices and procedures. (f) Without duplication of Section 11.07 hereof, TD Canada hereby indemnifies and holds harmless CIBC, each other Canadian Facilities Lender and the Canadian Agent from and against any and all claims and damages, losses, liabilities, costs or expenses which CIBC, such other Canadian Facilities Lender or the Canadian Agent may incur (or which may be claimed against CIBC, such other Canadian Facilities Lender or the Canadian Agent) by any Person by reason of or in connection with the issuance or transfer of or payment or failure to pay under any Canadian Letter of Credit or Canadian Acceptance; provided that TD Canada shall not be required to indemnify CIBC, any other Canadian Facilities Lender or the Canadian Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, (i) caused by the willful misconduct or gross negligence of the party to be indemnified, (ii) caused by the failure of CIBC to pay under any Canadian Letter of Credit or Canadian Acceptance after the presentation to it of a request strictly complying with the terms and conditions of such Canadian Letter of Credit or Canadian Acceptance, unless such payment is prohibited by any law, regulation, court order or decree, or (iii) paid or payable by any Canadian Facilities Lender under Sections 3.10 or 11.10 hereof. (g) Without limiting TD Canada's rights as set forth in Section 3.15(f) above, the obligation of TD Canada to immediately reimburse the Canadian Agent or the Canadian Lenders for drawings made under Canadian Letters of Credit or payment of Canadian Acceptances shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement and such Canadian Letters of Credit or Canadian Acceptances, under all circumstances whatsoever, including, without limitation, the following circumstances: (i) any lack of validity or enforceability of the Canadian Letter of Credit or Canadian Acceptance, the obligation supported by the Canadian Letter of Credit or Canadian Acceptance or any other agreement or instrument relating thereto (collectively, the "Canadian Related Documents"); (ii) any amendment or waiver of or any consent to or departure from all or any of the Canadian Related Documents; (iii) the existence of any claim, setoff, defense or other rights which TD Canada may have at any time against any beneficiary or any transferee of a Canadian Letter of Credit or Canadian Acceptance (or any persons or entities for whom any such beneficiary or any such transferee may be acting), the Canadian Agent, Canadian Facilities Lenders or any other person or entity, 80 whether in connection with the Loan Documents, the Canadian Related Documents or any unrelated transaction; (iv) any breach of contract or other dispute between TD Canada and any beneficiary or any transferee of a Canadian Letter of Credit or Canadian Acceptance (or any persons or entities for whom such beneficiary or any such transferee may be acting), the Canadian Agent, Canadian Facilities Lenders or any other person or entity; (v) any draft, statement or any other document presented under the Canadian Letter of Credit or Canadian Acceptance proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; (vi) any delay, extension of time, renewal, compromise or other indulgence or modification granted or agreed to by Agent, with or without notice to or approval by TD Canada in respect of any of TD Canada's indebtedness under this Agreement; or (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; provided, however, that nothing contained herein shall be deemed to release CIBC or any other Canadian Facilities Lender of any liability for actual loss arising as a result of its or their gross negligence or willful misconduct. 3.16 Canadian Letter of Credit Fee. (a) For the period beginning on the Closing Date and ending on the Revolving Credit Termination Date, TD Canada agree to pay to the Canadian Agent, for the pro rata benefit of the Canadian Facilities Lenders based on their Applicable Commitment Percentages (determined in respect of the Total Canadian Revolving Credit Commitment), a fee for such period at a per annum rate equal to the Applicable Interest Addition for Eurodollar Loans on the daily aggregate amount available to be drawn under Canadian Standby Letters of Credit and fees for such period at those rates established from time to time by the Canadian Agent and acceptable to Lenders for Canadian Commercial Letters of Credit. (b) For the period beginning on the Closing Date and ending on the Revolving Credit Termination Date, TD Canada agrees to pay to the Canadian Agent for the account of CIBC as issuer of the Canadian Letter of Credit, a fee for such period at a per annum rate equal to .125% on the daily aggregate amount available to be drawn under Canadian Letters of Credit. (c) Such payments of fees provided for in this Section 3.16 shall be due in arrears, the first such payment to be made on the last Business Day of July 31, 1996 and on the last Business Day of each October, January, April and July thereafter. 81 3.17 Administrative Fees and Reserves. TD Canada shall pay to CIBC administrative and other fees, if any, in connection with the Canadian Letters of Credit in such amounts and at such times as CIBC and TD Canada shall agree from time to time. In addition, TD Canada shall reimburse CIBC for all costs or reduction in yield occurring by reason of the issuance by CIBC of the Canadian Letters of Credit. 3.18 Maximum Rate of Return. Notwithstanding any provision to the contrary contained in this Agreement, in no event shall the aggregate "interest" (as defined in Section 347 of the Criminal Code, Revised Statutes of Canada, 1985, C. 46 as the same may be amended, replaced or re-enacted from time to time) payable under this Agreement exceed the effective annual rate of interest on the "credit advanced" (as defined in that section) under this Agreement lawfully permitted under that section and, if any payment, collection or demand pursuant to this Agreement in respect of "interest" (as defined in that section) is determined to be contrary to the provisions of that section, such payment, collection or demand shall be deemed to have been made by mutual mistake of TD Canada and the Canadian Facilities Lenders and the amount of such payment or collection shall be refunded to TD Canada; for purposes of this Agreement the effective annual rate of interest shall be determined in accordance with generally accepted actuarial practices and principles over the term of the applicable Credit on the basis of annual compounding of the lawfully permitted rate of interest and, in the event of dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by the Canadian Agent will be conclusive for the purposes of such determination. 3.19 Reset of Canadian Lenders, Portion on Default Upon an Event of Default occurring hereunder, the Canadian Agent shall determine the amount of outstanding Obligations of each of the Canadian Facilities Lenders under the Canadian Facilities based on Applicable Commitment Percentages (determined in respect of the Total Canadian Revolving Credit Commitment). If at such time any Canadian Facilities Lender holds Obligations under the Canadian Facilities in an amount less than its Applicable Commitment Percentage, as the case may be (the "Purchasing Lender"), the Purchasing Lender shall forthwith purchase from each Canadian Facilities Lender which holds Obligations under the Canadian Facilities in excess of its Applicable Commitment Percentage of the Obligations outstanding under the Canadian Facilities, as the case may be (the "Selling Lender") the amount of the Obligations under the Canadian Facilities from each Selling Lender required so that after such purchase and sale, each Canadian Facilities Lender holds Obligations under the Canadian Facilities equal to its Applicable Commitment Percentage of the Total Canadian Revolving Credit Commitment of such Obligations. Each Selling Lender agrees to sell such amount of such Obligations of the Canadian Facilities to the Purchasing Lender. 82 ARTICLE IV Yield Protection and Illegality 4.01 Additional Costs. (a) Each Borrower shall promptly pay to the Agent for the account of a Lender from time to time, such amounts as such Lender may determine to be necessary to compensate it for any costs incurred by such Lender which it determines are attributable to its making or maintaining any Loan or its obligation to make any Loans, or the issuance or maintenance by NationsBank or CIBC of or any other Lender's Participation in any Letter of Credit and Acceptance issued hereunder, or any reduction in any amount receivable by such Lender under this Agreement, the Notes, the Letters of Credit or the Acceptances in respect of any of such Loans or such obligation or the Letters of Credit or the Acceptances, including reductions in the rate of return on a Lender's capital (such increases in costs and reductions in amounts receivable and returns being herein called "Additional Costs"), resulting from any Regulatory Change which: (i) changes the basis of taxation of any amounts payable to such Lender under this Agreement or the Notes in respect of any of such Loans or Letters of Credit or Acceptances (other than taxes imposed on the income of such Lender by any jurisdiction in which the Principal Office or the applicable Lending Office of such Lender is located); or (ii) imposes or modifies any reserve, special deposit, or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Lender (other than any such reserve, deposit or requirement reflected in the Domestic Base Rate, the Domestic Prime Rate, the Canadian Prime Rate, the CD Rate or the Eurodollar Rate, in each case computed in accordance with the respective definitions of such terms set forth in Section 1.01 hereof); or (iii) has or would have the effect of reducing the rate of return on capital of any such Lender to a level below that which the Lender could have achieved but for such Regulatory Change (taking into consideration such Lender's policies with respect to capital adequacy); or (iv) imposes any other condition adversely affecting the Agent or the Lenders under this Agreement, the Notes or the issuance or maintenance of, or any Lender's Participation in, the Letters of Credit or Acceptances (or any of such extensions of credit or liabilities). Each Lender will notify the Authorized Representative of any event occurring after the Closing Date which would entitle it to compensation pursuant to this Section 4.01(a) as promptly as practicable after it obtains knowledge thereof and determines to request such compensation. (b) Without limiting the effect of the foregoing provisions of this Section 4.01, in the event that, by reason of any Regulatory Change, any Lender either (i) incurs Additional Costs based on or measured by the excess above a specified level of the amount of a category of deposits or other liabilities of the Lender which includes deposits by reference to which the interest rate on CD Loans or Eurodollar Rate Loans is determined as provided in this Agreement or a category of extensions of credit or other assets of 83 any Lender which includes CD Loans or Eurodollar Rate Loans or (ii) becomes subject to restrictions on the amount of such a category of liabilities or assets which it may hold, then, if the Lender so elects by notice to the other Lenders, the obligation of such Lender to make, and to convert Domestic Base Rate Loans, Floating CD Loans or Canadian Prime Rate Loans of any other type into, Fixed CD Loans or Eurodollar Rate Loans, as the case may be, hereunder shall be suspended until the date such Regulatory Change ceases to be in effect and the Borrower shall, on the last day(s) of the then current Interest Period(s) for outstanding Fixed CD Loans or Eurodollar Rate Loans, as the case may be, convert such Fixed CD Loans or Eurodollar Rate Loans into Domestic Base Rate Loans, Floating CD Loans or Canadian Prime Rate Loans or Fixed CD Loans or Eurodollar Loans, if available hereunder, in accordance with Section 2.09 or Section 3.08 hereof, as the case may be. (c) Determinations by any Lender for purposes of this Section 4.01 of the effect of any Regulatory Change on its costs of making or maintaining, or being committed to make Loans or as to NationsBank or CIBC as issuer of any Letter of Credit and Acceptance, the issuance or maintenance of, or any other Lender's Participation in, any Letter of Credit and Acceptance issued hereunder, or on amounts receivable by it in respect of Loans or Letters of Credit or Acceptances, and of the additional amounts required to compensate the Lender in respect of any Additional Costs, shall be conclusive absent manifest error, provided that such determinations are made on a reasonable basis. The Lender requesting such compensation shall furnish to the Authorized Representative an explanation of the Regulatory Change and calculations, in reasonable detail, setting forth such Lender's determination of any such Additional Costs. 4.02 Suspensions of Loans. Anything herein to the contrary notwithstanding, if, on or prior to the determination of any interest rate for any Fixed CD Loan or Eurodollar Rate Loan for any Interest Period therefor, the Agent determines (which determination made on a reasonable basis shall be conclusive absent manifest error) that: (a) quotations of interest rates for the relevant deposits referred to in the definition of "Fixed CD Rate" or "Eurodollar Rate" in Section 1.01 hereof or foreign exchange agreements or contracts with respect to an Alternative Currency are not being provided in the relevant amounts or for the relevant maturities for purposes of determining the rate of interest for such Fixed CD Loan or Eurodollar Rate Loan as provided in this Agreement; or (b) the relevant rates of interest referred to in the definition of "Applicable Reference Rate" in Section 1.01 hereof upon the basis of which the Fixed CD Rate or Eurodollar Rate for such Interest Period is to be determined do not adequately reflect the cost to the Lenders of making or maintaining 84 such Fixed CD Loan or Eurodollar Rate Loan for such Interest Period (which determination shall be made on a reasonable basis and the Agent shall furnish the Borrower evidence of the facts leading to such determination); then the Agent shall give the Authorized Representative prompt notice thereof, and so long as such condition remains in effect, the Lenders shall be under no obligation to make Fixed CD Loans or Eurodollar Rate Loans, as the case may be, or to convert Domestic Base Rate Loans, Floating CD Loans or Canadian Prime Rate Loans into Fixed CD Loans or Eurodollar Rate Loans, as the case may be, and the Borrower shall, on the last day(s) of the then current Interest Period(s) for outstanding Fixed CD Loans or Eurodollar Rate Loans, as applicable, convert such Fixed CD Loans or Eurodollar Rate Loans, into Domestic Base Rate Loans, Floating CD Loans or Canadian Prime Rate Loans or Fixed CD Loans or Eurodollar Rate Loans, if available hereunder, in accordance with Section 2.09 or Section 3.08 hereof, as the case may be. The Agent shall give the Authorized Representative notice describing in reasonable detail any event or condition described in this Section 4.02 promptly following the Agent's determination that the availability of Fixed CD Loans or Eurodollar Rate Loans, as the case may be, is, or is to be, suspended as a result thereof. 4.03 Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender to honor its obligation to make or maintain Eurodollar Rate Loans hereunder, then such Lender shall promptly notify the Borrowers thereof (with a copy to the Agent) and such Lender's obligation to make or continue Eurodollar Rate Loans, or convert Domestic Base Rate Loans, Floating CD Loans or Canadian Prime Rate Loans or Fixed CD Loans into Eurodollar Rate Loans, shall be suspended until such time as such Lender may again make and maintain Eurodollar Rate Loans, and such Lender's outstanding Eurodollar Rate Loans shall be converted into Domestic Base Rate Loans, Floating CD Loans or Canadian Prime Rate Loans or Fixed CD Loans in accordance with Section 2.09 or Section 3.08 hereof, as the case may be. 4.04 Compensation. The applicable Borrower shall promptly pay to each Lender, upon the request of such Lender, such amount or amounts as shall be sufficient (in the reasonable determination of Lender) to compensate it for any loss, cost or expense incurred by it as a result of: (a) any payment, prepayment or conversion of a Fixed CD Loan or Eurodollar Rate Loan on a date other than the last day of the Interest Period for such Fixed CD Loan or Eurodollar Rate Loan, including without limitation any conversion required pursuant to Section 4.03; or (b) any failure by the Borrower to borrow, continue or convert into a Fixed CD Loan or Eurodollar Rate Loan on the date for such borrowing, continuation or conversion specified 85 in the relevant Borrowing Notice under Section 2.01(b) and Section 3.01(b) hereof; such compensation to include, without limitation, an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the principal amount so paid, prepaid or converted or not borrowed for the period from the date of such payment, prepayment or conversion or failure to borrow to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, the Interest Period for such Loan which would have commenced on the date scheduled for such borrowing) at the applicable rate of interest for such Fixed CD Loan or Eurodollar Rate Loan provided for herein over (ii) the Applicable Reference Rate (as reasonably determined by the Agent) for Dollar deposits of amounts comparable to such principal amount and maturities comparable to such period; provided, however, that the amount payable hereunder shall be reduced by the amount of interest actually paid by the Borrower during the remaining term of such Interest Period in excess of the amount of interest which would have been paid on the Fixed Rate Loan. In addition and without duplication, Borrowers shall pay to the Agent for the benefit of the Lenders any costs associated with the earlier termination of any foreign exchange agreements or contracts associated with an Alternative Currency. A determination of a Lender as to the amounts payable pursuant to this Section 4.04 shall be conclusive, provided that such determinations are made on a reasonable basis. The Lender requesting compensation under this Section 4.04 shall furnish to the Authorized Representative calculations in reasonable detail setting forth such Lender's determination of the amount of such compensation. 4.05 Alternate Loan and Lender. In the event any Lender suspends the making of any Fixed Rate Loan pursuant to this Article IV (herein a "Restricted Lender"), the Restricted Lender's Applicable Commitment Percentage of any Fixed Rate Loan shall bear interest at either the Domestic Base Rate or the Fixed Rate for which the suspension does not apply, as selected by the applicable Borrower, until the Restricted Lender once again makes available the applicable Fixed Rate Loan. Notwithstanding the provisions of Section 2.02(b) or Section 3.02(b), interest shall be payable to the Restricted Lender at the time and manner as paid to those Lenders making available Fixed Rate Loans. 4.06 Taxes. All payments by each Borrower of principal of, and interest on, the Loans and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future excise, stamp or other taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding (i) franchise taxes, (ii) any taxes (other than withholding taxes) that would not be imposed but for a connection between a Lender or the Agent and the jurisdiction imposing such taxes (other than a connection arising solely by virtue of the 86 activities of such Lender or the Agent pursuant to or in respect of this Agreement or any other Loan Document), (iii) any withholding taxes payable with respect to payments hereunder or under any other Loan Document under laws (including, without limitation, any statute, treaty, ruling, determination or regulation), (iv) any taxes imposed on or measured by any Lender's assets, net income, receipts or branch profits and (v) any taxes arising after the Closing Date solely as a result of or attributable to Lender changing its designated Lending Office after the date such Lender becomes a party hereto (such non-excluded items being collectively called "Taxes"). In the event that any withholding or deduction from any payment to be made by any Borrower hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the applicable Borrower will (a) pay directly to the relevant authority the full amount required to be so withheld or deducted; (b) promptly forward to the Agent an official receipt or other documentation satisfactory to the Agent evidencing such payment to such authority; and (c) pay to the Agent for the account of the Lender such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required. Prior to the date that any Lender or participant organized under the laws of a jurisdiction outside the United States becomes a party hereto, such Person shall deliver to the Borrowers and the Agent such certificates, documents or other evidence, as required by the Code or Treasury Regulations issued pursuant thereto, properly completed, currently effective and duly executed by such Lender or participant establishing that such payment is (i) not subject to United States Federal backup withholding tax and (ii) not subject to United States Federal withholding tax under the Code because such payment is either effectively connected with the conduct by such Lender or participant of a trade or business in the United States or totally exempt from United States Federal withholding tax by reason of the application of the provisions of a treaty to which the United States is a party or such Lender is otherwise exempt. If the applicable Borrower fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Agent, for the account of the respective Lender, the required receipts or other required documentary evidence, the applicable Borrower shall indemnify the Lenders for any incremental Taxes, interest or penalties that may become payable by any Lender as a result of any such failure. For purposes of this Section 4.06, a distribution hereunder by the Agent or any Lender to or for the account of any Lender shall be deemed a payment by the applicable Borrower. 87 4.07 Restricted Lender. In the event any Lender seeks additional compensation pursuant to this Article IV or is restricted from making any Fixed Rate Loan under this Agreement, including providing an Alternative Currency which is made available by other Lenders (a "Restricted Lender"), TDC may cause such Restricted Lender to be replaced by a financial institution reasonably acceptable to the Agent which is not similarly restricted and will not seek such additional compensation. Such Restricted Lender agrees to execute and to deliver to the Agent an Assignment and Acceptance as provided in Section 12.01 hereof upon payment of all amounts owed under this Agreement to such Restricted Lender. 4.08 Funding. In the event any Borrower elects to obtain any Loans as Fixed Rate Loans pursuant to Section 2.01 or Section 3.01, or elects to continue any Fixed Rate Loans or convert any portion of the principal amount of any Domestic Base Rate Loans, Canadian Prime Rate Loans or Floating CD Loans to Fixed Rate Loans pursuant to Section 2.09 or Section 3.08, each Lender may, if it so elects, fulfill its obligation to make or continue any portion of the principal amount of any Loan as, or to convert any portion of the principal amount of any Loan into, a Fixed Rate Loan in accordance with any election made by such Borrower by causing a foreign branch or affiliate of such Lender or an international banking facility created by such Lender to make such Fixed Rate Loan; provided that in such event such Fixed Rate Loan shall be deemed to have been made by such Lender, and the obligation of the Borrower to repay such Fixed Rate Loan shall nevertheless be to such Lender and shall be deemed to be held by such Lender, to the extent of such Fixed Rate Loan, for the account of such foreign branch, affiliate or international banking facility. In addition, the Borrowers hereby consent and agree that, for purposes of any determination to be made for purposes of this Agreement (including Sections 4.01, 4.02, 4.03 and 4.04), it shall be conclusively assumed that each Lender elected to fund all Fixed Rate Loans by purchasing Dollar deposits in its eurodollar office's interbank eurodollar market. 88 ARTICLE V Conditions to Making Loans, Issuing Letters of Credit and Creating Acceptances 5.01 Conditions of Initial Advance and Issuance of Letters of Credit and Creating Acceptances. The obligation of the Lenders to make the initial Domestic Advance or Canadian Advance and of NationsBank and CIBC to issue the Letters of Credit and create Acceptances is subject to the following conditions precedent: (a) The Agent shall have received, on the Closing Date in form and substance satisfactory to the Agent and the Lenders the following: (i) executed originals of each of this Agreement and the Notes and the other Loan Documents, together with all schedules and exhibits thereto in form and substance satisfactory to the Agent and the Lenders; (ii) favorable written opinion or opinions of counsel to the Borrowers and each Subsidiary executing a Guaranty dated the Closing Date, addressed to the Agent and the Lenders and satisfactory to Smith Helms Mulliss & Moore, L.L.P., special counsel to the Agent, substantially in the form of Exhibits K-1 and K-2 attached hereto; (iii) resolutions of the board of directors (or of the appropriate committee thereof) of each of the Borrowers certified by its secretary or assistant secretary as of the Closing Date, appointing the initial Authorized Representatives and approving and adopting the Loan Documents to be executed by such Borrower, and authorizing the execution and delivery thereof; specimen signatures of officers of each Borrower executing the Loan Documents, certified by the Secretary or Assistant Secretary of such Borrower; (iv) the charter documents of each of the Borrowers certified as of a recent date by the Secretary of State or comparable official of its jurisdiction of organization; (v) the by-laws of each of the Borrowers certified as of the Closing Date as true and correct by the secretary or assistant secretary of such Borrower; (vi) certificates issued as of a recent date by the Secretary of State or comparable official of the jurisdiction of the formation of each of the Borrowers as to the corporate good standing of such Borrower therein; (vii) appropriate certificates of qualification to do business and of corporate good standing with respect to each of the Borrowers issued as of a recent date by the Secretary 89 of State or comparable official of each jurisdiction in which the failure to be qualified to do business could materially adversely affect the business, operations or conditions, financial or otherwise, of such Borrower; (viii) with respect to each Significant Subsidiary executing a Guaranty, each of the opinions, certificates and documents described in subsections (ii) through (vii) above; (ix) notice(s) of appointment of the initial Authorized Representatives; (x) all fees payable by the Borrowers on the Closing Date to the Agent and the Lenders; (xi) evidence satisfactory to the Agent of the repayment in full and termination of each of the Prior Credit Facilities substantially simultaneously with the making of the initial Domestic Advance and the initial Canadian Advance hereunder, and the agreement to terminate any Liens on assets securing any obligations under any of the Prior Credit Facilities which termination shall be effected with reasonable promptness following the Closing Date; and (xii) such other documents, instruments, certificates and opinions as the Agent or any Lender may reasonably request on or prior to the Closing Date in connection with the consummation of the transactions contemplated hereby; and (b) In the good faith judgment of the Agent and the Lenders: (i) there shall not have occurred or become known to the Agent or the Lenders any material adverse change in the business, financial condition, operations, properties or prospects of TDC and its Subsidiaries, taken as a whole, since January 31, 1996; (ii) no litigation shall be pending or threatened which would be likely to materially and adversely affect the business, financial condition, operations, properties or prospects of TDC and its Subsidiaries, taken as a whole, or which could reasonably be expected to restrain or enjoin, impose burdensome conditions on, or otherwise materially and adversely (A) affect the ability of any of TDC and its Subsidiaries to fulfill their respective obligations under the Loan Documents, or (B) impair any interests or rights of the Agent or any Lender under the Loan Documents; and (iii) TDC and its Subsidiaries shall have received all approvals, consents and waivers, and shall have made or given all necessary filings and notices as shall be required to consummate the transactions contemplated hereby without the occurrence of any default under, conflict with or violation of 90 (A) any applicable law, rule, regulation, order or decree of any Governmental Authority or arbitral authority or (B) any agreement, document or instrument to which any of TDC or any Subsidiaries is a party or by which any of them or their properties is bound, except for such approvals, consents, waivers, filings and notices the receipt, making or giving of which is not, in the good faith judgment of the Agent and the Lenders, material to the enforcement of any of the Loan Documents, or the financial condition, business or operations of TD and its Subsidiaries, taken as a whole. 5.02 Conditions of Loans. The obligations of the Lenders to make any Loans, and of NationsBank or CIBC to issue Letters of Credit or create Acceptances hereunder on or subsequent to the Closing Date are subject to the satisfaction of the following conditions: (a) the Agent shall have received a notice of such borrowing or request if required by Sections 2.01 or 2.15 hereof or Section 3.01; (b) the representations and warranties of the Borrowers set forth in Article VII hereof and in each of the other Loan Documents shall be true and correct on and as of the date of such Advance or Loan or issuance of such Letter of Credit or Acceptance, as the case may be, with the same effect as though such representations and warranties had been made on and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date and except that the financial statements referred to in Section 7.02(c) shall be deemed to be those financial statements most recently delivered to the Agent and the Lenders pursuant to Section 8.01 hereof; (c) in the case of the issuance of a Letter of Credit, Borrower shall have executed and delivered to NationsBank or CIBC, as applicable, a Letter of Credit Application in form and content acceptable to NationsBank or CIBC, as applicable, together with such other instruments and documents as it shall request; provided that the terms and conditions of this Agreement shall control if any conflict should exist between the terms of such Letter of Credit Application and this Agreement; (d) in the case of the creation of a Domestic Acceptance, the Multicurrency Facilities Borrower shall have executed and delivered to NationsBank a General Acceptance Agreement for Domestic Acceptances and a draft in form and content acceptable to NationsBank together with such other instruments and documents as NationsBank shall reasonably request; 91 (e) at the time of each such Advance or Loan or issuance of each Letter of Credit or Acceptance, as the case may be, no Default or Event of Default specified in Article X hereof, shall have occurred and be continuing; (f) immediately after giving effect to a Domestic Advance or Domestic Loan, a Domestic Acceptance or a Domestic Letter of Credit, the Total Domestic Utilization shall not exceed the Total Domestic Revolving Credit Commitment; (g) immediately after giving effect to a Canadian Advance or Canadian Loan, a Canadian Acceptance or a Canadian Letter of Credit, the Total Canadian Utilization shall not exceed the Total Canadian Revolving Credit Commitment; (h) immediately after giving effect to a Swing Line Loan the aggregate Swing Line Outstandings shall not exceed $15,000,000; (i) immediately after giving effect to the issuance of any Domestic Letter of Credit the Letter of Credit Outstandings shall not exceed $75,000,000; (j) immediately after giving effect to the issuance of any Canadian Letter of Credit, the Canadian Letter of Credit Outstandings shall not exceed $25,000,000; and (k) immediately after giving effect to any Competitive Bid Loan, the aggregate principal amount of outstanding Competitive Bid Loans shall not exceed $25,000,000. Each borrowing of Loans and each issuance of a Letter of Credit and Acceptance shall constitute a representation and warranty by the Borrowers that the conditions set forth in clauses (b) and (e) above have been satisfied as of the date thereof and that as of the date of such Advance or issuance of a Letter of Credit or Acceptance there has not been any material adverse change in the business, operations or financial condition of TDC and its Subsidiaries. 92 ARTICLE VI Security 6.01 Guaranties. As support for the full and timely payment and performance of all Obligations, the Borrowers shall on or before the Closing Date cause to be delivered to the Agent (i) the unconditional guaranty of payment for the benefit of the Multicurrency Facilities Lenders of all Obligations of the Multicurrency Facilities Borrowers in connection with the Multicurrency Facilities by the Significant Subsidiaries of TDC (other than TD France), and (ii) the unconditional guaranty of payment by TDC and its Significant Subsidiaries (other than TD Canada) for the benefit of the Canadian Facilities Lenders of all Obligations of TD Canada in connection with the Canadian Facilities. 6.02 Further Assurances. At the request of the Agent, each Subsidiary and TDC will execute by its duly authorized officers, alone or with the Agent, any certificate, instrument, statement or document and will procure any such certificate, instrument, statement or document (and pay all connected costs) which the Agent reasonably deems necessary to create, continue or preserve the guaranty by such Subsidiary or TDC. 6.03 New Subsidiaries. As provided in Section 8.20 hereof, to the extent allowed under this Agreement, if TDC acquires or forms a Significant Subsidiary, TDC shall cause such Significant Subsidiary to execute a Guaranty of Obligations as described in Section 6.01(i) hereof. 93 ARTICLE VII Representations and Warranties 7.01 Representations and Warranties as to Borrowers and Subsidiaries. Each Borrower represents and warrants to and in favor of the Agents and each Lender with respect to itself and to its Subsidiaries (which representations and warranties shall survive the delivery of the documents mentioned herein and the making of Loans and the issuance of Letters of Credit), that: (a) Organization and Authority. (i) It is a corporation duly organized and validly existing under the laws of the jurisdiction of its incorporation; (ii) it has the corporate power and authority to own its properties and assets and to carry on its business as now being conducted and is qualified to do business in every jurisdiction in which failure so to qualify would have a material adverse effect on the business or operations of TDC or its Subsidiaries; (iii) it has the corporate power and authority to execute and perform this Agreement, and to borrow hereunder (in the case of a Borrower), and to execute and deliver each of the other Loan Documents to which it is a party; (iv) each Subsidiary executing a Guaranty has the power and authority to execute, deliver and perform the Guaranty to which it is a party; and (v) when executed and delivered, each of the Loan Documents to which such Borrower or any Subsidiary is a party will be valid and binding obligations of the Borrower or such Subsidiary signatory thereto, enforceable against the Borrower or such Subsidiary signatory thereto, in accordance with its terms, subject to the effect of any applicable bankruptcy, moratorium, insolvency, reorganization or other similar law affecting the enforceability of creditors' rights generally and to the effect of general principles of equity which may limit the availability of equitable remedies (whether in a proceeding at law or in equity); (b) Loan Documents. The execution, delivery and performance by each Borrower and each Subsidiary of each of the Loan Documents to which it is a party: (i) have been duly authorized by all requisite corporate action (including any required shareholder approval) of such Borrower or its Subsidiaries, as the case may be, required for the lawful execution, delivery and performance thereof; 94 (ii) do not violate any provisions of (1) applicable law, (2) any order of any court or other agency of government binding on the Borrower or its Subsidiaries or its or their properties, (3) the charter documents or by-laws of the Borrower or its Subsidiaries or (4) any provisions of any indenture, agreement or other instrument to which the Borrower or its Subsidiaries are a party, or by which the properties or assets of the Borrower or its Subsidiaries are bound; (iii) will not be in conflict with, result in a breach of or constitute an event of default, or an event which, with notice or lapse of time, or both, would constitute an event of default, under any indenture, agreement or other instrument to which the Borrower or its Subsidiaries are a party; and (iv) will not result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Borrower or any Subsidiary. (c) Solvency. Each Borrower and each of its Subsidiaries are Solven after giving effect to the transactions contemplated by this Agreement and the other Loan Documents. 7.02 Representations and Warranties of TDC. TDC represents and warrants with respect to itself and its Subsidiaries (which representations and warranties shall survive the delivery of the documents mentioned herein and the making of Loans) that: (a) Subsidiaries and Stockholders. It has no Subsidiaries other than those Persons listed as Subsidiaries in Schedule 7.02(a) hereto; Schedule 7.02(a) to this Agreement states as of the date hereof the authorized and issued capitalization of each Subsidiary, the number of shares of each class of capital stock issued and outstanding of each such Subsidiary and the number and percentage of outstanding shares of each such class of capital stock owned by TDC or by any such Subsidiary; the outstanding shares of each such Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable; and TDC and each such Subsidiary owns beneficially and of record all the shares it is listed as owning in Schedule 7.02(a), free and clear of any Lien. (b) Ownership Interests. It does not own any interest in any Person other than the Persons listed in Schedule 7.02(b) hereto; (c) Financial Condition. (i) TDC has heretofore furnished to each Lender an audited unqualified consolidated 95 balance sheet of TDC and its Subsidiaries as at January 31, 1996 and the notes thereto and the related consolidated statements of income, cash flow and changes in stockholders' equity for the Fiscal Year then ended as examined and certified by Price Waterhouse L.L.P. Except as set forth therein, such financial statements (including the notes thereto) present fairly the financial condition of TDC and the Subsidiaries as of the end of such Fiscal Year and results of their operations and the changes in their stockholders' equity for the Fiscal Year then ended, all in conformity with Generally Accepted Accounting Principles applied on a Consistent Basis. Except as disclosed therein or otherwise described or referred to in Schedule 7.02(c), neither TDC nor any Subsidiary has, as of the date hereof, any known and material direct liability. (ii) since January 31, 1996, there has been no material adverse change in the condition, financial or otherwise, of TDC and its Subsidiaries or in the businesses, properties and operations of TDC and its Subsidiaries, in each case, considered as a whole, nor have such businesses or properties, taken as a whole, been materially adversely affected as a result of any fire, explosion, earthquake, accident, strike, lockout, combination of workers, flood, embargo or act of God; (iii) except as set forth in Schedule 7.02(c) hereto, TDC and its Subsidiaries have not incurred, other than in the ordinary course of business, any material indebtedness, liabilities, obligations or commitments, contingent or otherwise which remain outstanding or unsatisfied; (d) Title to Properties. TDC and its Subsidiaries have title to all their respective real and personal properties subject to no transfer restrictions, liens, mortgages, pledges, security interests, encumbrances or charges of any kind, except for (i) the transfer restrictions and liens described in Schedule 7.02(d) attached hereto, and (ii) liens permitted under Section 9.06 hereof; (e) Taxes. TDC and its Subsidiaries have filed or caused to be filed all federal, state and local tax returns which are required to be filed by them and except for taxes and assessments being contested in good faith and against which satisfactory reserves have been established, have paid or caused to be paid all taxes as shown on said returns or on any assessment received by them, to the extent that such taxes have become due; (f) Other Agreements. Neither TDC nor any Subsidiary is (i) a party to any judgment, order, decree or any agreement or instrument or subject to restrictions materially adversely affecting the business, properties 96 or assets, operation or condition (financial or otherwise) of TDC and the Subsidiaries, taken as a whole; or (ii) in default in the performance, observance or fulfillment of any of the material obligations, covenants or conditions contained in any agreement or instrument to which TDC or any Subsidiary is a party, which default has, or if not remedied within any applicable grace period could have, a material adverse effect on the business, operations or condition, financial or otherwise, of TDC and the Subsidiaries taken as a whole; (g) Litigation. Except as set forth in Schedule 7.02(g) hereto, there is no action, suit or proceeding at law or in equity or by or before any governmental instrumentality or agency or arbitral body pending, or, to the best knowledge of TDC, threatened by or against TDC or any Subsidiary or affecting TDC or any Subsidiary or any properties or rights of TDC or any Subsidiary, which, if, determined adversely to TDC or such Subsidiary, would materially adversely affect the financial condition, business or operations of TDC and the Subsidiaries taken as a whole; (h) Margin Stock. Neither TDC nor any Subsidiary owns any "margin stock" as such term is defined in Regulation U, as amended (12 C.F.R. Part 221), of the Board. The proceeds of the borrowings made pursuant to Sections 2.01, 2.04, 2.15 and 3.01 hereof, the Letters of Credit and the Acceptances will be used by TDC only for the purposes set forth in Section 2.13 and Section 3.11 hereof. None of such proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any margin stock or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry margin stock or for any other purpose which might constitute any of the Loans under this Agreement a "purpose credit" within the meaning of said Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither TDC nor any agent acting in its behalf has taken or will take any action which might cause this Agreement or any of the documents or instruments delivered pursuant hereto to violate any regulation of the Board or to violate the Securities Exchange Act of 1934 or any state securities laws, in each case as in effect on the date hereof; (i) Investment Company. Neither TDC nor any Subsidiary is an "investment company," or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C. ss.80a-1, et seq.). The application of the proceeds of the Loans, the Letters of Credit and the Acceptances and repayment thereof by TDC and the performance by TDC of the transactions contemplated by 97 this Agreement will not violate any provision of said Act, or any rule, regulation or order issued by the Securities and Exchange Commission thereunder, in each case as in effect on the date hereof; (j) Patents, Etc. TDC and its Subsidiaries own or have the right to use, under valid license agreements or otherwise, all material patents, licenses, franchises, trademarks, trademark rights, tradenames, tradename rights, copyrights and know how necessary to the conduct of their businesses as now conducted, without known material conflict with any patent, license, franchise, trademark, trade secrets and confidential commercial or proprietary information, tradename, copyright, rights to trade secrets or other proprietary rights of any other Person; (k) No Untrue Statement. Neither this Agreement nor any other Loan Document or certificate or document executed and delivered by or on behalf of TDC or any Subsidiary in accordance with Section 5.01 hereof contains any misrepresentation or untrue statement of material fact or omits to state a material fact necessary, in light of the circumstance under which it was made, in order to make any such representation or statement contained therein not misleading in any material respect; (l) No Consents, Etc. Neither the respective businesses or properties of TDC or any Subsidiary, nor any relationship between TDC or any Subsidiary and any other Person, nor any circumstance in connection with the execution, delivery and performance of the Loan Documents and the transactions contemplated hereby is such as to require a consent, approval or authorization of, or filing, registration or qualification with, any governmental or other authority or any other Person on the part of TDC or any Subsidiary as a condition to the execution, delivery and performance of, or consummation of the transactions contemplated by, this Agreement or the other Loan Documents or if so, such consent, approval, authorization, filing, registration or qualification has been obtained or effected, as the case may be; (m) ERISA. (i) None of the employee benefit plans maintained at any time by TDC or any Subsidiary or the trusts created thereunder has engaged in a prohibited transaction which could subject any such employee benefit plan or trust to a material tax or penalty on prohibited transactions imposed under Internal Revenue Code Section 4975 or ERISA or under any Foreign Benefit Law; (ii) None of the employee benefit plans maintained at any time by TDC or any Subsidiary which are employee 98 pension benefit plans and which are subject to Title IV of ERISA or any Foreign Benefit Law or the trusts created thereunder has been terminated so as to result in a material liability of TDC or any Subsidiary under ERISA or any other Person exercising similar duties and functions under any Foreign Benefit Law nor has any such employee benefit plan of TDC incurred any liability to the Pension Benefit Guaranty Corporation established pursuant to ERISA, other than for required insurance premiums which have been paid; neither TDC nor any Subsidiary has withdrawn from or caused a partial withdrawal to occur with respect to any Multi-employer Plan; TDC and its Subsidiaries have made or provided for all contributions to all such employee pension benefit plans which they maintain and which are required as of the end of the most recent fiscal year under each such plan; neither TDC nor any Subsidiary has incurred any accumulated funding deficiency with respect to any such plan, whether or not waived; nor has there been any reportable event, or other event or condition, which presents a material risk of termination of any such employee benefit plan by such Pension Benefit Guaranty Corporation or other Person exercising similar duties and functions under any Foreign Benefit Law; (iii) The present value of all vested accrued benefits under the employee pension benefit plans which are subject to Title IV of ERISA or any Foreign Benefit Law, maintained by TDC or any Subsidiary, did not, as of the most recent valuation date for each such plan, exceed the then current value of the assets of such employee benefit plans allocable to such benefits; (iv) The consummation of the Loans and the issuance of the Letters of Credit and Acceptances provided for in Article II and Article III will not involve any prohibited transaction under ERISA or violate any Foreign Benefit Law; (v) To the best of TDC's knowledge, each employee pension benefit plan subject to Title IV of ERISA or other Foreign Benefit Law, maintained by TDC or any Subsidiary, has been administered in accordance with its terms and is in compliance in all material respects with all applicable requirements of ERISA and other applicable laws, regulations and rules and any applicable Foreign Benefit Law; (vi) There has been no withdrawal liability incurred with respect to any Multi-employer Plan to which TDC or any Subsidiary is or was a contributor; (vii) As used in this Agreement, the terms "employee benefit plan," "employee pension benefit plan," "accumulated funding deficiency," "reportable event," and "accrued benefits" shall have the respective meanings assigned to them 99 in ERISA, and the term "prohibited transaction" shall have the meaning assigned to it in Code Section 4975 and ERISA; (viii) Neither TDC nor any Subsidiary has any liability, contingent or otherwise, under any plan or program or the equivalent for unfunded post-retirement benefits, including pension, medical and death benefits, which liability would have a material adverse effect on the financial condition of TDC and its Subsidiaries taken as a whole; (n) No Default. As of the date hereof, there does not exist any Default or Event of Default hereunder; (o) Hazardous Materials. Neither TDC nor, to the best of TDC's knowledge, any previous owner or operator of any real property currently owned or operated by TDC or any Subsidiary (collectively, the "Property") or any other Person, has generated, stored, or disposed of any Hazardous Material on any portion of the Property, or transferred any Hazardous Material from the Property to any other location, giving rise to any liability of TDC which would have a materially adverse effect on TDC and the Subsidiaries taken as a whole. TDC and each Subsidiary is in compliance with all applicable Environmental Laws and neither TDC nor any Subsidiary has been notified of any action, suit, proceeding or investigation which calls into question compliance by TDC or any Subsidiary with any Environmental Laws or which seeks to suspend, revoke or terminate any license, permit or approval necessary for the generation, handling, storage, treatment or disposal of any Hazardous Material. 100 ARTICLE VIII Affirmative Covenants Until the Obligations have been paid and satisfied in full and this Agreement has been terminated in accordance with the terms hereof, unless the Required Lenders shall otherwise consent in writing, TDC will and will cause each Subsidiary to: 8.01 Financial Reports, Etc. (a) as soon as practical and in any event within 120 days after the end of each Fiscal Year of TDC, deliver or cause to be delivered to the Agents and each Lender (i) consolidated and consolidating balance sheets of TDC and its Subsidiaries, and the notes thereto, and the related consolidated and consolidating statements of income, cash flow and changes in stockholders' equity and the respective notes thereto for such Fiscal Year, setting forth in each case comparative financial statements for the preceding Fiscal Year, all prepared in accordance with Generally Accepted Accounting Principles applied on a Consistent Basis and containing, with respect to the consolidated financial reports, opinions of Price Waterhouse L.L.P., or other such independent certified public accountants selected by TDC and approved by the Required Lenders, which are unqualified as to the scope of the audit performed and as to the "going concern" status of TDC; (ii) a copy of TDC's Form 10K as filed with the Securities and Exchange Commission; and (iii) a certificate of an Authorized Representative demonstrating compliance with Sections 9.01, 9.02, 9.03, 9.04, 9.05, 9.06(iv) and (v), 9.13, 9.15 and 9.16 of this Agreement, which certificate shall be in the form attached as Exhibit L; (b) as soon as practical and in any event within 60 days after the end of each quarterly period (except the last reporting period of the Fiscal Year), deliver to the Agents and each Lender (i) consolidated and consolidating balance sheets of TDC and its Subsidiaries, as of the end of such reporting period and the related consolidated and consolidating statements of income, cash flow and changes in stockholders' equity for such reporting period and for the period from the beginning of the Fiscal Year through the end of such reporting period, certified by an Authorized Representative as presenting fairly the financial position of TDC and its Subsidiaries as of the end of such reporting period and the results of their operations and the changes in their financial position for such reporting period, in conformity with the standards set forth in Section 7.02(c)(i) with respect to interim financials, (ii) a copy of TDC's Form 10Q for such quarterly period as filed with the Securities and Exchange Commission and (iii) a certificate of an Authorized Representative containing computations for such quarter similar to that required pursuant to Section 8.01(a)(iii); (c) together with each delivery of the financial statements required by Section 8.01(a) hereof, deliver to the Agents and each 101 Lender a letter from TDC's accountants specified in Section 8.01(a) hereof stating that in performing the examination necessary to render an opinion on the financial statements delivered therewith, they obtained no knowledge of any Default or Event of Default by TDC or any Subsidiary in the fulfillment of the terms and provisions of this Agreement insofar as they relate to financial matters (which at the date of such statement remains uncured); and if the accountants have obtained knowledge of such Default or Event of Default, a statement specifying the nature and period of existence thereof; (d) promptly upon their becoming available to TDC, TDC shall deliver to the Agents, and each Lender, a copy of (i) all regular or special reports or effective registration statements which TDC or any Subsidiary shall file with the Securities and Exchange Commission (or any successor thereto) or any securities exchange, (ii) all reports, proxy statements, financial statements and other information distributed by TDC to its stockholders, bondholders or the financial community in general, and (iii) any reports submitted to TDC or any of its Subsidiaries by independent accountants in connection with any annual, interim or special audit of TDC or any of its Subsidiaries; (e) promptly, from time to time, deliver or cause to be delivered to each Lender such other information regarding TDC's and each Subsidiary's operations, business affairs and financial condition as such Lender may reasonably request, including audited financial statements of any Subsidiary, to the extent such statements exist. The Agents and the Lenders are hereby authorized to deliver a copy of any such financial information delivered hereunder to the Lenders (or any affiliate of any Lender) or to the Agent, to any regulatory authority having jurisdiction over any of the Lenders pursuant to any written request therefor, to any other Person who shall acquire or consider the acquisition of a participation interest in or assignment of any Loan or the Letters of Credit or Acceptances permitted by this Agreement; 8.02 Maintain Properties. Maintain all properties and other personal property necessary to its operations in good working order and condition and make all needed repairs, replacements and renewals as are necessary to conduct its business in accordance with customary business practices; 8.03 Existence, Qualification, Etc. Do or cause to be done all things necessary to preserve and keep in full force and effect its existence and all material rights and franchises, trade names, trademarks and permits and maintain its license or qualification to do business as a foreign corporation and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business where the failure to maintain such license or qualification would have a material adverse effect on TDC and its Subsidiaries; 102 8.04 Regulations and Taxes. Comply with or contest in good faith all statutes and governmental regulations and pay all taxes, assessments, governmental charges, claims for labor, supplies, rent and any other obligation which, if unpaid, might become a lien against any of its properties except liabilities being contested in good faith and against which adequate reserves have been established; 8.05 Insurance. TDC shall, and shall cause each Subsidiary to, maintain with financially sound and reputable insurers insurance with respect to its properties and business and against such liabilities, casualties and contingencies of such types and in such amounts as is customary in the case of corporations engaged in the same or a similar business or having similar properties similarly situated. 8.06 True Books. Keep true books of record and account in which full, true and correct entries will be made of all of its dealings and transactions, and set up on its books such reserves as may be required by Generally Accepted Accounting Principles or other accounting principles applicable in the jurisdiction of a Borrower or Subsidiaries organization or creation with respect to all taxes, assessments, charges, levies and claims and with respect to its business in general, and include such reserves in interim as well as year-end financial statements. 8.07 Pay Indebtedness to Lenders and Perform Other Covenants. (a) Make full and timely payment of the principal of and interest on the Notes and all other Obligations whether now existing or hereafter arising; and (b) duly comply with all the terms and covenants contained in all other instruments and documents given to the Agent or any Lender pursuant to this Agreement. 8.08 Right Of Inspection. Permit any Person designated by any Lender, at the Lender's expense, to visit and inspect any of the properties, corporate books and financial reports of TDC and its Subsidiaries, and to discuss its affairs, finances and accounts with its principal officers and independent certified public accountants, all at such reasonable times, at reasonable intervals and with reasonable prior notice. Information received by the Agent and any Lender pursuant to such inspections shall be limited to distribution in the same manner as described in Section 8.01(e) hereof. 8.09 Observe all Laws. Conform to and duly observe all laws, regulations and other valid requirements of any regulatory authority with respect to the conduct of its business, the failure of which to observe would have a material adverse effect on its business. 8.10 Covenants Extending to Subsidiaries. Cause each of its Subsidiaries to do with respect to itself, its business 103 and its assets, each of the things required of TDC in Sections 8.02 through 8.09, inclusive. 8.11 Officer's Knowledge of Default. Upon an officer of TDC obtaining knowledge of any Default or Event of Default hereunder or under any other obligation of TDC or any Subsidiary, cause such officer to promptly notify the Agents of the nature thereof, the period of existence thereof, and what action TDC proposes to take with respect thereto. 8.12 Suits or Other Proceedings. Upon an officer of TDC obtaining knowledge of any litigation, dispute or proceedings being instituted or threatened against TDC or its Subsidiaries, or any attachment, levy, execution or other process being instituted against any assets of TDC or its Subsidiaries in an amount greater than $500,000 not otherwise covered by insurance, promptly deliver to the Agents written notice thereof stating the nature and status of such litigation, dispute, proceeding, levy, execution or other process. 8.13 Environmental Reports. Promptly provide to the Agents true, accurate and complete copies of any and all documents, including reports, submissions, notices, orders, directives, findings and correspondence made by TDC or any Subsidiary to the United States Environmental Protection Agency ("EPA"), the United States Occupational Safety and Health Administration ("OSHA") or to any other federal, state or local authority pursuant to any federal, state or local law, code or ordinance and all rules and regulations promulgated thereunder which require informational submissions concerning environmental, health or safety matters. 8.14 Notice of Discharge of Hazardous Material or Environmental Complaint. Give to the Agents immediate written notice of any complaint, order, directive, claim, citation or notice by any governmental authority or any Person to TDC, any Subsidiary or any successor with respect to (i) air emissions, (ii) spills, releases or discharges to soils or improvements located thereon, surface water, groundwater or the sewer, septic system or waste treatment, storage or disposal systems servicing the Property, (iii) noise emissions, (iv) solid or liquid waste disposal, or (v) the use, generation, storage, transportation or disposal of Hazardous Material. Such notices shall include, among other information, the name of the party who filed the claim, the nature of the claim and the actual or potential amount of the claim. TDC shall promptly comply with its obligations under law with regard to such matters. However, TDC shall not be obligated to give such notice to Agent of discharge or existence of any Hazardous Material which occurs legally in accordance with and pursuant to the terms and conditions of a valid governmental permit, license, certificate or approval therefor. 8.15 Indemnification. The Borrowers hereby jointly and severally agree to defend, indemnify and hold the Agents and 104 Lenders harmless from and against any and all claims, losses, liabilities, damages and expenses (including, without limitation, cleanup costs and reasonable attorneys' fees including those arising by reason of any of the aforesaid or an action against TDC or any Subsidiary under this indemnity) arising directly or indirectly from, out of or by reason of the handling, storage, treatment, emission or disposal of any Hazardous Material by or in respect of TDC or any Subsidiary or property owned or leased by TDC or any Subsidiary. The provisions of this Section 8.16 shall survive repayment of the Obligations, occurrence of the Revolving Credit Termination Date and expiration or termination of this Agreement. This indemnity shall not apply to the extent of damages caused to Agent, Lenders or others by Agent or Lenders. 8.16 Further Assurances. At its cost and expense, upon request of either of the Agents, duly execute and deliver or cause to be duly executed and delivered, to the Agents such further instruments, documents, certificates, and do and cause to be done such further acts that may be reasonably necessary or advisable in the opinion of the Agents to carry out more effectively the provisions and purposes of this Agreement and the other Loan Documents. 8.17 ERISA Requirement. Comply with all material requirements of ERISA, to the extent applicable, and any Foreign Benefit Law applicable to it and furnish to the Agents as soon as possible and in any event (i) within thirty (30) days after TDC or duly appointed administrator of a employee benefit plan knows or has reason to know that any reportable event or other event under any Foreign Benefit Law with respect to any employee benefit plan has occurred, written statement of an Authorized Representative describing in reasonable detail such reportable event or other event under any Foreign Benefit Law and any action which TDC proposes to take with respect thereto, together with a copy of the notice of such reportable event given to the PBGC or a statement that said notice will be filed with the annual report of the United States Department of Labor with respect to such plan if such filing has been authorized, (ii) promptly after receipt thereof, a copy of any notice that TDC or any Subsidiary may receive from the PBGC relating to the intention of the PBGC to terminate any employee benefit plan or plans or to appoint a trustee to administer any such plan, and (iii) within 10 days after a filing with the PBGC pursuant to Section 412(n) of the Code of a notice of failure to make a required installment or other payment with respect to a plan, a certificate of an Authorized Representative setting forth details as to such failure and the action that TDC or its Subsidiary proposes to take with respect thereto, together with a copy of such notice given to the PBGC. 8.18 Continued Operations. Continue at all times (i) to maintain the chief executive offices and principal place of business of TDC at 5350 Tech Data Drive, Clearwater, Florida 34620 (ii) continue to conduct and cause each Subsidiary to conduct its 105 business and engage principally in the same line or lines of business substantially as heretofore conducted, and (iii) preserve, protect and maintain free from liens its material patents, copyrights, licenses, trademarks, trademark rights, trade names, trade name rights, trade secrets and know-how necessary or useful in the conduct of its operations. 8.19 Use of Proceeds. Use the proceeds of the Loans, Letters of Credit and Acceptances solely for the purposes specified in Articles II and III hereof, as applicable. 8.20 New Subsidiaries. (a) Simultaneously with the formation of any Significant Subsidiary or the acquisition of any Significant Subsidiary permitted by the terms of this Agreement or at any time a Subsidiary becomes a Significant Subsidiary, cause to be delivered to the Agent for the benefit of the Lenders each of the following: (i) a guarantee agreement of each Significant Subsidiary, each duly executed by such Significant Subsidiary substantially in the form of the Guaranty; (ii) an opinion of counsel to the Borrowers and the Significant Subsidiaries (which may be an employee of TDC) dated as of the date of delivery of the documents provided in the foregoing clause (i) and addressed to the Agent and the Lenders, in form and substance reasonably acceptable to the Agent and the Lenders (which opinion may include assumptions and qualifications of similar effect to those contained in the opinions of counsel delivered pursuant to Section 5.01(b) hereof), to the effect that: (A) such Significant Subsidiary is duly organized, validly existing and in good standing in the jurisdiction of its incorporation, has the requisite corporate power and authority to own its properties and conduct its business as then owned and then proposed to be conducted and is duly qualified to transact business and is in good standing as a foreign corporation in each other jurisdiction in which the character of the properties owned or leased, or the business carried on by it, requires such qualification; and (B) the execution, delivery and performance of the documents described in clause (i) of this Section 8.20 to which such Significant Subsidiary or its parent is a signatory have been duly authorized by all requisite corporate action (including any required shareholder approval), such documents have been duly executed and delivered and constitute valid and binding obligations of such Significant Subsidiary or its parent, as the case may be, enforceable against such Subsidiary or its parent in accordance with its terms, subject to the effect of 106 any applicable bankruptcy, moratorium, insolvency, reorganization or other similar law affecting the enforceability of creditors' rights generally and to the effect of general principles of equity which may limit the availability of equitable remedies (whether in a proceeding at law or in equity); and (ii) current copies of the charter and bylaws of such Significant Subsidiary, minutes of duly called and conducted meetings (or duly effected consent actions) of the Board of Directors (and, if required by such charter, bylaws or by applicable laws, of the shareholders) of such Significant Subsidiary and its parent authorizing the actions and the execution and delivery of documents described in clauses (i) and (ii) of this Section 8.20 and evidence satisfactory to the Agent (confirmation of the receipt of which will be provided by the Agent to the Lenders) that such Significant Subsidiary is Solvent as of such date and after giving effect to its Guaranty. (b) If at any time the sum of the total assets or total revenues of Subsidiaries that have not executed and delivered to the agent a Guaranty exceeds in the aggregate $2,000,000, TDC shall promptly cause there to be delivered to the Agent one or more additional Guaranties of Subsidiaries that do not constitute Significant Subsidiaries in order that after giving effect to such additional Guaranties, the sum of the total assets or total revenues, in either or both cases, of Subsidiaries not having delivered a Guaranty does not exceed in the aggregate $2,000,000. 107 ARTICLE IX Negative Covenants Until the Obligations have been paid and satisfied in full and this Agreement has been terminated in accordance with the terms hereof, unless the Required Lenders shall otherwise consent in writing, TDC will not, nor will it permit any Subsidiary to: 9.01 Asset Coverage Ratio. Permit at any time the Consolidated Asset Coverage Ratio to be less than 1.25 to 1.00. 9.02 Net Worth. Permit at any time Consolidated Tangible Net Worth to be less than the sum of (a) $270,000,000, plus (b) on a cumulative basis, (with no reduction for net losses during such period) 75% of Consolidated Net Income for each fiscal quarter beginning on April 30, 1996. In addition, after the date hereof, such minimum level of Consolidated Tangible Net Worth shall be increased by 100% of the net proceeds received by the Borrower from the sale of any shares of capital stock. 9.03 Indebtedness to Total Capital. Permit the ratio of Consolidated Funded Indebtedness to the Consolidated Total Capital to exceed .63 to 1.00 from the Closing Date through January 31, 1997 and .60 to 1.00 at any time thereafter. 9.04 EBIT to Interest Expense. Permit the ratio of Consolidated EBIT to Consolidated Interest Expense for the Four-Quarter Period immediately preceding the date of computation to be less than 2.50 to 1.00 at any time. 9.05 Lease Expense Ratio. Permit at any time the ratio of the (i) sum of Consolidated EBIT plus Consolidated Lease Expense for the Four-Quarter Period immediately preceding the date of computation to (ii) the sum of Consolidated Interest Expense plus Consolidated Lease Expense for the Four-Quarter Period immediately preceding the date of computation to be less than 2.00 to 1.00. 9.06 Indebtedness. Incur, create, assume or permit to exist any Indebtedness, howsoever evidenced, except (i) Indebtedness existing as of the date hereof which is set forth in Schedule 9.06 attached hereto; (ii) Indebtedness arising in connection with this Agreement; (iii) the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; (iv) Indebtedness incurred to purchase personal property provided such Indebtedness is secured only by the property so 108 acquired and does not exceed the actual cost of such property;provided that the total outstanding amount of all such Indebtedness shall not exceed at any time $15,000,000; (v) Indebtedness, including the Indebtedness permitted under clause (iv) of this Section 9.06, not exceeding in the aggregate amount at any time outstanding $50,000,000, so long as after giving effect thereto no Default or Event of Default exists hereunder; and (vi) any obligations arising under the Transfer and Administration Agreement. 9.07 Liens. Incur, create or permit to exist any pledge, Lien, charge or other encumbrance of any nature whatsoever with respect to any property or assets now owned or hereafter acquired by Borrower or any of its Subsidiaries, other than (i) Liens existing as of the date hereof which are set forth in Schedule 7.02(d) attached hereto; (ii) Liens on that equipment acquired with Indebtedness permitted under Section 9.06(iv) hereof; (iii) Liens on Receivables arising in connection with the Trade Receivable Purchase Facility; (iv) any unfiled lien of materialmen, mechanics, workmen, warehousemen, carriers, landlords or repairmen; provided that if such a lien shall be perfected and shall not be contested in good faith, it shall be discharged of record immediately by payment, bond or otherwise; (v) tax liens which are being contested in good faith, or which constitute liens for taxes the payment of which is not yet required; and (vi) easements, restrictions, defects in title, covenants and similar encumbrances in respect of real estate as do not render title thereto uninsurable or detract from or interfere in any material respect with the use of such property subject thereto in connection with the business of the Borrower or any of its Subsidiaries. 9.08 Transfer of Assets. Sell, lease, transfer or otherwise dispose of any item of property or asset except (i) sales, leases, transfers or other dispositions in the ordinary course of business, (ii) sales and dispositions of assets or property which are obsolete, worn out or no longer useful in Borrower's business, (iii) sales or transfers of receivables related to the Transfer and Administration Agreement, (iv) the inter-company transfer or sales of receivables, inventory or other assets to Subsidiaries who have guaranteed payment of the Obligations and (v) undeveloped real 109 property located in Clearwater, Florida and a contract for the acquisition of real property each of which shall be transferred to the Trustee and become subject to the TDC TROL. 9.09 Investments. Purchase, own, invest in or otherwise acquire, directly or indirectly, any stock or other securities, or make or permit to exist any interest whatsoever in any other Person or permit to exist any loans or advances to any Person; provided, TDC and its Subsidiaries may maintain investments or invest in (i) direct obligations of the United States of America or any agency or instrumentality thereof or obligations guaranteed by the United States of America or any agency or instrumentality thereof, provided that such obligations mature within one year from the date of acquisition thereof; (ii) demand deposits, time deposits or certificates of deposit issued by any of the Lenders or in certificates of deposit maturing within one year from the date of acquisition issued by a bank or trust company organized under the laws of the United States or any state thereof having capital surplus and undivided profits aggregating at least $400 million and being rated A-3 or better by Standard & Poors or A or better by Moody's Investors Services, Inc.; (iii) commercial paper rated A-1 or better by Standard & Poors or P-1 or better by Moody's Investors Services, Inc. (Commercial Paper Record); (iv) one or more Subsidiaries, all of the issued and outstanding capital stock of which is owned beneficially and of record by TDC or by a wholly-owned Subsidiary of TDC, created or acquired in compliance with the provisions of Section 8.22 hereof; (v) shares of capital stock owned by TDC and each Subsidiary as listed on Schedule 7.02(a); (vi) investments existing as of the date hereof which are set forth in Schedule 7.02(b) attached hereto; and (vii) loans by TDC or a wholly-owned Subsidiary of TDC to another wholly-owned Subsidiary of TDC or TDC. 9.10 Merger or Consolidation. (a) Consolidate with or merge into any other Person, or (b) permit any other Person to merge into TDC if after giving effect to the merger of any Person into TDC (i) a Default or Event of Default would exist under this Agreement or (ii) TDC is not the surviving entity. Any Subsidiary of TDC may merge with and into any other entity if the survivor is a Subsidiary of TDC. 110 9.11 Transactions with Affiliates. Enter into any transaction after the date hereof, including, without limitation, the purchase, sale, leasing or exchange of property, real or personal, or the rendering of any service, with any stockholder, officer or director of TDC or any Subsidiary (other than TDC or another Subsidiary), except (a) that directors, shareholders, officers and employees of TDC and the Subsidiaries may render services to TDC or the Subsidiaries for compensation at the same rates generally paid by corporations engaged in the same or similar businesses for the same or similar services and (b) in the ordinary course of and pursuant to the reasonable requirements of TDC's (or any Subsidiary's) business consistent with past practice of TDC and its Subsidiaries and upon fair and reasonable terms no less favorable to TDC (or any Subsidiary) than would be obtained in a comparable arm's-length transaction with a Person not a stockholder, officer or director. 9.12 ERISA. With respect to all employee pension benefit plans maintained by TDC or any Subsidiary: (i) terminate any of such employee pension benefit plans so as to incur any liability in excess of $500,000 to the Pension Benefit Guaranty Corporation established pursuant to ERISA or to any other Person exercising similar duties and functions under any Foreign Benefit Law; (ii) allow or suffer to exist any prohibited transaction involving any of such employee pension benefit plans or any trust created thereunder which would subject TDC or a Subsidiary to a tax or penalty or other liability (A) on prohibited transactions in excess of $500,000 imposed under Internal Revenue Code Section 4975 or ERISA or (B) under any Foreign Benefit Law; (iii) fail to pay to any such employee pension benefit plan any contribution which it is obligated to pay under the terms of such plan; (iv) allow or suffer to exist any accumulated funding deficiency, whether or not waived, with respect to any such employee pension benefit plan; (v) allow or suffer to exist any occurrence of a reportable event or any other event or condition, which presents a material risk of termination by the Pension Benefit Guaranty Corporation of any such employee pension benefit plan that is a Single Employer Plan, which termination could result in any liability (A) to the Pension Benefit Guaranty Corporation or (B) under any Foreign Benefit Law; or (vi) incur any withdrawal liability with respect to any Multi-employer Plan which is not fully funded. 111 9.13 Capital Expenditures. Make or become committed to make, directly or indirectly, for any Fiscal Year (on a non-cumulative basis, to the effect that expenditures permitted but not made in any Fiscal Year may not be made in any subsequent Fiscal Year) expenditures for fixed or capital assets (including, without limitation, Capital Leases) amounting in the aggregate for TDC and its Subsidiaries to more than $40,000,000 during any Fiscal Year. 9.14 Fiscal Year. Change its Fiscal Year. 9.15 Rate Hedging Obligations. Incur any Rate Hedging Obligations or enter into any agreements, arrangements, devices or instruments relating to Rate Hedging Obligations, except in regard to (i) Indebtedness evidenced by the Notes, the aggregate amount of such outstanding Rate Hedging Obligation in no event to exceed $290,000,000, provided, however, that the expiration or maturity date of such Rate Hedging Obligation or agreement or arrangement relating thereto, may not exceed the maturity date of the Notes; (ii) Indebtedness and obligations arising pursuant to the Trade Receivable Purchase Facility, the aggregate amount of such Rate Hedging Obligation not to exceed $300,000,000; (iii) existing Indebtedness to Aetna Life and Casualty Company secured by TDC's headquarters office building, all such Rate Hedging Obligations to be at rates, in form and with counterparties reasonably acceptable to the Agent and (iv) up to $55,000,000 of obligations arising under the TDC TROL. 9.16 Acquisition. (a) Enter into any agreement to acquire all or any part of the assets or equity securities of any Person unless such acquisition constitutes a Permitted Acquisition; and (b) Enter into any agreement to acquire all or any part of the assets or equity securities of any Person if the Cost of Acquisition of such assets or Person exceeds 25% of Consolidated Tangible Net Worth. 9.17 Transfer and Administration Agreement. Amend, modify or change the definition of Eligible Receivables as set forth in the Transfer and Administration Agreement as it exists on the Closing Date. 9.18 Existing TD France Subsidiaries. Permit any loan or advance to or additional investment in, the incurrence or existence of any Indebtedness or the creation of any Lien by, or the payment of any dividend or distribution to any shareholder or partner by, any Existing TD France Subsidiary, except TD France may make payments for services of employees of Existing TD France Subsidiaries rendered for the benefit of TD France. 9.19 Lease-Backs. Enter into any arrangements, directly or indirectly, with any Person whereby any of the Borrowers or its Subsidiaries shall sell or transfer any property, whether now owned or hereafter acquired, used or useful in their business, in 112 connection with the rental or lease of the property, so sold or transferred or of other property which the Borrowers or their Subsidiaries intend to use for substantially the same purpose or purposes as the property so sold or transferred except (i) the sale of undeveloped real property located in Clearwater, Florida, and (ii) property of the Borrowers and its Subsidiaries having a book value of not to exceed in the aggregate $5,000,000. 9.20 Dividends or Distributions. Declare or pay dividends (other than stock dividends) or make other stockholder distributions or purchases of its capital stock, or make any distribution of capital, cash or property to any stockholders or partners provided, however, that nothing in this Section 9.20 shall limit the right of TDC to purchase shares of its common stock for the purposes of making required contributions to its employee stock option plan so long as the aggregate dollar amount spent for such stock in any Fiscal Year does not exceed $5,000,000. 9.21 Negative Pledge. Except as set forth in Schedule 9.21, enter into any agreement whereby any Borrower or a Subsidiary limits its rights to impose any Lien or encumbrance on any of its assets. 113 ARTICLE X vents of Default and Acceleration 10.01 Evvents of Default. If any one or more of the following events (herein called "Events of Default") shall occur for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), that is to say: (a) if default shall be made in the due and punctual payment of the principal of any Loan or Reimbursement Obligation, when and as the same shall be due and payable whether pursuant to any provision of Article II or Article III hereof, at maturity, by acceleration or otherwise; or (b) if default shall be made in the due and punctual payment of any amount of interest on any Loan or Reimbursement Obligation or of any fees on the date on which the same shall be due and payable; or (c) if default shall be made in the performance or observance of any covenant set forth in Sections 8.07, 8.11 or Article IX hereof; or (d) if a default shall be made in the performance or observance of, or shall occur under, any covenant, agreement or provision contained in this Agreement or the Notes (other than as described in clauses (a), (b) or (c) above) and such default shall continue for 30 or more days after the earlier of receipt of notice of such default by the Authorized Representative from the Agent or any Borrower becomes aware of such default, or if a default shall be made in the performance or observance of, or shall occur under, any covenant, agreement or provision contained in any of the other Loan Documents or in any instrument or document evidencing or creating any obligation, guaranty, lien or security interest in favor of the Agent or Canadian Agent or delivered to any of the Lenders in connection with or pursuant to this Agreement or any of the Obligations (beyond any applicable grace period contained therein), or if any Loan Document ceases to be in full force and effect (other than by reason of any action by the Agent or any Lender), or if without the written consent of the Lenders, this Agreement or any other Loan Document shall be disaffirmed or shall terminate, be terminable or be terminated or become void or unenforceable for any reason whatsoever (other than in accordance with its terms in the absence of default or by reason of any action by the Agents or any Lender); or 114 (e) if a default shall occur, which is not waived, (i) in the payment of any principal, interest or premium with respect to any Indebtedness in an amount in excess of $500,000 (other than the Loans and Reimbursement Obligations) of TDC or any Subsidiary or (ii) in the performance, observance or fulfillment of any term or covenant contained in any agreement or instrument under or pursuant to which any such Indebtedness may have been issued, created, assumed, guaranteed or secured by TDC or any Subsidiary, and such default shall continue for more than the period of grace, if any, therein specified, or if such default shall permit the holder of any such Indebtedness to accelerate the maturity thereof; or (f) if any representation, warranty or other statement of fact contained herein or in any writing, certificate, report or statement at any time furnished to either of the Agents or any Lender by or on behalf of TDC or any Subsidiary pursuant to or in connection with this Agreement, or otherwise, shall be false or misleading in any material respect when given; or (g) if TDC or any Subsidiary shall be unable to pay its debts generally as they become due; file a petition to take advantage of any insolvency statute; make an assignment for the benefit of its creditors; commence a proceeding for the appointment of a receiver, trustee, liquidator or conservator of itself or of the whole or any substantial part of its property; file a petition or answer seeking receivership, liquidation, reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state or similar law of any other country or province thereof; or (h) if a court of competent jurisdiction shall enter an order, judgment or decree appointing a custodian, receiver, trustee, liquidator or conservator of TDC or any Subsidiary or of the whole or any substantial part of its properties, or approve a petition filed against TDC or any Subsidiary seeking receivership, liquidation, reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state or similar law of any other country or province thereof; or if, under the provisions of any other law for the relief or aid of debtors, a court of competent jurisdiction shall assume custody or control of TDC or any Subsidiary or of the whole or any substantial part of its properties; or if there is commenced against TDC or any Subsidiary any proceeding or petition seeking receivership, liquidation, reorganization, arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state or similar law of any other country or province thereof, which proceeding or petition remains undismissed for a period of 90 days; or if 115 TDC or any Subsidiary takes any action to indicate its consent to or approval of any such proceeding or petition; or (i) if (i) any judgment where the amount not covered by insurance (or the amount as to which the insurer denies liability) is in excess of $500,000 is rendered against TDC or any Subsidiary, or (ii) there is any attachment, injunction or execution against any of TDC's or any Subsidiary's properties for any amount in excess of $500,000; and such judgment, attachment, injunction or execution remains unpaid, unstayed or undismissed for a period of sixty (60) days; or (j) if TDC or any Subsidiary shall, other than in the ordinary course of business (as determined by past practices), suspend all or any part of its operations material to the conduct of the business of TDC and the Subsidiaries, taken as a whole; or (k) if (i) TDC or any Subsidiary shall engage in any prohibited transaction (as described in Section 9.12(ii) hereof) involving any employee pension benefit plan of TDC or any Subsidiary, (ii) any accumulated funding deficiency (as referred to in Section 9.12(iv) hereof), whether or not waived, shall exist with respect to any Single Employer Plan, (iii) a reportable event (as referred to in Section 9.12(v) hereof) (other than a reportable event for which the statutory notice requirement to the Pension Benefit Guaranty Corporation has been waived by regulation) shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed to administer or to terminate, any Single Employer Plan, which reportable event or institution or proceedings is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Single Employer Plan for purposes of Title IV of ERISA, and in the case of such a reportable event, the continuance of such reportable event shall be unremedied for thirty (30) days after notice of such reportable event pursuant to Section 4043(a), (c) or (d) of ERISA is given, as the case may be, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) TDC or any Subsidiary shall withdraw from a Multi-employer Plan for purposes of Title IV of ERISA, and, as a result of any such withdrawal, TDC or any Subsidiary shall incur withdrawal liability to such Multi-employer Plan, or (vi) any other event or condition shall occur or exist; and in each case in clauses (i) through (vi) of this Section 10.01(k), such event or condition, together with all other such events or conditions, if any, could subject TDC or any Subsidiary to any tax, penalty or other liabilities in the aggregate material in relation to the business, operations, property or financial or other condition of TDC and the Subsidiaries, taken as a whole, and in each such case the event or condition is not remedied to the satisfaction of the Required Lenders within ninety (90) days after the earlier of 116 (i) receipt of notice of such event or condition by the Authorized Representative from the Agent or (ii) TDC becomes aware of such event or condition; or (l) if TDC or any Subsidiary shall breach any of the terms or conditions of any agreement under which any Rate Hedging Obligation permitted pursuant to Section 9.15 is created and such breach shall continue beyond any grace period, if any relating thereto pursuant to the terms of such Obligation; or TDC shall disaffirm or seek to disaffirm any such agreement or any of its obligations thereunder; or (m) if a Termination Event (as defined in the Transfer and Administration Agreement) shall occur under the Transfer and Administration Agreement which Termination Event is not cured or waived; (n) if there shall occur any Change of Control of TDC or any Significant Subsidiary; or (o) if there shall occur any event of default under the TDC TROL, which is not cured within any grace period; then, and in any such event and at any time thereafter, if such Event of Default or any other Event of Default shall then be continuing, (A) either or both of the following actions may be taken: (i) the Agent, with the consent of the Required Lenders, may, and at the direction of the Required Lenders shall, declare any obligation of the Lenders to make further Loans or issue Letters of Credit or Acceptances terminated, whereupon the obligation of each Lender to make further Loans or issue Letters of Credit or Acceptances, hereunder shall terminate immediately, and (ii) the Agent shall at the direction of the Required Lenders, at their option, declare by notice to the Borrowers any or all of the Obligations to be immediately due and payable, and the same, including all interest accrued thereon and all other obligations of the Borrowers to the Lenders, shall forthwith become immediately due and payable without presentment, demand, protest, notice or other formality of any kind, all of which are hereby expressly waived, anything contained herein or in any instrument evidencing the Obligations to the contrary notwithstanding; provided, however, that notwithstanding the above, if there shall occur an Event of Default under clause (g) or (h) above, then the obligation of the Lenders to lend hereunder shall automatically terminate and any and all of the Obligations shall be immediately due and payable without the necessity of any action by the Agent or the Required Lenders or notice to the Agent or the Lenders; and 117 (B) Borrowers shall, upon demand of Agent deposit cash with the Agent in an amount equal to the amount of any Letters of Credit and Acceptances remaining undrawn or unpaid, as collateral security for the repayment of any future drawings or payments under such Letters of Credit and Acceptances, and Borrowers shall forthwith deposit and pay such amounts and such amounts shall be held by Agent pursuant to the terms of the LC/Acceptance Account Agreement; 10.02 Agent to Act. In case any one or more Events of Default shall occur and be continuing, the Agent and the Canadian Agent may, and at the direction of the Required Lenders shall, proceed to protect and enforce their rights or remedies either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, agreement or other provision contained herein or in any other Loan Document, or to enforce the payment of the Obligations or any other legal or equitable right or remedy. 10.03 Cumulative Rights. No right or remedy herein conferred upon the Lenders or the Agents is intended to be exclusive of any other rights or remedies contained herein or in any other Loan Document, and every such right or remedy shall be cumulative and shall be in addition to every other such right or remedy contained herein and therein or now or hereafter existing at law or in equity or by statute, or otherwise. 10.04 No Waiver. No course of dealing between the Borrowers and any Lender or the Agents or any failure or delay on the part of any Lender or the Agents in exercising any rights or remedies hereunder shall operate as a waiver of any rights or remedies hereunder and no single or partial exercise of any rights or remedies hereunder shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or of the same right or remedy on a future occasion. 10.05 Default. The Agent and the Lenders shall have no right to accelerate any of the Loans upon the occurrence of any Default which shall not also constitute an Event of Default; provided, however, nothing contained in this sentence shall in any respect impair or adversely affect the right, power and authority of the Agent and the Lenders (i) to take any action expressly required or permitted to be taken under the Loan Documents upon the occurrence of any Default (and including any action or proceeding which the Agent may determine to be necessary or appropriate in furtherance of any such expressly authorized action) and (ii) to take any action provided under the Loan Documents or otherwise available by statute, at law or in equity upon the occurrence of any Default. 10.06 Allocation of Proceeds. If an Event of Default has occurred and is continuing, and the maturity of the Notes has been accelerated pursuant to Article X hereof, all payments received by 118 the Agent or the Canadian Agent, or both, hereunder in respect of any principal of or interest on the Obligations or any other amounts payable by the Borrowers hereunder shall be applied by the Agent or Canadian Agent in the following order: (i) amounts due to the Agents, the Lenders, NationsBank and CIBC pursuant to Sections 2.10, 2.22, 3.09, 3.17, 8.16, 12.06 and 12.13 hereof; (ii) amounts due to (A) NationsBank pursuant to Section 2.23, (B) CIBC pursuant to Section 3.18, and (C) the Agent pursuant to Section 11.11 hereof; (iii) payments of interest on Loans, to be applied for the ratable benefit of the Lenders, without distinction or preference as between Canadian Loans and Domestic Loans; (iv) payments of principal on Loans, to be applied for the ratable benefit of the Lenders, without distinction or preference as between Canadian Loans and Domestic Loans; (v) payment of cash amounts to the Agent for deposit to the Borrower's Account pursuant to Section 10.01(B) hereof; (vi) payment of Obligations owed Lenders pursuant to Swap Agreements on a pro rata basis according to amounts owed; and (vii) payments of all other amounts due under this Agreement and the other Loan Documents, if any, to be applied in accordance with each Lender's pro rata share of all principal due to the Lenders without distinction or preference as between Canadian Loans and Domestic Loans. 119 ARTICLE XI The Agents 11.01 Appointment. Each Lender (including NationsBank in its capacity as maker of Swing Line Loans and NationsBank and CIBC in their respective capacities as issuers of the Letters of Credit and Acceptances) hereby irrevocably designates and appoints NationsBank as the Agent of the Lenders and CIBC as Canadian Agent for the Canadian Facilities Lenders under this Agreement, and each of the Lenders hereby irrevocably authorizes NationsBank as the Agent and CIBC as Canadian Agent for such Lender, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers as are expressly delegated to the Agent and Canadian Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. The Agent and Canadian Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any of the Lenders, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Agent and Canadian Agent. 11.02 Attorneys-in-fact. The Agent and Canadian Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent and Canadian Agent shall not be responsible for the gross negligence or willful misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 11.03 Limitation on Liability. Neither of the Agents nor any of their officers, directors, employees, agents or attorneys-in-fact shall be liable to the Lenders for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement except for its or their own gross negligence or willful misconduct. Neither of the Agents nor any of their affiliates shall be responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by TDC, any of its Subsidiaries, or any officer or representative thereof contained in this Agreement or in any of the other Loan Documents, or in any certificate, report, statement or other document referred to or provided for in or received by either of the Agents under or in connection with this Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any of the other Loan Documents, or for any failure of any Borrower or any Subsidiary to perform its obligations thereunder. The Agents shall not be under any obligation to any of the Lenders to ascertain or to inquire as to the observance or performance of any of the terms, covenants or conditions of this Agreement or any of the other Loan Documents on the part of any Borrower or any Subsidiary or to inspect the properties, books or records of TDC or its Subsidiaries. 120 11.04 Reliance. The Agents shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent certificate, affidavit, letter, cablegram, telegram, telecopy or telex message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to TDC or any Subsidiary), independent accountants and other experts selected by the Agent. The Agents may deem and treat the payee of any Note as the owner thereof for all purposes unless an Assignment and Acceptance shall have been filed with and accepted by the Agent. Each of the Agents shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first receive advice or concurrence of the Lenders or the Required Lenders as provided in this Agreement or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agents shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all present and future holders of the Notes. 11.05 Notice of Default. The Agents shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Agent has received notice from a Lender, an Authorized Representative or a Borrower or any of the Subsidiaries referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Agent receives such notice, the Agent shall promptly give notice thereof to the Lenders. The Agents shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided that, unless and until the Agents shall have received such directions, the Agents may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable in the best interests of the Lenders. 11.06 No Representations. Each Lender expressly acknowledges that neither the Agents nor any of their affiliates has made any representations or warranties to it and that no act by either of the Agents hereafter taken, including any review of the affairs of TDC or any of its Subsidiaries, shall be deemed to constitute any representation or warranty by either of the Agents to any Lender. Each Lender represents to the Agents that it has, independently and without reliance upon either of the Agents or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the financial condition, creditworthiness, affairs, status and nature of TDC and its Subsidiaries and made its own decision to enter into 121 this Agreement. Each Lender also represents that it will, independently and without reliance upon either of the Agents or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and to make such investigation as it deems necessary to inform itself as to the status and affairs, financial or otherwise, of TDC and its Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Agents hereunder, the Agents shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of TDC or any of its Subsidiaries which may come into the possession of the Agent or any of its affiliates. 11.07 Indemnification. The Lenders agree to indemnify the Agents in their capacity as such (to the extent not reimbursed by TDC or any of its Subsidiaries and without limiting any obligations of TDC or any of its Subsidiaries so to do), ratably according to their respective Applicable Commitment Percentages as then in effect (determined in the aggregate by treating the Domestic Revolving Credit Facility and the Canadian Revolving Credit Facility as a single credit facility for this purpose) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may at any time (including without limitation at any time following the payment of the Note) be imposed on, incurred by or asserted against either of the Agents in any way relating to or arising out of this Agreement or any other document contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by either of the Agents under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from either of the Agents' gross negligence or willful misconduct. The agreements in this subsection shall survive the payment of the Obligations and the termination of this Agreement. 11.08 Lender. The Agents and their affiliates may make loans to, accept deposits from and generally engage in any kind of business with TDC and its Subsidiaries as though it were not the Agent hereunder. With respect to its Loans made or renewed by it and any Note issued to it, the Agents shall have the same rights and powers under this Agreement as any Lender and may exercise the same as though it were not the Agent, and the terms "Lender" and "Lenders" shall, unless the context otherwise indicates, include the Agent in its individual capacity. 11.09 Resignation. If either of the Agents shall resign as an Agent under this Agreement, then the Required Lenders may appoint a successor Agent or Canadian Agent, as the case may be, 122 for the Lenders (and so long as no Default or Event of Default exists, a successor acceptable to the Borrower), which, in the case of the Agent, shall be a commercial bank organized or licensed under the laws of the United States or any state thereof, and, in the case of the Canadian Agent, shall be a bank organized under the laws of Canada or a province thereof, having a combined surplus and capital of not less than $500,000,000, whereupon such successor Agent or Canadian Agent, as the case may be, shall succeed to the rights, powers and duties of the former Agent and the obligations of the former Agent shall be terminated and canceled, without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement; provided, however, that the former Agent's resignation shall not become effective until such successor Agent has been appointed; provided, further, if the Required Lenders (and so long as no Default or Event of Default has occurred, the Borrower) cannot agree as to a successor Agent within ninety (90) days after such resignation, the Agent or Canadian Agent, as the case may be, shall appoint a successor Agent and the parties hereto agree to execute whatever documents are necessary to effect such action under this Agreement or any other document executed pursuant to this Agreement; provided, however in such event all provisions of this Agreement and the Loan Documents, shall remain in full force and effect. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article XI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. 11.10 Sharing of Payments, etc. Subject to the provisions of Section 10.06, each Lender agrees that if it shall, through the exercise of a right of banker's lien, set-off, counterclaim or otherwise, obtain payment with respect to its Obligations which results in its receiving more than its pro rata share of the aggregate payments with respect to all of the Obligations which are to be paid to any group of Lenders on a pro rata or ratable basis, then (A) such Lender shall be deemed to have simultaneously purchased from the other Lenders a share in their Obligations so that the amount of the Obligations held by each of the Lenders shall be pro rata and (B) such other adjustments shall be made from time to time as shall be equitable to insure that the Lenders share such payments ratably; provided, however, that for purposes of this Section 11.10 the term "pro rata" shall be determined with respect to both the Canadian Revolving Credit Commitment or Domestic Revolving Credit Commitment, as applicable, of each Lender and to the Total Canadian Revolving Credit Commitment or Total Domestic Revolving Credit Commitment, as applicable, after subtraction in each case of amounts, if any, by which any such Lender has not funded its share of the outstanding Loans and Reimbursement Obligations. If all or any portion of any such excess payment is thereafter recovered from the Lender which received the same, the purchase provided in this Section 11.10 shall be rescinded to the extent of such recovery, without interest. The Borrowers expressly consent to the foregoing arrangements and agree that each Lender so purchasing a portion of the other Lenders' Obligations may exercise 123 all rights of payment (including, without limitation, all rights of set-off, banker's lien or counterclaim) with respect to such portion as fully as if such Lender were the direct holder of such portion. 11.11 Fees. The Borrowers agree to pay to each of the Agents, for its individual account, an annual Agent's fee pursuant to the terms of fee letters dated as of the date hereof among the Borrowers and the Agents. Such fees shall be paid in quarterly installments in advance on the last day of each January, April, July and October, the first such installment to be paid on the Closing Date. 124 ARTICLE XII Miscellaneous 12.01 Assignments and Participations (a) At any time after the Closing Date each or any Lender may, with the prior consent of the Agent and, so long as no Event of Default exists hereunder, the Borrower, assign to one or more banks or financial institutions all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of the Notes payable to its order); provided, that (i) each such assignment of rights and obligations in the Canadian Facilities or the Multicurrency Facilities, respectively, shall be of a constant, and not a varying, percentage of all of the assigning Lender's rights and obligations (including Loans and Participations) under this Agreement with respect to the Canadian Facilities or the Multicurrency Facilities, as applicable, (ii) for each assignment involving the issuance and transfer of a Note, the assigning Lender shall execute an Assignment and Acceptance and the Borrowers hereby consent to execute as appropriate replacement Notes to give effect to the assignment, (iii) each Canadian Facilities Lender must also be a Multicurrency Facilities Lender after giving effect to any assignment hereunder, (iv) the minimum Canadian Revolving Credit Commitment or Domestic Revolving Credit Commitment which shall be assigned is $10,000,000 (together with which the assigning Lender's applicable portion of Participations and the Canadian Letter of Credit Commitment or Domestic Letter of Credit Commitment, as applicable, shall also be assigned) and (v) such assignee shall have an office located in the United States, provided, that an assignment by NationsBank shall not include any portion of the Swing Line. Upon such execution, delivery, approval and acceptance, from and after the effective date specified in each Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder or under such Notes have been assigned or negotiated to it pursuant to such Assignment and Acceptance have the rights and obligations of a Lender hereunder and a holder of such Notes and (y) the assignor thereunder shall, to the extent that rights and obligations hereunder or under such Notes have been assigned or negotiated by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement. No assignee shall have the right to further assign its rights and obligations pursuant to this Section 12.01. Any Lender who makes an assignment shall pay to the Agent a one-time administrative fee of $3,500.00 which fee shall not be reimbursed by the Borrowers. (b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) the assignment made under such Assignment and Acceptance is made under such Assignment and Acceptance without 125 recourse against the assignor; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of TDC or any Subsidiary or the performance or observance by TDC or any Subsidiary of any of its obligations under any Loan Document or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements most recently made available whether pursuant to Section 7.02(c) or Section 8.01 and such other Loan Documents and other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement, the Notes and the other Loan Documents as are delegated to the Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender and a holder of such Notes. (c) The Agent shall maintain at its address referred to herein a copy of each Assignment and Acceptance delivered to and accepted by it. (d) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender, the Agent shall give prompt notice thereof to the Borrowers. (e) Each Lender may sell participations to one or more banks or other entities as to all or a portion of its rights and obligations under this Agreement; provided, that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any Note issued to it for the purpose of this Agreement, (iv) such participations shall be in a minimum amount of $2,500,000 and shall include an allocable portion of such Lender's Participation, and (v) the Borrowers, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and with regard to any and all payments to be made under this Agreement; provided, that the participation agreement between a Lender and its participants may provide that such Lender will obtain the approval of such participant prior to such Lender's agreeing to any amendment or waiver of any provisions of this Agreement which would (A) extend the maturity of any Note, (B) reduce the interest rate hereunder, or (C) increase the Canadian 126 Revolving Credit Commitment or Domestic Revolving Credit Commitment of the Lender granting the participation other than as permitted by Section 2.11 or Section 3.10, and (vi) the sale of any such participations which require any Borrower to file a registration statement with the United States Securities and Exchange Commission or under the securities regulations or laws of any state shall not be permitted. (f) Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, any Lender may assign all or any portion of its rights and obligations under the Loan Documents and the Notes to any affiliate of such Lender, and any Lender may pledge all or any portion of its interest under the Loan Documents and the Notes to the members of the Federal Reserve Bank as security for obligations of such Lender to the Board, without the consent of the Borrower, the Agent or any other Lender and without the payment of the administrative fee referred to in Section 12.01(a) so long as such assignment does not result in any withholding tax or other increased cost for the Borrowers. 12.02. Notices Any notice shall be conclusively deemed to have been received by any party hereto and be effective on the day on which delivered to such party (against receipt therefor) at the address set forth below or such other address as such party shall specify to the other parties in writing (or, in the case of telephonic notice or notice by telecopy, telegram or telex (where the receipt of such message is verified by return) expressly provided for hereunder, when received at such telephone, telecopy or telex number as may from time to time be specified in written or verbal notice to the other parties hereto or otherwise received), or if sent prepaid by certified or registered mail return receipt requested on the third Business Day after the day on which mailed, addressed to such party at said address: (a) if to any Borrower: Tech Data Corporation 5350 Tech Data Drive Clearwater, Florida 34620 Attention: Chief Financial Officer Telefacsimile: 813-538-5860 Telephone: 813-538-7825 (b) if to the Authorized Representative: at the address set forth for receipt of notices in the notice of appointment thereof. 127 (c) if to the Agent: NationsBank, National Association 901 Main Street, 67th Floor Dallas, Texas 75202 Attention: Yousuf Omar/Lori Stone Telefacsimile: 214-508-0980 Telephone: 214-508-3347 with a copy to: NationsBank, National Association Independence Center Charlotte, North Carolina 28255 Attention: Agency Services Telefacsimile: 704-386-9923 Telephone: 800-788-7125 (d) if to NationsBank in its capacity as issuer of the Domestic Letters of Credit or Domestic Acceptances: NationsBank, National Association 901 Main Street, 9th Floor Dallas, Texas 75202 Attention: Alan Hanna, Letter of Credit Department Telefacsimile: 214-508-1814 Telephone: 214-508-3606 (e) if to the Canadian Agent: Canadian Imperial Bank of Commerce Head Office Commerce Court West, 7th Floor Toronto Ontario M5L 1A2 Attention: Manager Agent Administration Telefacsimile: 416-980-5151 Telephone: 416-980-4077 (f) If to CIBC in its capacity as issuer of the Canadian Letters of Credit or Canadian Acceptances: Canadian Imperial Bank of Commerce Corporate Client Support Center Commerce Court West, 50th Floor Toronto, Ontario M5L 1A2 Attention: Associate Telefacsimile: 416-980-5855 Telephone: 416-214-8417 128 (g) if to the Lenders: At the addresses set forth on the signature pages hereof and on the signature page of each Assignment and Acceptance (h) if to any other Subsidiary signatory to a Guaranty, at the address of such Subsidiary provided in such Guaranty. 12.03 No Waiver. No failure or delay on the part of the Agent or any Lender in the exercise of any right, power or privilege hereunder shall operate as a waiver of any such right, power or privilege nor shall any such failure or delay preclude any other or further exercise thereof. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. 12.04 Setoff. Each Borrower agrees that the Agents and each Lender shall have a right of setoff for all the Obligations of such Borrower against all deposits or deposit accounts, of any kind, or any interest in any deposits or deposit accounts thereof, now or hereafter pledged, mortgaged, transferred or assigned to the Agent or such Lender or otherwise in the possession or control of the Agents or such Lender (other than for safekeeping or collateral accounts for other Persons) for any purpose for the account or benefit of such Borrower and including any balance of any deposit account or of any credit of such Borrower with either of the Agents or such Lender, whether now existing or hereafter established, hereby authorizing the Agents and each Lender at any time or times with or without prior notice to apply such balances or any part thereof to such of the Obligations of such Borrower to the Lenders then past due and in such amounts as they may elect, and whether or not the collateral or the responsibility of other Persons primarily, secondarily or otherwise liable may be deemed adequate. For the purposes of this paragraph, all remittances and property shall be deemed to be in the possession of the Agent or such Lender as soon as the same may be put in transit to it by mail or carrier or by other bailee. 12.05 Survival. All covenants, agreements, representations and warranties made herein shall survive the making by the Lenders of the Loans and the expiration of the Letters of Credit and Acceptances and the execution and delivery to the Lenders of this Agreement and the Notes and shall continue in full force and effect so long as any of Obligations remain outstanding or any Lender has any commitment hereunder. Whenever in this Agreement, any of the parties hereto is referred to, such reference shall be deemed to include the successors and permitted assigns of such party and all covenants, provisions and agreements by or on behalf of the Borrower which are contained in this Agreement and the Notes shall inure to the benefit of the successors and permitted assigns of the 129 Lenders or any of them. No Borrower shall assign any of its rights or obligations hereunder without the consent of all Lenders. 12.06 Expenses. The Borrowers jointly and severally agree (a) to pay or reimburse the Agents for all its reasonable and customary out-of-pocket costs and expenses (including travel and copy expenses) incurred in connection with the preparation, negotiation and execution of, and any amendment, supplement or modification to, this Agreement or any of the other Loan Documents, and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the reasonable and customary fees and disbursements of counsel to the Agents, (b) to pay or reimburse the Agents and the Lenders for all their costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, including without limitation, the reasonable fees and disbursements of their counsel, (c) to pay, indemnify and hold the Agents and the Lenders harmless from any and all recording and filing fees and any and all liabilities with respect to, or resulting from any failure to pay or delay in paying, documentary, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation of any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, and (d) to pay, indemnify, and hold the Agents and the Lenders harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement or in any respect relating to the transactions contemplated hereby or thereby, (all the foregoing, collectively, the "indemnified liabilities"); provided, however, that the Borrowers shall have no obligation hereunder with respect to indemnified liabilities arising from (i) the willful misconduct or gross negligence of the party seeking indemnification, (ii) legal proceedings commenced against either of the Agents or any Lender by any security holder or creditor thereof arising out of and based upon rights afforded any such security holder or creditor solely in its capacity as such, (iii) any taxes imposed upon either of the Agents or any Lender other than the documentary, stamp, excise and similar taxes described in clause (c) above or any tax resulting from any Regulatory Change, which tax would be payable to Lenders by any Borrower pursuant to Article IV hereof, (iv) taxes imposed as a result of a transfer or assignment of any Note, participation or assignment of a portion of its rights or (v) any taxes imposed upon any transferee of any Note. The agreements in this subsection shall survive repayment of the Notes and all other Obligations hereunder. 12.07 Amendments. No amendment, modification or waiver of any provision of this Agreement or any of the Loan Documents and no consent by the Lenders to any departure therefrom by any Borrower shall be effective unless such amendment, modification or waiver 130 shall be in writing and signed by the Agent, but only upon having received the written consent of the Required Lenders, and the same shall then be effective only for the period and on the conditions and for the specific instances and purposes specified in such writing; provided, however, that, no such amendment, modification or waiver (i) which changes, extends or waives any provision of Section 11.10 or this Section 12.07, the amount of or the due date of any scheduled installment of or the rate of interest payable on any Obligation, changes the definition of Required Lenders, which increases or extends the Canadian Revolving Credit Commitment or Domestic Revolving Credit Commitment of any Lender or which increase or extends the Canadian Letter of Credit Facility or the Domestic Letter of Credit Facility or the maximum amount of Competitive Bid Loans or which waives any condition to the making of any Loan shall be effective unless in writing and signed by each of the Lenders; provided, however, the Required Lenders may in their sole discretion waive any Default or Event of Default (other than any Event of Default under Section 10.01(a) or (b)); (ii) which releases a Borrower or any Subsidiary from its Guaranty (other than in accordance with the terms of the Loan Documents) shall be effective unless with the written consent of each of the Lenders; (iii) which affects the rights, privileges, immunities or indemnities of the Agent, shall be effective unless in writing and signed by the Agent; or (iv) which affects the rights, privileges, immunities or indemnities of NationsBank or CIBC as maker of Swing Line Loans, issuer of Letters of Credit and issuer of Acceptances, as applicable, shall be effective unless with the written consent of NationsBank or CIBC, as applicable. Notwithstanding any provision of the other Loan Documents to the contrary, as between the Agent and the Lenders, execution by the Agent shall not be deemed conclusive evidence that the Agent has obtained the written consent of the Required Lenders. No notice to or demand on any Borrower in any case shall entitle such Borrower to any other or further notice or demand in similar or other circumstances, except as otherwise expressly provided herein. No delay or omission on any Lender's or the Agent's part in exercising any right, remedy or option shall operate as a waiver of such or any other right, remedy or option or of any Default or Event of Default. 12.08 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and it shall not be 131 necessary in making proof of this Agreement to produce or account for more than one such fully-executed counterpart. 12.09 Waivers by Borrowers. In any litigation in any court with respect to, in connection with, or arising out of this Agreement, the Loans, any of the Notes, any of the other Loan Documents, the Obligations, or any instrument or document delivered pursuant to this Agreement, or the validity, protection, interpretation, collection or enforcement thereof, or any other claim or dispute howsoever arising between the Borrower and the Lenders or the Agent, (i) each Borrower hereby waives the right to interpose any setoff, recoupment, counterclaim or cross-claim in connection with any such litigation, irrespective of the nature of such setoff, recoupment, counter-claim or cross-claim unless such setoff, recoupment, counter-claim or cross-claim could not, by reason of any applicable federal, state or province procedural laws, be interposed, pleaded or alleged in any other action and (ii) the Borrower and each Lender and the Agent hereby, to the maximum extent permitted by applicable law, waive trial by jury in connection with any such litigation. 12.10 Termination. The termination of this Agreement shall not affect any rights of the Borrowers, the Lenders or the Agents or any obligation of any Borrower, the Lenders or either of the Agents, arising prior to the effective date of such termination, and the provisions hereof shall continue to be fully operative until all transactions entered into or rights created or obligations incurred prior to such termination have been fully disposed of, concluded or liquidated and the Obligations arising prior to or after such termination have been irrevocably paid in full. The rights granted to the Agents for the benefit of the Lenders hereunder and under the other Loan Documents shall continue in full force and effect, notwithstanding the termination of this Agreement, until all of the Obligations have been paid in full after the termination hereof or the Borrowers have furnished the Lenders and the Agent with an indemnification satisfactory to the Agents and each Lender with respect thereto. All representations, warranties, covenants, waivers and agreements contained herein shall survive termination hereof until payment in full of the Obligations unless otherwise provided herein. Notwithstanding the foregoing, if after receipt of any payment of all or any part of the Obligations, any Lender is for any reason compelled to surrender such payment to any Person because such payment is determined to be void or voidable as a preference, impermissible setoff, a diversion of trust funds or for any other reason, this Agreement shall continue in full force and the Borrowers shall be liable to, and shall indemnify and hold such Lender harmless for, the amount of such payment surrendered until such Lender shall have been finally and irrevocably paid in full. The provisions of the foregoing sentence shall be and remain effective notwithstanding any contrary action which may have been taken by the Lenders in reliance upon such payment, and any such contrary action so taken shall be without prejudice to the Lenders' rights under this 132 Agreement and shall be deemed to have been conditioned upon such payment having become final and irrevocable. 12.11 Governing Law (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE LOAN DOCUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE. NOTWITHSTANDING THE FOREGOING, TO THE EXTENT THAT ANY ACTION, SUIT OR PROCEEDING IS BROUGHT AGAINST TD CANADA WITHIN CANADA, THEN THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN. (b) EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTIES OF PINELLAS OR HILLSBOROUGH, STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING. (c) EACH BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER PROVIDED IN SECTION 12.02, ATTENTION GENERAL COUNSEL OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA. (d) NOTHING CONTAINED IN SUBSECTIONS (a) OR (b) HEREOF SHALL PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION WHERE ANY BORROWER OR ANY BORROWER'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW. 133 12.12 Representation and Warranty of the Lenders. Each Lender hereby represents that no part of any funds used by such Lender to fund any Loan or other extension of credit to the Borrowers made by it constitutes or will constitute assets allocated to any "separate account" maintained by such Lender. As used herein, the term "separate account" shall have the meaning assigned to such term in Section 3 of ERISA. 12.13 Idemnification. In consideration of the execution and delivery of this Agreement by the Agents and each Lender and the extension of the Canadian Facilities and the Multicurrency Facilities, each Borrower hereby jointly and severally indemnifies, exonerates and holds the Agent, the Canadian Agent and each Lender 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 (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 Loan or supported by any Letter of Credit or Acceptance; (b) the entering into and performance of this Agreement and any other Loan Document by any of the Indemnified Parties; (c) 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 TDC or any of its Subsidiaries of any Hazardous Material; or (d) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or releases from, any real property owned or operated by TDC or any Subsidiary thereof 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, TDC or such Subsidiary, 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, and if and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrowers hereby agree to make the maximum contribution to the payment and satisfaction of each of 134 the Indemnified Liabilities which is permissible under applicable law. 12.14 Agreement Controls. In the event that any term of any of the Loan Documents other than this Agreement conflicts with any term of this Agreement, the terms and provisions of this Agreement shall control. 12.15 Severability. If any provision of this Agreement or the other Loan Documents shall be determined to be illegal or invalid as to one or more parties hereto, then such provision shall remain in effect with respect to all parties, if any, as to whom such provision is neither illegal nor invalid, and in any event all other provisions hereof shall remain effective and binding on the parties hereto. 135 IN WITNESS WHEREOF, the parties hereto have caused this instrument to be made, executed and delivered by their duly authorized officers as of the day and year first above written. WITNESS: TECH DATA CORPORATION /S/ R. MALLOY MCKEITHEN - ----------------------- /S/ WADE M. ZERREDY /S/ JEFFERY P. HOWELLS _______________________ By:_____________________________ Name: Jeffery P. Howells Title: Senior Vice President of Finance and Chief Financial Officer WITNESS: TECH DATA FRANCE, S.N.C. /S/ R. MALLOY MCKEITHEN - ----------------------- /S/ WADE M ZERREDY /S/ JEFFERY P. HOWELLS _______________________ By:_______________________________ Name: Jeffery P. Howells Title: Managing Director WITNESS: TECH DATA CANADA INC. /S/ R. MALLOY MCKEITHEN - ----------------------- /S/ WADE M. ZERREDY /S/ JEFFERY P. HOWELLS _______________________ By:_______________________________ Name: Jeffery P. Howells Title: Secretary and Chief Financial Officer 136 NATIONSBANK, NATIONAL ASSOCIATION, as Agent for the Lenders /S/ NANCY J. PEARSON By:______________________________ Name: Nancy J. Pearson Title: Senior Vice President NATIONSBANK, NATIONAL ASSOCIATION /S/ NANCY J. PEARSON By:_______________________________ Name: Nancy J. Pearson Title: Senior Vice President Lending Office: NationsBank Plaza 901 Main Street, 67th Floor Dallas, Texas 75202 Wire Transfer Instructions: NationsBank, National Association Dallas, Texas ABA# 111000025 Reference Tech Data Corporation Attention: Corporate Credit Support Account No.: 136621-2163 137 CIBC INC., as Domestic Facilities Lender /S/ KIM FEDERKING By:_______________________________ Name: Kim Federking Title: Director Lending Office: Corporate Client Support Center Commerce Court West, 50th Floor Toronto, Ontario M5L 1A2 Wire Transfer Instruction: Corporate Client Support Centre Canadian Imperial Bank of Commerce Transit #00002 Swiftcode-CIBCCATT CCSC Suspense Account Number: Cdn$ 09-55515 US$ 05-42016 Attention: Jennie Harris CANADIAN IMPERIAL BANK OF COMMERCE as Canadian Agent /S/ M. WARREN LOBO By:_______________________________ Name: M. Warren Lobo Title: Associate CANADIAN IMPERIAL BANK OF COMMERCE as Canadian Facilities Lender /S/ MAURO SPAGNOLO By:_______________________________ Name: Mauro Spagnolo Title: Director 138 NBD BANK /S/ RICHARD C. ELLIS By:________________________________ Name: Richard C. Ellis Title: Vice President Lending Office: 611 Woodward Avenue Detroit, Michigan 48226 Wire Transfer Instructions: NBD Bank Detroit, Michigan ABA# 072000326 Reference: Tech Data Corporation Loan No. 2754042 Attention: Commercial Loan Department 139 THE BANK OF NOVA SCOTIA /S/ FRANK F. SANDLER By:_______________________________ Name: Frank F. Sandler Title:Relationship Manager Lending Office: 600 Peachtree Street, N.E. Suite 2700 Atlanta, Georgia 30308 Wire Transfer Instructions: The Bank of Nova Scotia, New York Agency New York, New York 10006 ABA# 026002532 Reference: Tech Data Corporation For further credit to: Atlanta Agency Attention: Cleve Bushey Account No.: 0606634 THE BANK OF NOVA SCOTIA /S/ P.J. ARMSTRONG By:_______________________________ Name:P. J. Armstrong Title:Senior Account Manager Lending Office: Etobicoke Commercial Banking Centre 195 The West Mall, Suite 100 Etobicoke, Ontario Wire Transfer Instruction: The Bank of Nova Scotia Etobicoke, Ontario ABA# BANK 002 Account No.: TRANSIT #22822 Reference: Tech Data Corporation Attention: Phillip J. Armstrong 140 BARNETT BANK OF PINELLAS COUNTY /S/ MICHAEL S. CROWE By:_______________________________ Name: Michael S. Crowe Title: Senior Vice President Lending Office: One Progress Plaza Suite 1800 St. Petersburg, Florida 33701 Wire Transfer Instructions: Barnett Bank of Pinellas County Clearwater, Florida 34615 ABA# 063106129 Acct. #02688534532 Reference: Tech Data Corporation Attention: Commercial Loan Accounting Deborah A. Harris or Bonita Haley 141 CREDIT LYONNAIS NEW YORK BRANCH /S/ ALAIN PAPIASSE By:_______________________________ Name: Alain Papiasse Title: Executive Vice President CREDIT LYONNAIS ATLANTA AGENCY /S/ ALAIN PAPIASSE By:_______________________________ Name: Alain Papiasse Title: Executive Vice President Lending Office: 303 Peachtree Street, N.E. Suite 4400 Atlanta, Georgia 30308 Wire Transfer Instruction: Credit Lyonnais New York Branch New York, New York 10019 For further credit to: Credit Lyonnais Atlanta Agency ABA# 0260-0807-3 Account No.: 01.24173.0001.00 Reference: Tech Data Attention: Loan Servicing 142 ROYAL BANK OF CANADA /S/ MICHAEL A. COLE By:_______________________________ Name: Michael A. Cole Title: Senior Manager Lending Office: 600 Wilshire Boulevard Suite 800 Los Angeles, California 90017 Wire Transfer Instructions: Chase Manhattan Bank New York, New York ABA# 021000021 Account No. 920-01-033363 Account Name: Royal Bank of Canada New York For further credit to Account No.: 218-599-9 143 PNCBank, KY, Inc. /S/ JAMES D. NEIL By:_______________________________ Name: James D. Neil Title: Vice President Lending Office: 500 W. Jefferson Street Louisville, Kentucky 40202 Wire Transfer Instruction: PNCBank, KY, Inc. ABA# 083000108 Reference: Tech Data Attention: Commercial Loan Operations Account No.: 3000991434 144 SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION /S/ MARK WELLNER By:_______________________________ Name: Mark Wellner Title: Vice President Lending Office: 150 2nd Avenue, North Suite 450 St. Petersburg, Florida 33701 Wire Transfer Instruction: SouthTrust Bank of Alabama, National Association Birmingham, Alabama ABA# 062000080 Reference: for credit to Tech Data Corporation Customer No. 5147575 Attention: SE Banking (205) 254-5698 145 FIRST UNION NATIONAL BANK OF FLORIDA /S/ JEFFERY E. NOLL By:_______________________________ Name: Jeffery E. Noll Title: Vice President Lending Office: 214 Hogan Street Jacksonville, Florida 32202 Wire Transfer Instruction: First Union National Jacksonville Jacksonville, Florida ABA# 063-000-021 In favor of: First Union National Bank of Florida Reference: Tech Data Corporation Attention: Alice Ricker 146 DEUTSCHE BANK AG NEW YORK AND/OR CAYMAN ISLANDS BRANCHES /S/ RALF HOFFMANN By:_______________________________ Name: Ralf Hoffmann Title:Vice President Lending Office: 31 West 52nd Street New York, New York 10019 Wire Transfer Instruction: Deutsche Bank AG New York Branch New York, New York 10019 ABA# 026003780 Reference: Tech Data Corporation Attention: John Quinn 147 THE SAKURA BANK, LIMITED, ATLANTA AGENCY /S/ HIROYASU IMANISHI By:_______________________________ Name: Hiroyasu Imanishi Title: Vice President and Senior Manager Lending Office: 245 Peachtree Center Avenue, N.E. Suite 2703 Atlanta, Georgia 30303 Wire Transfer Instruction: Morgan Guaranty Trust Co. of New York New York, New York ABA# 021 000 238 Account Name: The Sakura Bank, Ltd., New York Account Number: 631-22-624 In favor of: MTKB, Atlanta A/C 9000100-1 148 EX-21 5 EXHIBIT 21 ---------- TECH DATA CORPORATION SUBSIDIARIES OF THE REGISTRANT State or other Name of Percentage Jurisdiction of Subsidiary Owned Incorporation - ---------------------- ---------- ---------------- Tech Data Canada Inc. 100% Ontario, Canada Tech Data Finance, Inc. 100% California Tech Data France, SNC 100% France Tech Data Brasil, Ltd. 100% Brazil Tech Data Product Management, Inc. 100% Florida Tech Data Pacific, Inc. 100% Florida -----END PRIVACY-ENHANCED MESSAGE-----