April 8, 1998
BrightStar Information Technology Group 10375 Richmond Avenue Suite 1620 Houston, Texas 77042
Gentlemen::
Banque Paribas ("Paribas") hereby issues its commitment to make loans under, and also agrees to use its best efforts to obtain commitments from other banks to participate with Paribas (collectively, the "Lenders") in, a senior secured credit facility (the "Facility") for BrightStar Information Technology Group, Inc. ("Borrower") and the direct or indirect subsidiaries of Borrower listed on Annex I hereto (the "Eligible Subsidiaries"), together with Paribas acting for Lenders as agent (hereinafter sometimes called "Agent"). The purpose of the Facility would be to refinance the then existing indebtedness of certain Eligible Subsidiaries in connection with the acquisition by Borrower of such Eligible Subsidiaries, to provide financing for the acquisition by Borrower of additional companies, and for general working capital purposes of Borrower and the Eligible Subsidiaries. Following are the general terms and conditions of the Facility for which Paribas is attempting to obtain participants. Of course, the final terms and conditions of the Facility will be established by the bank group once and if the necessary banks have committed to the Facility.
THIS LETTER REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, SUBJECT TO THE TERMS AND CONDITIONS HEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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I. TERMS AND CONDITIONS OF THE FACILITY
Attached hereto and incorporated is a Summary for Senior Secured Credit Facility (the "Summary") which describes the basic terms and conditions of the Facility.
II. GENERAL TERMS AND CONDITIONS:
1. LOAN PAPERS:
The Facility shall be evidenced and secured by loan documents (the "Loan Papers"), each of which shall be duly executed and delivered to Agent and Lenders and shall be in form, substance and legal effect satisfactory to Agent and Lenders and their respective legal counsel, and shall include, without limitation, such promissory notes, credit agreement, security agreements, security agreement-pledges, assignments, collateral assignments, and such further documents and instruments, including, without limitation Uniform Commercial Code financing statements as Agent, Lenders or their legal counsel, in their reasonable discretion, deem necessary or desirable to evidence or perfect Lenders' liens and security interests in or to any or all of the property and collateral described herein and to evidence the indebtedness of Borrower and the Eligible Subsidiaries to Lenders thereunder. At the option of Lenders, any one or all of the Loan Papers may be acknowledged before, a notary public and filed or recorded with the appropriate governmental authorities in all locations deemed necessary or appropriate by Lenders.
2. OTHER PROVISIONS:
In addition to those described in the Summary, the Loan Papers shall contain the terms, covenants, representations, warranties, events of default, indemnities and other agreements as customary for financings of the type described (such other terms, covenants and agreements as are customary in senior secured lending transactions involving collateral located in relevant non-U.S. jurisdictions). Such terms, covenants, representations, warranties, events of defaults, indemnities, and other agreements shall apply to and be binding on Borrower and the Eligible Subsidiaries (hereinafter sometimes called the "Obligated Parties").
3. BANK'S EXPENSES:
Whether or not the transactions contemplated hereby are closed, Borrower shall pay promptly, upon demand, by the Agent, all reasonable and customary out-of-pocket expenses incurred by the Agent incidental to the Loan Papers, and preparation of this letter and the transactions
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contemplated hereunder, including, without limitation, all of Agent's attorneys' fees; provided that Borrower and counsel to the Agent shall agree to a mutually acceptable method for estimating and approving legal fees incurred in connection with the financing transaction.
4. CONDITIONS PRECEDENT:
The obligation of Lenders to make the initial advances under the Facility shall be subject to the occurrence of conditions precedent set forth in the Loan Papers, including, but not limited to, appropriate resolutions of the boards of directors of the Obligated Parties, incumbency certificates, copies of the articles of incorporation of the Obligated Parties and bylaws of the Obligated Parties, certificates of appropriate governmental officials as to the existence and good standing of the Obligated Parties, the execution and delivery of all Loan Papers, financing statements and opinions of counsel of the Obligated Parties in form and content acceptable to Agent and its legal counsel to include, without limitation, an opinion as to the initial public offering contemplated by Borrower; the Obligated Parties' corporate existence; the Obligated Parties' authority to enter into the Loan Papers; the validity and enforceability of the Loan Papers; the fact that the Obligated Parties' execution, deliver, and performance of the Loan Papers shall not cause a default under any material agreement to which any of them is a party; and such other matters as Agent and its legal counsel deem necessary or desirable. In addition, the Obligated Parties shall provide such additional documents, instruments and information as Agent or its legal counsel may reasonably request. Each advance, in addition to the initial advance, under the Loan Papers shall be subject to the additional conditions precedent that none of the Obligated Parties shall be in default of any condition or agreement with Lenders, no default or event of default shall have occurred under any of the Loan Papers and Lenders shall have received such borrowing certificates and other information as Lenders deem necessary or desirable.
III. MISCELLANEOUS:
1. The Loan Papers shall contain, in addition to the matters specifically described herein, such indemnities, covenants, representations and warranties, events of default, conditions precedent, yield protection provisions, capital adequacy provisions and other terms and conditions as in Agent's and Lenders' judgment are appropriate in financings of this nature.
2. This letter shall not be assignable by Borrower whether expressly or by operation of law or otherwise, without the prior written consent of Agent.
3. This letter sets forth the agreement of Agent and Borrower with respect to the commitment for the Facility, and no modification or waiver of any provision of this letter shall be effective unless the same shall be in writing and signed by all parties hereto.
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4. Borrower's acceptance of the terms and conditions contained in this letter shall be evidenced by its execution below and delivery to Paribas of a fully executed copy of this letter on or before 5:00 p.m., April 9, 1998. Until receipt of such acceptance by Paribas at its place of business indicated above, Paribas shall have no liability hereunder, and unless such acceptance has been received by Paribas on or before 5:00 p.m., April 9, 1998, this letter shall be null and void. Any extension of time for acceptance must be in writing and signed by Paribas. Acceptance of this letter by Borrower shall not obligate Paribas to execute any Loan Papers, however, until all conditions set forth herein have been satisfied. Upon acceptance hereof as provided for herein, Borrower agrees to pay Paribas on the closing of the transaction contemplated in this letter a $150,000 Underwriting Fee. Notwithstanding Borrower's acceptance of this letter, the closing of the transactions contemplated by this letter shall take place no later than June 30, 1998 or this letter and the commitment contained herein shall be null and void.
5. This letter may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
6. Borrower understands and agrees that Paribas will not be requested to close and fund any portion of the Facility prior to Paribas' successful syndication of the Facility with other senior lenders unless the issuance price per share at the closing of Borrower's initial public offering (the "IPO Funding") results in net offering proceeds to Borrower which are not sufficient to pay and satisfy the existing indebtedness of the Eligible Subsidiaries and to provide working capital required by Borrower and the Eligible Subsidiaries at the IPO Funding.
7. The commitment contained in this letter is additionally contingent upon the satisfaction of the following:
(a) completion, within ten (10) business days from the effective
date hereof, of a due diligence review of the operations and
financial condition of the Obligated Parties, to the
satisfaction of Agent;
(b) Agent's continuing satisfaction with the material financial
condition, operations and assets of the Obligated Parties and
their affiliates; if Agent's continuing review of materials
about the Obligated Parties changes Agent's evaluation of the
material financial condition, operations or assets of the
Obligated Parties, Agent may require alternative financing
amounts or structures that protect Agent as a lender and the
values and existence and priorities of liens in respect to its
collateral;
(c) Agent's satisfaction that Borrower has achieved satisfactory
earnings for Borrower's fiscal quarter ended March 31, 1998;
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(d) compliance by the applicable party with all legal and
governmental and third party requirements in connection with
the transactions described herein and applicable federal and
state securities and banking laws and regulations, including
but not limited to, Regulation O of the Federal Reserve Board;
(e) the IPO Funding shall have occurred by no later than June 30,
8. Borrower hereby represents and covenants that all information and data concerning Borrower and the Eligible Subsidiaries, their respective subsidiaries or affiliates and the transactions contemplated hereby (the "Information") which has been, or will hereafter be, made available to by Borrower are and will be complete and correct in all material respects, and do not and will not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in the light of the circumstances under which such statements are made. In arranging the Facilities, Agent will be using and relying primarily on the Information without independent verification thereof, and Agent shall have no obligation to make any independent verification thereof.
9. Each of Borrower and Agent agrees promptly to notify the other of the assertion against the Obligated Parties or Agent or any other person of any claim or commencement of any legal action or proceeding related to the transactions contemplated in this letter.
10. Borrower agrees to indemnify and hold harmless Agent and each of its director's, officers, employees, affiliates, and attorneys ("Indemnitees") from and against any and all actions, suits, proceedings (including any investigations or inquiries), claims, losses, damages, liabilities or expenses of any kind or nature whatsoever (including without limitation, those arising out of negligence of any Indemnitee) which may be incurred by or asserted against or involve any Indemnitee as a result of or arising out of or in any related to this letter or the Facility and, upon demand by an Indemnitee, to pay or reimburse such Indemnitee for any legal or other expenses (including allocated costs of internal counsel) incurred by such Indemnitee in connection with investigating, defending or preparing to defend any such action, suit, proceeding (including any inquiry or investigation) or claim; provided; however, that Borrower shall not be obligated to pay or make reimbursement for any settlement to which Borrower has not consented (which consent will not be unreasonably withheld; and, provided, further, Borrower shall not be liable for any liability, loss, damage or expense to any Indemnitee if it has been determined by a final decision (after all appeals and the expiration of time to appeal) by a court of competent jurisdiction that such liability, loss, damage or expense resulted from the gross negligence or willful misconduct of any such Indemnitee. Borrower's obligation to indemnify the Indemnitee and to pay the expenses referred
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