Document:

exv10w1

 

EXHIBIT 10.1

REGISTRATION RIGHTS AGREEMENT

DATED AS OF MARCH 30, 2004

AMONG

SERVICE CORPORATION INTERNATIONAL

AND

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED,

BANC OF AMERICA SECURITIES LLC

J.P. MORGAN SECURITIES INC.

CREDIT LYONNAIS SECURITIES (USA) INC.

LEHMAN BROTHERS INC.

AND

RAYMOND JAMES & ASSOCIATES, INC.

 

 

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (the “Agreement”) is made and entered
into this 30th day of March, 2004, among Service Corporation International, a
Texas corporation (the “Company”), and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Banc of America Securities LLC, J.P. Morgan Securities Inc.,
Credit Lyonnais Securities (USA) Inc., Lehman Brothers Inc. and Raymond James &
Associates, Inc. (collectively, the “Initial Purchasers”).

     This Agreement is made pursuant to the Purchase Agreement, dated March 30,
2004, among the Company and the Initial Purchasers (the “Purchase Agreement”),
which provides for the sale by the Company to the Initial Purchasers of an
aggregate of $250 million principal amount of the Company’s 6.75% Senior Notes
due 2016 (the “Securities”). In order to induce the Initial Purchasers to enter
into the Purchase Agreement, the Company has agreed to provide to the Initial
Purchasers and their direct and indirect transferees the registration rights
set
forth in this Agreement. The execution of this Agreement is a condition to the
closing under the Purchase Agreement.

     In consideration of the foregoing, the parties hereto agree as follows:

     1. Definitions.

          As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

     “1933 Act” shall mean the Securities Act of 1933, as amended from time to
time.

     “1934 Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time.

     “Closing Date” shall mean the Closing Time as defined in the Purchase
Agreement.

     “Company” shall have the meaning set forth in the preamble and shall also
include the Company’s successors.

     “Depositary” shall mean The Bank of New York, or any other depositary
appointed by the Company, provided, however, that such depositary must have an
address in the Borough of Manhattan, in the City of New York.

     “DTC” shall mean The Depository Trust Company.

     “Exchange Offer” shall mean the exchange offer by the Company of Exchange
Securities for Registrable Securities pursuant to Section 2.1 hereof.

     “Exchange Offer Registration” shall mean a registration under the 1933 Act
effected pursuant to Section 2.1 hereof.

 

 

     “Exchange Offer Registration Statement” shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement,
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.

     “Exchange Period” shall have the meaning set forth in Section 2.1 hereof.

     “Exchange Securities” shall mean the 6.75% Senior Notes due 2016, issued
by the Company under the Indenture containing terms identical to the Securities
in all material respects (except for references to certain interest rate
provisions, restrictions on transfers and restrictive legends), to be offered
to
Holders of Securities in exchange for Registrable Securities pursuant to the
Exchange Offer.

     “Holder” shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture and each Participating Broker-Dealer that holds Exchange
Securities for so long as such Participating Broker-Dealer is required to
deliver a prospectus meeting the requirements of the 1933 Act in connection
with
any resale of such Exchange Securities.

     “Indenture” shall mean the Indenture relating to the Securities, dated as
of February 1, 1993, between the Company and The Bank of New York, as trustee,
as the same may be amended, supplemented, waived or otherwise modified from
time
to time in accordance with the terms thereof.

     “Initial Purchaser” or “Initial Purchasers” shall have the meaning set
forth in the preamble.

     “Majority Holders” shall mean the Holders of a majority of the aggregate
principal amount of Outstanding (as defined in the Indenture) Registrable
Securities; provided that whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company and other obligors on the Securities
or any Affiliate (as defined in the Indenture) of the Company shall be
disregarded in determining whether such consent or approval was given by the
Holders of such required percentage amount.

     “Participating Broker-Dealer” shall mean any of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Banc of America Securities LLC, J.P. Morgan
Securities Inc., Credit Lyonnais Securities (USA) Inc., Lehman Brothers Inc.
and
Raymond James & Associates, Inc. and any other broker-dealer which makes a
market in the Securities and exchanges Registrable Securities in the Exchange
Offer for Exchange Securities.

     “Person” shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated organization,
or
a government or agency or political subdivision thereof.

     “Private Exchange” shall have the meaning set forth in Section 2.1 hereof.

2

 

     “Private Exchange Securities” shall have the meaning set forth in Section
2.1 hereof.

     “Prospectus” shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.

     “Purchase Agreement” shall have the meaning set forth in the preamble.

     “Registrable Securities” shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that Securities and, if issued,
the Private Exchange Securities, shall cease to be Registrable Securities when
(i) a Registration Statement with respect to such Securities shall have been
declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities have
been sold to the public pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A) under the 1933 Act, (iii) such Securities shall have
ceased to be outstanding or (iv) the Exchange Offer is consummated (except in
the case of Securities purchased from the Company and continued to be held by
the Initial Purchasers).

     “Registration Expenses” shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. (the “NASD”) registration and filing fees, including,
if applicable, the fees and expenses of any “qualified independent underwriter”
(and its counsel) that is required to be retained by any holder of Registrable
Securities in accordance with the rules and regulations of the NASD, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws and compliance with the rules of the NASD (including
reasonable
fees and disbursements of counsel for any underwriters or Holders in connection
with blue sky qualification of any of the Exchange Securities or Registrable
Securities and any filings with the NASD), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and distributing
any Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and other
documents relating to the performance of and compliance with this Agreement,
(iv) all fees and expenses incurred in connection with the listing, if any, of
any of the Registrable Securities on any securities exchange or exchanges, (v)
all rating agency fees, (vi) the fees and disbursements of counsel for the
Company and of the independent public accountants of the Company, including the
expenses of any special audits or “cold comfort” letters required by or
incident
to such performance and compliance, (vii) the fees and expenses of the Trustee,
and any escrow agent or custodian, (viii) the reasonable fees and expenses of
the Initial Purchasers in connection with the Exchange Offer, including the
reasonable fees and expenses of counsel to the Initial Purchasers in connection
therewith and (ix) any fees and disbursements of the underwriters customarily
required to be paid by issuers or sellers of securities and the fees and
expenses of any special experts retained by the Company in connection with any
Registration Statement, but excluding

3

 

underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by a Holder.

     “Registration Statement” shall mean any registration statement of the
Company which covers any of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement, and all amendments and
supplements
to any such Registration Statement, including post-effective amendments, in
each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

     “SEC” shall mean the Securities and Exchange Commission or any successor
agency or government body performing the functions currently performed by the
United States Securities and Exchange Commission.

     “Shelf Registration” shall mean a registration effected pursuant to
Section 2.2 hereof.

     “Shelf Registration Statement” shall mean a “shelf” registration statement
of the Company pursuant to the provisions of Section 2.2 of this Agreement
which
covers all of the Registrable Securities or all of the Private Exchange
Securities on an appropriate form under Rule 415 under the 1933 Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

     “Trustee” shall mean the trustee with respect to the Securities under the
Indenture.

     2. Registration Under the 1933 Act.

          2.1 Exchange Offer. The Company shall, for the benefit of the
Holders, at the Company’s cost, (A) prepare and, as soon as practicable but not
later than 90 days following the Closing Date, file with the SEC an Exchange
Offer Registration Statement on an appropriate form under the 1933 Act with
respect to a proposed Exchange Offer and the issuance and delivery to the
Holders, in exchange for the Registrable Securities (other than Private
Exchange
Securities), of a like principal amount of Exchange Securities, (B) use its
best
efforts to cause the Exchange Offer Registration Statement to be declared
effective under the 1933 Act within 180 days of the Closing Date, (C) use its
best efforts to keep the Exchange Offer Registration Statement effective until
the closing of the Exchange Offer and (D) use its best efforts to cause the
Exchange Offer to be consummated not later than 210 days following the Closing
Date. The Exchange Securities will be issued under the Indenture. Upon the
effectiveness of the Exchange Offer Registration Statement, the Company shall
promptly commence the Exchange Offer, it being the objective of such Exchange
Offer to enable each Holder eligible and electing to exchange Registrable
Securities for Exchange Securities (assuming that such Holder (a) is not an
affiliate of the Company within the meaning of Rule 405 under the 1933 Act, (b)
is not a broker-dealer tendering Registrable Securities acquired directly from
the Company for its own account, (c) acquired the Exchange Securities in the
ordinary course of such Holder’s business and (d) has no arrangements or
understandings with any Person to participate in the Exchange Offer for the
purpose of distributing the Exchange Securities) to transfer such Exchange
Securities from and

4

 

after their receipt without any limitations or restrictions under the 1933 Act
and under state securities or blue sky laws.

     In connection with the Exchange Offer, the Company shall:

          (a) mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;

          (b) keep the Exchange Offer open for acceptance for a period of
not less than 20 business days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law) (such period referred to
herein as the “Exchange Period”);

          (c) utilize the services of the Depositary for the Exchange Offer;

          (d) permit Holders to withdraw tendered Registrable Securities at
any time prior to 5:00 p.m. (Eastern Time), on the last business day of the
Exchange Period, by sending to the Depositary, a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Registrable Securities delivered for exchange, and a statement that
such Holder is withdrawing such Holder’s election to have such Securities
exchanged;

          (e) notify each Holder that any Registrable Security not tendered
will remain outstanding and continue to accrue interest, but will not retain
any
rights under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein); and

          (f) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.

     If, prior to consummation of the Exchange Offer, the Initial Purchasers
hold any Securities acquired by them and having the status of an unsold
allotment in the initial distribution, the Company upon the request of any
Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to such Initial Purchaser
in
exchange (the “Private Exchange”) for the Securities held by such Initial
Purchaser, a like principal amount of debt securities of the Company on a
senior
basis, that are identical (except that such securities shall bear appropriate
transfer restrictions) to the Exchange Securities (the “Private Exchange
Securities”).

     The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture and which, in either case, has been qualified under
the Trust Indenture Act of 1939, as amended (the “TIA”), or is exempt from such
qualification and shall provide that the Exchange Securities shall not be
subject to the transfer restrictions set forth in the Indenture but that the
Private Exchange Securities shall be subject to such transfer restrictions. The
Indenture or such indenture shall provide that the Exchange Securities, the
Private Exchange Securities and the Securities shall vote and consent together
on all matters as one class and that none of the Exchange Securities, the
Private Exchange Securities or the Securities will have the right to vote or
consent as a

5

 

separate class on any matter. The Private Exchange Securities shall be of the
same series as and the Company shall use all commercially reasonable efforts to
have the Private Exchange Securities bear the same CUSIP number as the Exchange
Securities. The Company shall not have any liability under this Agreement
solely
as a result of such Private Exchange Securities not bearing the same CUSIP
number as the Exchange Securities.

     As soon as practicable after the close of the Exchange Offer and/or the
Private Exchange, as the case may be, the Company shall:

     (i) accept for exchange all Registrable Securities duly tendered and
not validly withdrawn pursuant to the Exchange Offer in accordance with
the terms of the Exchange Offer Registration Statement and the letter of
transmittal which shall be an exhibit thereto;

     (ii) accept for exchange all Securities properly tendered pursuant
to the Private Exchange;

     (iii) deliver to the Trustee for cancellation all Registrable
Securities so accepted for exchange; and

     (iv) cause the Trustee promptly to authenticate and deliver Exchange
Securities or Private Exchange Securities, as the case may be, to each
Holder of Registrable Securities so accepted for exchange in a principal
amount equal to the principal amount of the Registrable Securities of such
Holder so accepted for exchange.

     Interest on each Exchange Security and Private Exchange Security will
accrue from the last date on which interest was paid on the Registrable
Securities surrendered in exchange therefor or, if no interest has been paid on
the Registrable Securities, from the date of original issuance. The Exchange
Offer and the Private Exchange shall not be subject to any conditions, other
than (i) that the Exchange Offer or the Private Exchange, or the making of any
exchange by a Holder, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) the due tendering of Registrable
Securities in accordance with the Exchange Offer and the Private Exchange,
(iii)
that each Holder of Registrable Securities exchanged in the Exchange Offer
shall
have represented that all Exchange Securities to be received by it shall be
acquired in the ordinary course of its business and that at the time of the
consummation of the Exchange Offer it shall have no arrangement or
understanding
with any person to participate in the distribution (within the meaning of the
1933 Act) of the Exchange Securities and shall have made such other
representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to render the use of Form S-4 or other
appropriate form under the 1933 Act available and (iv) that no action or
proceeding shall have been instituted or threatened in any court or by or
before
any governmental agency with respect to the Exchange Offer or the Private
Exchange which, in the Company’s judgment, would reasonably be expected to
impair the ability of the Company to proceed with the Exchange Offer or the
Private Exchange. The Company shall inform the Initial Purchasers of the names
and addresses of the Holders to whom the Exchange Offer is made, and the
Initial
Purchasers shall have the right to contact such Holders and otherwise
facilitate
the tender of Registrable Securities in the Exchange Offer.

6

 

          2.2 Shelf Registration. (i) If, because of any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the
SEC, the Company is not permitted to effect the Exchange Offer as contemplated
by Section 2.1 hereof, (ii) if for any other reason the Exchange Offer
Registration Statement is not declared effective within 180 days following the
original issue of the Registrable Securities or the Exchange Offer is not
consummated within 210 days after the original issue of the Registrable
Securities, (iii) upon the request of any of the Initial Purchasers or (iv) if
a
Holder is not permitted to participate in the Exchange Offer or does not
receive
fully tradeable Exchange Securities pursuant to the Exchange Offer, then in
case
of each of clauses (i) through (iv) the Company shall, at its cost:

          (a) As promptly as practicable, file with the SEC, and thereafter
shall use its best efforts to cause to be declared effective as promptly as
practicable but no later than 210 days after the original issue of the
Registrable Securities, a Shelf Registration Statement relating to the offer
and
sale of the Registrable Securities by the Holders from time to time in
accordance with the methods of distribution elected by the Majority Holders
participating in the Shelf Registration and set forth in such Shelf
Registration
Statement.

          (b) Use its best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming part thereof
to
be usable by Holders for a period of two years from the date the Shelf
Registration Statement is declared effective by the SEC, or for such shorter
period that will terminate when all Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or cease to be outstanding or otherwise to be Registrable Securities
(the “Effectiveness Period”); provided, however, that the Effectiveness Period
in respect of the Shelf Registration Statement shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the 1933 Act and as otherwise provided herein.

          (c) Notwithstanding any other provisions hereof, use its best
efforts to ensure that (i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any supplement thereto
complies in all material respects with the 1933 Act and the rules and
regulations thereunder, (ii) any Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any
Prospectus
forming part of any Shelf Registration Statement, and any supplement to such
Prospectus (as amended or supplemented from time to time), does not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements, in light of the circumstances under which they
were made, not misleading.

          The Company shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration Statement. The Company
further agrees, if necessary, to supplement or amend the Shelf Registration
Statement, as required by Section 3(b) below, and to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly
after
its being used or filed with the SEC.

7

 

          2.3 Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2.1 or 2.2. Each Holder
shall pay all underwriting discounts and commissions and transfer taxes, if
any,
relating to the sale or disposition of such Holder’s Registrable Securities
pursuant to the Shelf Registration Statement.

          2.4 Effectiveness. (a) The Company will be deemed not have used
its best efforts to cause the Exchange Offer Registration Statement or the
Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if the Company voluntarily takes any action that
would, or omits to take any action which omission would, result in any such
Registration Statement not being declared effective or in the Holders of
Registrable Securities covered thereby not being able to exchange or offer and
sell such Registrable Securities during that period as and to the extent
contemplated hereby, unless such action is required by applicable law.

          (b) An Exchange Offer Registration Statement pursuant to Section
2.1 hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof
will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to an Exchange Offer Registration
Statement or a Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have become effective during the period of such interference, until the
offering
of Registrable Securities pursuant to such Registration Statement may legally
resume.

          2.5 Interest. The Securities will provide that in the event that
either (a) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to the 90th calendar day following the date of original
issue of the Securities, (b) the Exchange Offer Registration Statement has not
been declared effective on or prior to the 180th calendar day following the
date
of original issue of the Securities or (c) the Exchange Offer is not
consummated
or a Shelf Registration Statement is not declared effective, in either case, on
or prior to the 210th calendar day following the date of original issue of the
Securities (each such event referred to in clauses (a) through (c) above, a
“Registration Default”), the interest rate borne by the Securities shall be
increased (“Additional Interest”) by one-quarter of one percent (0.25%) per
annum upon the occurrence of each Registration Default, which rate will
increase
by one quarter of one percent (0.25%) each 90-day period that such Additional
Interest continues to accrue under any such circumstance, provided that the
maximum aggregate increase in the interest rate will in no event exceed one
percent (1.0%) per annum. Upon the cure of all Registration Defaults the
accrual
of Additional Interest will cease and the interest rate will revert to the
original rate.

          If the Shelf Registration Statement is unusable by the Holders for
any reason, and the aggregate number of days in any consecutive twelve-month
period for which the Shelf Registration Statement shall not be usable exceeds
30
days in the aggregate, then the interest rate borne by the Securities will be
increased by one-quarter of one percent (0.25%) per annum of the principal
amount of the Securities for the first 90-day period (or portion thereof)
beginning on the 31st such date that such Shelf Registration Statement ceases
to
be usable, which rate shall be

8

 

increased by an additional one-quarter of one percent (0.25%) per annum of the
principal amount of the Securities at the beginning of each subsequent 90-day
period, provided that the maximum aggregate increase in the interest rate will
in no event exceed one percent (1.0%) per annum. Any amounts payable under this
paragraph shall also be deemed “Additional Interest” for purposes of this
Agreement. Upon the Shelf Registration Statement once again becoming usable,
the
interest rate borne by the Securities will be reduced to the original interest
rate if the Company is otherwise in compliance with this Agreement at such
time.
Additional Interest shall be computed based on the actual number of days
elapsed
in each 90-day period in which the Shelf Registration Statement is unusable.

          The Company shall notify the Trustee within three business days
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an “Event Date”). Additional
Interest shall be paid by depositing with the Trustee, in trust, for the
benefit
of the Holders of Registrable Securities, on or before the applicable
semiannual
interest payment date, immediately available funds in sums sufficient to pay
the
Additional Interest then due. The Additional Interest due shall be payable on
each interest payment date to the record Holder of Securities entitled to
receive the interest payment to be paid on such date as set forth in the
Indenture. Each obligation to pay Additional Interest shall be deemed to accrue
from and including the day following the applicable Event Date.

     3. Registration Procedures.

          In connection with the obligations of the Company with respect to
Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Company
shall:

          (a) prepare and file with the SEC a Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form under
the 1933 Act, which form (i) shall be selected by the Company, (ii) shall, in
the case of a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof, (iii) shall comply as to form in all
material respects with the requirements of the applicable form and include or
incorporate by reference all financial statements required by the SEC to be
filed therewith or incorporated by reference therein, and (iv) shall comply in
all respects with the requirements of Regulation S-T under the 1933 Act, and
use
its best efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;

          (b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary
under applicable law to keep such Registration Statement effective for the
applicable period; and cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provision then in force) under the 1933 Act and comply with the
provisions of the 1933 Act, the 1934 Act and the rules and regulations
thereunder applicable to them with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the selling
Holders thereof (including sales by any Participating Broker-Dealer);

9

 

          (c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is
being
filed and advising such Holders that the distribution of Registrable Securities
will be made in accordance with the method selected by the Majority Holders
participating in the Shelf Registration; (ii) furnish to each Holder of
Registrable Securities and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if the
Holder so requests, all exhibits in order to facilitate the public sale or
other
disposition of the Registrable Securities; and (iii) hereby consent to the use
of the Prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;

          (d) use its best efforts to register or qualify the Registrable
Securities under all applicable state securities or “blue sky” laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of Registrable
Securities shall reasonably request by the time the applicable Registration
Statement is declared effective by the SEC, and do any and all other acts and
things which may be reasonably necessary or advisable to enable each such
Holder
and underwriter to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that the
Company
shall not be required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), or (ii) take any action which would subject
it to general service of process or taxation in any such jurisdiction where it
is not then so subject;

          (e) notify promptly each Holder of Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Company that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below and, if requested by such Holder or
Participating Broker-Dealer, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) in the case of a Shelf Registration, if,
between the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to the offering
cease to be true and correct in all material respects, (v) of the happening of
any event or the discovery of any facts during the period a Shelf Registration
Statement is effective which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or which
requires the making of any changes in such Registration Statement or Prospectus
in order to make the statements therein not misleading, (vi) of the receipt by
the Company of any notification with

10

 

respect to the suspension of the qualification of the Registrable Securities or
the Exchange Securities, as the case may be, for sale in any jurisdiction or
the
initiation or threatening of any proceeding for such purpose and (vii) of any
determination by the Company that a post-effective amendment to such
Registration Statement would be appropriate;

          (f) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled “Plan
of
Distribution” which section shall be reasonably acceptable to Merrill Lynch on
behalf of the Participating Broker-Dealers, and which shall contain a summary
statement of the positions taken or policies made by the staff of the SEC with
respect to the potential “underwriter” status of any broker-dealer that holds
Registrable Securities acquired for its own account as a result of
market-making
activities or other trading activities and that will be the beneficial owner
(as
defined in Rule 13d-3 under the Exchange Act) of Exchange Securities to be
received by such broker-dealer in the Exchange Offer, whether such positions or
policies have been publicly disseminated by the staff of the SEC or such
positions or policies, in the reasonable judgment of Merrill Lynch on behalf of
the Participating Broker-Dealers and its counsel, represent the prevailing
views
of the staff of the SEC, including a statement that any such broker-dealer who
receives Exchange Securities for Registrable Securities pursuant to the
Exchange
Offer may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Company the notice referred to in Section 3(e), without
charge,
as many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or
supplement
thereto, as such Participating Broker-Dealer may reasonably request, (iii)
hereby consent to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto, by any Person
subject to the prospectus delivery requirements of the SEC, including all
Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement
thereto, and (iv) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the Exchange
Offer
(x) the following provision:

“If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities, it will deliver a prospectus
meeting the requirements of the 1933 Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer;” and

(y) a statement to the effect that by a broker-dealer making the acknowledgment
described in clause (x) and by delivering a Prospectus in connection with the
exchange of Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the 1933 Act.

          (g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish
counsel
for the Holders of Registrable Securities copies of any comment letters
received
from the SEC or any other request

11

 

by the SEC or any state securities authority for amendments or supplements to a
Registration Statement and Prospectus or for additional information;

          (h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible moment;

          (i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, and each underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules (without
documents incorporated therein by reference and all exhibits thereto, unless
requested);

          (j) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and enable such Registrable Securities to
be in such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders or the underwriters, if any,
may
reasonably request at least three business days prior to the closing of any
sale
of Registrable Securities;

          (k) in the case of a Shelf Registration, upon the occurrence of
any event or the discovery of any facts, each as contemplated by Sections
3(e)(v) and 3(e)(vi) hereof, as promptly as practicable after the occurrence of
such an event, use its best efforts to prepare a supplement or post-effective
amendment to the Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities
or Participating Broker-Dealers, such Prospectus will not contain at the time
of
such delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or will remain so
qualified. At such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such determination
and to furnish each Holder such number of copies of the Prospectus as amended
or
supplemented, as such Holder may reasonably request;

          (l) in the case of a Shelf Registration, a reasonable time prior
to the filing of any Registration Statement, any Prospectus, any amendment to a
Registration Statement or amendment or supplement to a Prospectus or any
document which is to be incorporated by reference into a Registration Statement
or a Prospectus after initial filing of a Registration Statement, provide
copies
of such document to the Initial Purchasers on behalf of such Holders; and make
representatives of the Company as shall be reasonably requested by the Holders
of Registrable Securities, or the Initial Purchasers on behalf of such Holders,
available for discussion of such document;

          (m) obtain a CUSIP number for all Exchange Securities, Private
Exchange Securities or Registrable Securities, as the case may be, not later
than the effective date of a

12

 

Registration Statement, and provide the Trustee with printed certificates for
the Exchange Securities, Private Exchange Securities or the Registrable
Securities, as the case may be, in a form eligible for deposit with DTC;

          (n) (i) cause the Indenture to be qualified under the TIA in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, (ii) cooperate with the Trustee and the Holders
to effect such changes to the Indenture as may be required for the Indenture to
be so qualified in accordance with the terms of the TIA and (iii) execute, and
use its best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable the Indenture to be so qualified in a timely
manner;

          (o) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and
appropriate
actions in order to expedite or facilitate the disposition of such Registrable
Securities and in such connection whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration:

               (i) make such representations and warranties to the Holders of
such Registrable Securities and the underwriters, if any, in form, substance
and
scope as are customarily made by issuers to underwriters in similar
underwritten
offerings as may be reasonably requested by them;

               (ii) enter into a securities sales agreement with the Holders
and an agent of the Holders providing for, among other things, the appointment
of such agent for the selling Holders for the purpose of soliciting purchases
of
Registrable Securities, which agreement shall be in form, substance and scope
customary for similar offerings;

               (iii) if an underwriting agreement is entered into, cause the
same to set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth in
Section
4 hereof with respect to the underwriters and all other parties to be
indemnified pursuant to said Section or, at the request of any underwriters, in
the form customarily provided to such underwriters in similar types of
transactions; and

               (iv) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar offerings to
the Holders of a majority in principal amount of the Registrable Securities
being sold and the managing underwriters, if any.

The above shall be done at (i) the effectiveness of such Registration Statement
(and each post-effective amendment thereto) and (ii) each closing under any
underwriting or similar agreement as and to the extent required thereunder;

          (p) in the case of a Shelf Registration or if a Prospectus is
required to be delivered by any Participating Broker-Dealer in the case of an
Exchange Offer, make available for inspection by representatives of the Holders
of the Registrable Securities, any underwriters participating in any
disposition
pursuant to a Shelf Registration Statement, any Participating

13

 

Broker-Dealer and any counsel or accountant retained by any of the foregoing,
all financial and other records, pertinent corporate documents and properties
of
the Company reasonably requested by any such persons, and cause the respective
officers, directors, employees, and any other agents of the Company to supply
all information reasonably requested by any such representative, underwriter,
special counsel or accountant in connection with a Registration Statement, and
make such representatives of the Company available for discussion of such
documents as shall be reasonably requested by the Initial Purchasers;

          (q) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to such Prospectus,
provide copies of such document to the Initial Purchasers and to counsel to the
Holders of Registrable Securities and make such changes in any such document
prior to the filing thereof as the Initial Purchasers or counsel to the Holders
of Registrable Securities may reasonably request and, except as otherwise
required by applicable law, not file any such document in a form to which the
Initial Purchasers on behalf of the Holders of Registrable Securities and
counsel to the Holders of Registrable Securities shall not have previously been
advised and furnished a copy of or to which the Initial Purchasers on behalf of
the Holders of Registrable Securities or counsel to the Holders of Registrable
Securities shall reasonably object, and make the representatives of the Company
available for discussion of such documents as shall be reasonably requested by
the Initial Purchasers; and

               (ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the Holders
of
Registrable Securities, to the Initial Purchasers, to counsel for the Holders
and to the underwriter or underwriters of an underwritten offering of
Registrable Securities, if any, make such changes in any such document prior to
the filing thereof as the Initial Purchasers, the counsel to the Holders or the
underwriter or underwriters reasonably request and not file any such document
in
a form to which the Majority Holders, the Initial Purchasers on behalf of the
Holders of Registrable Securities, counsel for the Holders of Registrable
Securities or any underwriter shall not have previously been advised and
furnished a copy of or to which the Majority Holders, the Initial Purchasers of
behalf of the Holders of Registrable Securities, counsel to the Holders of
Registrable Securities or any underwriter shall reasonably object, and make the
representatives of the Company available for discussion of such document as
shall be reasonably requested by the Holders of Registrable Securities, the
Initial Purchasers on behalf of such Holders, counsel for the Holders of
Registrable Securities or any underwriter.

          (r) in the case of a Shelf Registration, use its best efforts to
cause all Registrable Securities to be listed on any securities exchange on
which similar debt securities issued by the Company are then listed if
requested
by the Majority Holders, or if requested by the underwriter or underwriters of
an underwritten offering of Registrable Securities, if any;

          (s) in the case of a Shelf Registration, use its best efforts to
cause the Registrable Securities to be rated by the appropriate rating
agencies,
if so requested by the

14

 

Majority Holders, or if requested by the underwriter or underwriters of an
underwritten offering of Registrable Securities, if any;

          (t) otherwise comply with all applicable rules and regulations of
the SEC and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
thereunder;

          (u) cooperate and assist in any filings required to be made with
the NASD and, in the case of a Shelf Registration, in the performance of any
due
diligence investigation by any underwriter and its counsel (including any
“qualified independent underwriter” that is required to be retained in
accordance with the rules and regulations of the NASD); and

          (v) upon consummation of an Exchange Offer or a Private Exchange,
obtain a customary opinion of counsel to the Company addressed to the Trustee
for the benefit of all Holders of Registrable Securities participating in the
Exchange Offer or Private Exchange, and which includes an opinion that (i) the
Company has duly authorized, executed and delivered the Exchange Securities
and/or Private Exchange Securities, as applicable, and the related indenture,
and (ii) each of the Exchange Securities and related indenture constitute a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its respective terms (with customary exceptions).

          In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder’s participation in the Shelf Registration) require
each
Holder of Registrable Securities to furnish to the Company such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing.

          In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
or the discovery of any facts, each of the kind described in Section 3(e)(v)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a Registration Statement until such Holder’s receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
3(k) hereof, and, if so directed by the Company, such Holder will deliver to
the
Company (at its expense) all copies in such Holder’s possession, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.

          In the event that the Company fails to effect the Exchange Offer or
file any Shelf Registration Statement and maintain the effectiveness of any
Shelf Registration Statement as provided herein, the Company shall not file any
Registration Statement with respect to any securities (within the meaning of
Section 2(1) of the 1933 Act) of the Company other than Registrable Securities.

          If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or

15

 

managers that will manage such offering will be selected by the Majority
Holders
of such Registrable Securities included in such offering and shall be
acceptable
to the Company. No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder’s Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.

     4. Indemnification; Contribution.

          (a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder, each Participating Broker-Dealer, each Person who
participates as an underwriter (any such Person being an “Underwriter”) and
each
Person, if any, who controls any Holder or Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

               (i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement (or
any amendment or supplement thereto) pursuant to which Exchange Securities or
Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, or the omission or alleged
omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading, or arising out of any untrue statement
or
alleged untrue statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;

               (ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 4(d) below) any such
settlement is effected with the written consent of the Company; and

               (iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any indemnified
party), reasonably incurred in investigating, preparing or defending against
any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under subparagraph (i) or (ii)
above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information

16

 

furnished to the Company by the Holder or Underwriter expressly for use in a
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).

          (b) Each Holder severally, but not jointly, agrees to indemnify
and hold harmless the Company, the Initial Purchasers, each Underwriter and the
other selling Holders, and each of their respective directors and officers, and
each Person, if any, who controls the Company, the Initial Purchasers, any
Underwriter or any other selling Holder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 4(a)
hereof, as incurred, but only with respect to untrue statements or omissions,
or
alleged untrue statements or omissions, made in the Shelf Registration
Statement
(or any amendment thereto) or any Prospectus included therein (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information with respect to such Holder furnished to the Company by such Holder
expressly for use in the Shelf Registration Statement (or any amendment
thereto)
or such Prospectus (or any amendment or supplement thereto); provided, however,
that no such Holder shall be liable for any claims hereunder in excess of the
amount of net proceeds received by such Holder from the sale of Registrable
Securities pursuant to such Shelf Registration Statement.

          (c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure so to notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially
prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying party or parties be
liable
for the fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii)
does
not include a statement as to or an admission of fault, culpability or a
failure
to act by or on behalf of any indemnified party.

          (d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45

17

 

days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.

          (e) If the indemnification provided for in this Section 4 is for
any reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Holders and the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

     The relative fault of the Company on the one hand and the Holders
and the Initial Purchasers on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of
a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Holders or the Initial Purchasers
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

     The Company, the Holders and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 4. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
4 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.

     Notwithstanding the provisions of this Section 4, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities sold by it were offered exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission
or alleged omission.

     No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.

     For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Company, and each Person,
if any, who controls the Company within the meaning

18

 

of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The Initial Purchasers’ respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the principal amount of Securities set forth opposite their respective names
in Schedule A to the Purchase Agreement and not joint.

     5. Miscellaneous.

          5.1 Rule 144 and Rule 144A. For so long as the Company is subject
to the reporting requirements of Section 13 or 15 of the 1934 Act, the Company
covenants that it will file the reports required to be filed by it under the
1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. If the Company ceases to be so
required to file such reports, the Company covenants that it will upon the
request of any Holder of Registrable Securities (a) make publicly available
such
information as is necessary to permit sales pursuant to Rule 144 under the 1933
Act, (b) deliver such information to a prospective purchaser as is necessary to
permit sales pursuant to Rule 144A under the 1933 Act and it will take such
further action as any Holder of Registrable Securities may reasonably request,
and (c) take such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the 1933 Act within
the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act,
as
such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act,
as such Rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.

          5.2 No Inconsistent Agreements. The Company has not entered into
and the Company will not after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not and will
not for the term of this Agreement in any way conflict with the rights granted
to the holders of the Company’s other issued and outstanding securities under
any such agreements.

          5.3 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure.

          5.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given by such Holder
to
the Company by means of a notice given in accordance with the provisions of
this
Section 5.4, which address initially is the address set forth in the Purchase
Agreement with respect to the Initial Purchasers; and (b) if to the Company,
initially at the

19

 

Company’s address set forth in the Purchase Agreement, and thereafter at such
other address of which notice is given in accordance with the provisions of
this
Section 5.4.

          All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; two
business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.

          Copies of all such notices, demands, or other communications shall
be concurrently delivered by the person giving the same to the Trustee under
the
Indenture, at the address specified in such Indenture.

          5.5 Successor and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement or the
Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this
Agreement
and, if applicable, the Purchase Agreement, and such person shall be entitled
to
receive the benefits hereof.

          5.6 Third Party Beneficiaries. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Company, on
the
one hand, and the Holders, on the other hand, and shall have the right to
enforce such agreements directly to the extent they deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right
to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights hereunder.

          5.7 Specific Enforcement. Without limiting the remedies available
to the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Sections 2.1
through
2.4 hereof may result in material irreparable injury to the Initial Purchasers
or the Holders for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Company’s obligations
under Sections 2.1 through 2.4 hereof.

20

 

          5.8 Restriction on Resales. Until the expiration of two years
after the original issuance of the Securities and the Guarantees, the Company
and the Guarantor will not, and will cause their “affiliates” (as such term is
defined in Rule 144(a)(1) under the 1933 Act) not to, resell any Securities and
Guarantees which are “restricted securities” (as such term is defined under
Rule
144(a)(3) under the 1933 Act) that have been reacquired by any of them and
shall
immediately upon any purchase of any such Securities and Guarantees submit such
Securities and Guarantees to the Trustee for cancellation.

          5.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

          5.10 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

          5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

          5.12 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining
provisions contained herein shall not be affected or impaired thereby.

21

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

	 	 	 	 	 
	 	SERVICE CORPORATION INTERNATIONAL

 	 
	 	By:  	/s/ Jeffrey E. Curtiss
 	 
	 	 	Name:  	Jeffrey E. Curtiss 	 
	 	 	Title:  	Senior Vice President, Chief
Financial Officer and Treasurer 	 
	 

	 	 	 	 	 
	Confirmed and accepted as	 	 
	

	 	of the date first above	 	 
	

	 	written:	 	 
	 
	 	 	 	 
	MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED	 	 
	BANC OF AMERICA SECURITIES LLC	 	 
	J.P. MORGAN SECURITIES INC.	 	 
	CREDIT LYONNAIS SECURITIES (USA) INC.	 	 
	LEHMAN BROTHERS INC.	 	 
	RAYMOND JAMES & ASSOCIATES, INC.	 	 
	 
	 	 	 	 
	BY:	 	MERRILL LYNCH, PIERCE, FENNER & SMITH
	

	 	INCORPORATED	 	 
	 
	 	 	 	 
	By:

	 	/s/ Brad Bynum	 	 
	

	 	
 	 	 
	Name:

	 	Brad Bynum	 	 
	Title:

	 	Director	 	 

22exv10w41

 

Exhibit 10.41

BUSINESS FINANCING AGREEMENT

This Business Financing Agreement (“Agreement”) is made between GE Commercial
Distribution Finance Corporation (“CDF”) and En Pointe Technologies Sales,
Inc., a [   ] SOLE PROPRIETORSHIP, [   ] PARTNERSHIP, [X] CORPORATION, [   ]
LIMITED LIABILITY COMPANY (check applicable term) (“Dealer”), having its chief
executive office located at 100 North Sepulveda Blvd., 19th Floor, El Segundo,
CA 90245.

	1.	 	DEFINITIONS

	1.1	 	Special Definitions. The following terms will have the following
meanings in this Agreement:

“Accounts”: all accounts, leases, chattel paper, choses
in action and instruments, including any lien or other security
interest that secures or may secure any of the foregoing, plus
all books, invoices, documents and other records in any form
evidencing or relating to any of the foregoing, now owned or
hereafter acquired by Dealer.

“Accounts Receivable Facility”: a credit facility
extended pursuant to this Agreement.

“Agreement for Wholesale Financing”: any Agreement for
Wholesale Financing, as amended from time to time, which Dealer
has executed in conjunction with inventory financing extended
by CDF.

“Average Contract Balance”: the amount determined by dividing:
(a) the sum of the Daily Contract Balances (as defined in
Section 2.1.1) for a billing period; by, (b) the actual number
of days in such billing period.

“Business Day”: any day other than a Saturday, Sunday or other
days on which commercial banks are authorized or required to
close under the laws of the United States.

“Default”: the events or occurrences enumerated in
Section 6.

“Entity”: any individual, association, firm, corporation,
partnership, limited liability company, trust, governmental
body, agency or instrumentality whatsoever.

“Guarantor”: a guarantor of any of the Obligations.

“Inventory”: all of Dealer’s presently owned and hereafter
acquired goods which are held for sale or lease.

“Obligations”: all liabilities and indebtedness now or
hereafter arising, owing, due or payable from Dealer to CDF
(and any of its subsidiaries and affiliates), including any
third party claims against Dealer satisfied or acquired by CDF,
whether primary or secondary, joint or several, direct,
contingent, fixed or otherwise, and whether or not evidenced by
instruments or evidences of indebtedness, and all covenants,
agreements (including consent to binding arbitration),
warranties, duties and representations, whether such
Obligations arise under this Agreement, the Other Agreements or
any other agreements previously, now or hereafter executed by
Dealer and delivered to CDF or by operation of law.

“Other Agreements”: all security agreements (including the
Agreement for Wholesale Financing), mortgages, leases,
instruments, assignments,

 

 

Exhibit 10.41

documents, guarantees, schedules, certificates, contracts and
similar agreements heretofore, now or hereafter executed by
Dealer and delivered to CDF or delivered by or on behalf of
Dealer to a third party and assigned to CDF by operation of law
or otherwise.

“Prime Rate”: a rate of interest equal to the greater of: (a)
the rate of interest which JP Morgan Chase Bank (or any
successor in interest) publicly announces from time to time as
its prime rate or reference rate; and (b) four percent (4%) per
annum. The Prime Rate will change and take effect for purposes
of this Agreement on the day that JP Morgan Chase Bank (or any
successor in interest) publicly announces any change in its
Prime Rate or reference rate.

	2.	 	CREDIT FACILITY/INTEREST RATES/FEES

	2.1	 	Accounts Receivable Facility. Subject to the terms of this
Agreement, CDF agrees to provide to Dealer an Accounts Receivable
Facility of Thirty Million DOLLARS ($30,000,000.00). CDF’s decision
to advance funds is discretionary, and will not be binding until the
funds are actually advanced.

	2.1.1	 	Interest. Dealer agrees to pay interest to CDF on the
Daily Contract Balance at a rate equal to the Prime Rate plus one
percent (1%) per annum, provided however, that the Initial
Advance will bear interest at Prime Rate minus one half of one
percent (.50%). CDF will calculate such interest by multiplying
the Daily Rate by the Daily Contract Balance (each as defined
below). Such interest will accrue from the date that CDF
authorizes any Electronic Transfer (as defined in Section 3.10
herein) or otherwise makes an advance under the Accounts
Receivable Facility until CDF receives the full and final payment
of the principal debt which Dealer owes to CDF, subject to the
terms of Section 3.8 herein. The “Daily Rate” is the applicable
annual rate provided herein divided by 360. The “Daily Contract
Balance” is the amount of the outstanding principal debt which
Dealer owes to CDF on the Accounts Receivable Facility at the end
of each day(including the amount of all Electronic Transfers
authorized) after CDF has credited the payments which it has
received on the Accounts Receivable Facility, subject to the
terms of Section 3.8 herein.
	 
	2.1.2	 	Fees. Dealer agrees to pay to CDF an advance fee
equal to    n/a   percent (n/a%) on each advance
to Dealer under the Accounts Receivable Facility.
	 
	2.1.3	 	Maximum Interest. CDF intends to strictly conform to
the usury laws governing this Agreement. Regardless of any
provision contained herein or in any other document, CDF shall
never be deemed to have contracted for, charged or be entitled to
receive, collect or apply as interest any amount in excess of the
maximum amount allowed by applicable law. If CDF ever receives
any amount which, if considered to be interest, would exceed the
maximum amount permitted by law, CDF will apply such excess
amount to the reduction of the unpaid principal balance which
Dealer owes, and then will pay any remaining excess to Dealer.
In determining whether the interest paid or payable exceeds the
highest lawful rate, Dealer and CDF shall, to the maximum extent
permitted under applicable law: (a) characterize any
non-principal payment (other than payments which are expressly
designated as interest payments hereunder) as an expense or fee
rather than as interest; (b) exclude voluntary pre-payments and
the effect thereof; and (c) spread the total amount of interest
throughout the entire term of this Agreement so that the interest
rate is uniform throughout such term.

	2.2	 	Payments. Any payment under this Agreement which would otherwise
be due on a day which is not a Business Day, shall be due on the next
succeeding Business Day, with such extension of time included in any
calculation of applicable finance charges.

 

 

Exhibit 10.41

	2.2.1	 	Billing Statement. CDF will send Dealer a monthly
billing statement(s) identifying all charges due on Dealer’s
account with CDF. The interest and fee charges specified on each
billing statement will be: (a) due and payable in full
immediately on receipt, and (b) an account stated, unless CDF
receives Dealer’s written objection thereto within fifteen (15)
days after it is mailed to Dealer. If CDF does not receive, by
the 25th day of any given month, payment of all charges accrued
to Dealer’s account with CDF during the immediately preceding
month, Dealer will (to the extent allowed by law) pay CDF a late
fee equal to the greater of $5 or 5% of the amount of such
finance charges (payment of such fee does not waive the default
caused by the late payment). Dealer will pay CDF $100 (or such
other amount as may be communicated pursuant to Section 2.2.2
below) for each of Dealer’s checks returned unpaid for
insufficient funds and for each ACH (as defined below) debit
rejected by Dealer’s bank due to insufficient funds in Dealer’s
accounts (each, an “NSF check”) (such $100 payment repays CDF’s
estimated administrative costs; it does not waive the default
caused by the NSF check). CDF may adjust the billing statement
at any time to conform to applicable law and this Agreement.
Dealer waives the right to direct the application of any payments
hereafter received by CDF on account of the Obligations. CDF
will have the continuing exclusive right to apply and reapply any
and all such payments in such manner as CDF may deem advisable
notwithstanding any entry by CDF upon its books and records.
	 
	2.2.2	 	Fees. From time to time, CDF may provide written
notice to Dealer of new or changed fees (including those for
Electronic Transfers), finance charges, policies, practices and
other costs (collectively, “Fees”) payable by, or applicable to,
Dealer and relating to Dealer’s account generally, or in
connection with specific services, or events, to be effective no
earlier than five (5) Business Days following receipt by Dealer
of such notice as CDF shall advise. Such notice may be delivered
by mail, courier or electronically in a separate writing, or set
forth in the billing statement. Dealer shall be deemed to have
accepted such Fees by either: (i) making any request for
financing after the effective date of such notice; or (ii)
failing to notify CDF in writing of any objection to a billing
statement or written notice advising of such Fee within fifteen
(15) days after such notice has been sent to Dealer.

	2.3	 	One Loan. CDF may combine all of CDF’s advances to Dealer or on
Dealer’s behalf, whether under this Agreement or any Other Agreements,
and whether provided by one or more of CDF’s branch offices, together
with all finance charges, fees and expenses related thereto, to make
one debt owed by Dealer.

	3.	 	ACCOUNTS RECEIVABLE FACILITY — ADDITIONAL PROVISIONS

	3.1	 	Schedules. Dealer will, no less than weekly or as otherwise
agreed to, furnish CDF with a schedule of Accounts (“Schedule”) which
will: (a) describe all Accounts created or acquired by Dealer since
the last Schedule furnished CDF; (b) inform CDF of any rejection of
goods by any obligor, delays in delivery of goods, non-performance of
contracts and of any assertion of any claim, offset or counterclaim by
any obligor; and (c) inform CDF of any adverse information known to
Dealer that relates to the financial condition of any obligor.
	 
	3.2	 	Available Credit. On receipt of each Schedule, CDF will credit
Dealer with such amount as CDF may deem advisable, up to the lesser of
(a) eighty five percent (85%) of the net amount of the eligible
Accounts listed in such Schedule, and (b) Dealer’s maximum Accounts
Receivable Facility from time to time established by CDF (such lesser
amount being referred to as the “Available Credit”). If, for any
reason, Dealer’s outstanding loans under Dealer’s Accounts Receivable
Facility shall at any time exceed Dealer’s Available

 

 

Exhibit 10.41

	 	 	Credit, Dealer will immediately repay to CDF the amount of such
excess. No loans need be made by CDF if Dealer is in Default.
	 
	3.3	 	Ineligible Accounts. CDF will have the sole right to determine
eligibility of Accounts and, without limiting CDF’s discretion in that
regard, the following Accounts will be deemed ineligible: (a)
Accounts created from the sale of goods and services that allow for
payment to be made more than thirty (30) days from the date of sale;
(b) Accounts unpaid more than ninety (90) days from date of invoice;
(c) all Accounts of any obligor if fifty percent (50%) or more of the
aggregate outstanding balance of such obligor’s Accounts are unpaid
for more than ninety (90) days from the date of invoice; (d) Accounts
for which the obligor is an officer, director, shareholder, partner,
member, owner, employee, agent, parent, subsidiary, affiliate of, or
is related to Dealer or has common shareholders, officers, directors,
owners, partners or members with Dealer; (e) consignment sales; (f)
Accounts for which the payment is or may be conditional; (g) Accounts
for which the obligor is not a commercial or institutional entity or
is not a resident of the United States or Canada; (h) Accounts with
respect to which any warranty or representation provided in Subsection
3.4 or Subsection 5.1 is not true and correct; (i) Accounts which
represent goods or services purchased for a personal, family or
household purpose; (j) Accounts which represent goods used for
demonstration purposes or loaned by the Dealer to another party; (k)
Accounts which are progress payment, barter, or contra accounts; (l)
Accounts in which CDF does not have a perfected, first security
interest therein; and (m) any and all other Accounts which CDF deems
to be ineligible. If CDF determines that any Account is or becomes an
ineligible Account, upon five (5) days prior notice thereof from CDF,
Dealer will pay to CDF an amount equal to the monies loaned by CDF for
such ineligible Account.
	 
	3.4	 	Warranties and Representations. For each Account which Dealer
lists on any Schedule, Dealer warrants and represents to CDF that at
all times: (a) such Account is genuine; (b) such Account is not
evidenced by a judgment or promissory note or similar instrument or
agreement; (c) it represents an undisputed bona fide transaction
completed in accordance with the terms of the invoices and purchase
orders relating thereto; (d) the goods sold or services rendered which
resulted in the creation of such Account have been delivered or
rendered to and accepted by the obligor; (e) the amounts shown on the
Schedules, Dealer’s books and records and all invoices and statements
delivered to CDF with respect thereto are owing to Dealer and are not
contingent; (f) no payments have been or will be made thereon except
payments turned over to CDF; (g) there are no offsets, counterclaims
or disputes existing or asserted with respect thereto and Dealer has
not made any agreement with any obligor for any deduction or discount
of the sum payable thereunder except regular discounts allowed by
Dealer in the ordinary course of its business for prompt payment which
have been disclosed to CDF; (h) there are no facts or events known to
Dealer which in any way impair the validity or enforceability thereof
or reduce the amount payable thereunder from the amount shown on the
Schedules, Dealer’s books and records and the invoices and statements
delivered to CDF with respect thereto; (i) all persons acting on
behalf of obligors thereon have the authority to bind the obligor to
the knowledge of Dealer; (j) following the date of the initial funding
pursuant to this Agreement, the goods sold or transferred giving rise
thereto were not, immediately prior to such sale or transfer, subject
to any lien, claim, encumbrance or security interest which is superior
to that of CDF; and (k) there has been no material adverse change in
the obligor’s financial condition known to Dealer since the creation
of the Account, and there are no proceedings or actions known to
Dealer which are threatened or pending against any obligor thereon
which might result in any material adverse change in such obligor’s
financial condition.
	 
	3.5	 	Notes. Loans made pursuant to this Agreement need not be
evidenced by promissory notes unless otherwise required by CDF in
CDF’s sole discretion.

 

 

Exhibit 10.41

	3.6	 	Certain Charges. Dealer will: (a) reimburse CDF for all charges
made by banks incurred in servicing the Accounts Receivable and
inventory facilities, including charges for collection of checks and
other items of payment, and (b) pay CDF’s reasonable fees for
transfers of funds to or from the Dealer. CDF may, from time to time,
announce its fees for transfers of funds to or from the Dealer,
including the issuance of Electronic Transfers.
	 
	3.7	 	Collections. Unless otherwise directed by CDF, to expedite
collection of Accounts for the benefit of CDF, Dealer shall notify all
of its obligors to make payment of the Accounts to one or more
lock-boxes under the sole control of CDF. The lock-box, and all
accounts into which the proceeds of any such lock-box(es) are
deposited, shall be established at banks selected by the Dealer and
reasonably satisfactory to CDF. Dealer shall issue to any such banks
an irrevocable letter of instruction, in form and substance reasonably
acceptable to CDF, directing such banks to deposit all payments or
other remittances received in the lock-box to such account or accounts
as CDF shall direct, for application against the outstanding balance
of the Obligations. All funds deposited in the lock-box or any such
account immediately shall become the property of CDF, and any
disbursements of the proceeds in the lock-box or any such account will
only be made to CDF. Dealer shall obtain the agreement of such banks
to waive any offset rights against the funds so deposited and
otherwise establish CDF’s control thereof as secured party under the
Uniform Commercial Code. CDF assumes no responsibility for such
lock-box arrangement, including, without limitation, any claim of
accord and satisfaction or release with respect to deposits which any
banks accept thereunder. All remittances which Dealer receives in
payment of any Accounts, and the proceeds of any of the other
Collateral, shall be: (i) kept separate and apart from Dealer’s own
funds so that they are capable of identification as CDF’s property;
(ii) held by Dealer as trustee of an express trust for CDF’s benefit;
and (iii) shall be immediately deposited in such accounts designated
by CDF. All proceeds received or collected by CDF with respect to
Accounts, and reserves and other property of Dealer in possession of
CDF at any time or times hereafter, may be held by CDF without
interest to Dealer until all Obligations are paid in full or applied
by CDF on account of the Obligations. CDF may release to Dealer such
portions of such reserves and proceeds as CDF may determine. Upon the
occurrence and during the continuance of a Default, CDF may notify the
obligors that the Accounts have been assigned to CDF, collect the
Accounts directly in its own name and charge the collection costs and
expenses, including attorneys’ fees, to Dealer. CDF has no duty to
protect, insure, collect or realize upon the Accounts to preserve
rights in them.
	 
	3.8	 	Collection Days. All payments and all amounts received on any
Account will be credited by CDF to Dealer’s account (subject to final
collection thereof) after allowing one (1) Business Day for
collection of checks or other instruments.
	 
	3.9	 	Power of Attorney. Dealer irrevocably appoints CDF (and any
person designated by it) as Dealer’s true and lawful attorney with
full power to at any time, in the discretion of CDF (whether or not
Default has occurred) to: (a) endorse the name of Dealer upon any of
the items of payment or proceeds and deposit the same in the account
of CDF for application to the Obligations; (b) sign the name of Dealer
to verify the accuracy of the Accounts; (c) sign the name of Dealer on
any document or instrument that CDF shall deem necessary or
appropriate to perfect and maintain perfected the security interests
in the Collateral under this Agreement and the Other Agreements; (d)
supply any omitted information and correct errors in any documents
between CDF and Dealer; and (e) initiate and resolve any insurance
claim pertaining to the Collateral (such right to settle an insurance
claim shall only be exercisable if Dealer is in default), endorse
Dealer’s name on any check, instrument or other item of payment
received with respect to any insurance claim. In the event of a
Default, Dealer irrevocably appoints CDF (and any person designated by
it) as Dealer’s true and lawful attorney with full power to at any
time, in the discretion of CDF to: (i) demand payment, enforce payment
and otherwise exercise all of Dealer’s rights, and remedies with
respect to the collection of any Accounts; (ii) settle, adjust,
compromise,

 

 

Exhibit 10.41

	 	 	extend or renew any Accounts; (iii) settle, adjust or compromise any
legal proceedings brought to collect any Accounts; (iv) sell or assign
any Accounts upon such terms, for such amounts and at such time or
times as CDF may deem advisable; (v) discharge and release any
Accounts; (vi) prepare, file and sign Dealer’s name on any Proof of
Claim in Bankruptcy or similar document against any obligor; (vii)
endorse the name of Dealer upon any chattel paper, document,
instrument, invoice, freight bill, bill of lading or similar document
or agreement relating to any Account or goods pertaining thereto; and
(viii) take control in any manner of any item of payments or proceeds
and for such purpose to notify the Postal Authorities to change the
address for delivery of mail addressed to Dealer to such address as
CDF may designate. The power of attorney is for value and coupled
with an interest and is irrevocable so long as any Obligations remain
outstanding and by CDF exercising such right, CDF shall not waive any
right against Dealer until the Obligations are paid in full.
	 
	3.10	 	Continuing Requirements. Advances hereunder will be made by CDF,
at Dealer’s direction, by paper check, electronic transfer by
Automated Clearing House (“ACH”), Fed Wire Funds Transfer (“Fed Wire”)
or such other electronic means as CDF may announce from time to time
(payments to or from Dealer by ACH, Fed Wire and such other electronic
transfer are collectively referred to as “Electronic Transfers”). If
Dealer does not request advances be made in a specific method of
transfer, CDF may determine from time to time in its sole discretion
what method of transfer to use. Dealer will: (a) if from time to
time required by CDF, immediately upon their creation, deliver to CDF
copies of all invoices, delivery evidences and other such documents
relating to each Account; (b) not permit or agree to any extension,
compromise or settlement or make any other material change to any
Account; (c) affix appropriate endorsements or assignments upon all
such items of payment and proceeds so that the same may be properly
deposited by CDF to CDF’s account; (d) immediately notify CDF in
writing which Accounts may be deemed ineligible as defined in
Subsection 3.3; (e) mark all chattel paper and instruments now owned
or hereafter acquired by it to show that the same are subject to CDF’s
security interest and immediately thereafter deliver such chattel
paper and instruments to CDF with appropriate endorsements and
assignments to CDF; (f) within ten (10) days after the end of each
month, provide CDF with a detailed aging of its Accounts for each
month, together with the names and addresses of all obligors.
	 
	3.11	 	Release. To the extent permissible under applicable law, Dealer
releases CDF from all claims and causes of action which Dealer may now
or hereafter have for any loss or damage to it claimed to be caused by
or arising from: (a) any failure of CDF to protect, enforce or
collect, in whole or in part, any Account; (b) CDF’s notification to
any obligors thereon of CDF’s security interest in any of the
Accounts; (c) CDF’s directing any obligor to pay any sum owing to
Dealer directly to CDF; and (d) any other act or omission to act on
the part of CDF, its officers, agents or employees, except for willful
misconduct. CDF will have no obligation to preserve rights to
Accounts against prior parties. Dealer waives all rights of offset
Dealer may have against CDF.
	 
	3.12	 	Reviews. Dealer grants CDF an irrevocable license to enter
Dealer’s business locations during normal business hours with three
(3) days notice to Dealer (unless Dealer is in default under this
Agreement or would be in default hereunder with the passage of time,
the giving of notice, or both, in any such event no advance notice
will be required hereunder) to: (a) account for and inspect all
Collateral; and (b) examine and copy Dealer’s books, records, files
and business procedures and practices. CDF may, without notice to
Dealer and at any time or times hereafter, verify the validity, amount
or any other matter relating to any Account by mail, telephone, or
other means, in the name of Dealer or CDF.
	 
	3.13	 	Payment of Obligations. CDF shall have the right to make
advances under the Accounts Receivable Facility at any time and from
time to time to cause timely repayment of any of the Obligations,
including any Obligations under any Agreement for Wholesale

 

 

Exhibit 10.41

	 	 	Financing, and may directly pay and apply the proceeds of such
advances to such repayment.

	4.	 	SECURITY — COLLATERAL

	4.1	 	Security Interest. To secure payment of all of Dealer’s current
and future Obligations and to secure Dealer’s performance of all of
the provisions under this Agreement and the Other Agreements, Dealer
grants CDF a security interest in all of Dealer’s inventory,
equipment, fixtures, accounts, chattel paper, instruments, deposit
accounts, documents, general intangibles, and letter of credit rights
and other supporting obligations, and all judgments, claims, insurance
policies, and payments owed or made to Dealer thereon; all whether now
owned or hereafter acquired, and all attachments, accessories,
accessions, returns, repossessions, exchanges, substitutions and
replacements thereto, and all proceeds thereof (collectively,
“Collateral”). All of such terms for which meanings are provided in
the Uniform Commercial Code of the applicable state, as the same may
be amended, are used herein with such meanings. Dealer covenants with
CDF that CDF may realize upon all or part of any Collateral in any
order it desires and any realization by any means upon any Collateral
will not bar realization upon any other Collateral. Dealer’s
liability is direct and unconditional and will not be affected by the
release or nonperfection of any security interest granted hereunder.

	5.	 	WARRANTIES AND REPRESENTATIONS

	5.1	 	Affirmative Warranties and Representations. Except as otherwise
specifically provided in the Other Agreements, Dealer warrants and
represents to CDF that: (a) Dealer has good title to all Collateral;
(b) CDF’s security interest in the Accounts will at all times
constitute a perfected, first security interest in such Accounts and
will not become subordinate to the security interest or claim of any
Entity; (c) Dealer will execute all documents CDF requests to perfect
and maintain CDF’s security interest in the Collateral and to fully
consummate the transactions contemplated under this Agreement and the
Other Agreements and will cause all third parties in possession of
Collateral to provide such acknowledgment or control of CDF’s security
interest as CDF may require; (d) Dealer will at all times be duly
organized, existing, in good standing, qualified and licensed to do
business in each jurisdiction in which the nature of its business or
property so requires, except where a failure would not have a material
adverse effect on Dealer; (e) Dealer has the right and is duly
authorized to enter into this Agreement; (f) Dealer’s execution of
this Agreement does not, and will not, constitute a breach of any law
or agreement to which Dealer is now or hereafter becomes bound, except
where a breach would not have a material adverse effect on Dealer; (g)
there are and, to Dealer’s knowledge, will be no actions or
proceedings pending or threatened against Dealer which might result in
any material adverse change in Dealer’s financial or business
condition, other than those actions disclosed in En Pointe
Technologies, Inc.’s filings with the Securities and Exchange
Commission; (h) Dealer will maintain the Collateral in good condition,
ordinary wear and tear excepted; (i) Dealer has duly filed and will
duly file all tax returns required by law and will pay when due all
taxes, levies, assessments and governmental charges other than any
amounts disputed in good faith; (j) Dealer will maintain a system of
accounting in accordance with generally accepted accounting principles
and account records which contain such information in a format as may
be reasonably requested by CDF; (k) Dealer will keep and maintain all
of its books and records pertaining to the Accounts and other
Collateral at its chief executive office designated in this Agreement,
or at such other location designated in writing to CDF in subparagraph
5.1(l) below; (l) Dealer will give CDF thirty (30) days prior written
notice of any change in Dealer’s identity, name, form of business
organization, ownership, chief executive office, Collateral locations
or other business locations; (m) Dealer will notify CDF of the
commencement of material legal proceedings against Dealer or any

 

 

Exhibit 10.41

	 	 	Guarantor; (n) Dealer will comply with all applicable laws, except
where a failure to comply would not have a material adverse effect on
Dealer; (o) Dealer has provided CDF with a copy of Dealer’s
Certificate of Incorporation, and will provide any subsequent
amendments thereto bearing indicia of filing from the appropriate
governmental authority, or such other documents verifying Dealer’s
true and correct legal name; and (p) Dealer will keep the Collateral
insured for its full insurable value under an “all risk” property
insurance policy with a company reasonably acceptable to CDF, naming
CDF as a lender loss-payee and containing standard lender’s loss
payable and termination provisions. Dealer will provide CDF with
written evidence of such property insurance coverage and lender’s
loss-payee endorsement.
	 
	5.2	 	Negative Covenants. Dealer will not at any time (without CDF’s
prior written consent): (a) grant to or in favor of any Entity a
security interest in or permit to exist a lien, claim or encumbrance
in the Accounts which is superior to the interest of CDF; (b) other
than in the ordinary course of its business, sell, lease or otherwise
dispose of or transfer any of its assets; (c) merge or consolidate
with another Entity; (d) acquire the assets or ownership interest of
any other Entity in excess of One Million Dollars ($1,000,000.00), so
long as, both before and after giving effect to same, Dealer is not
and would not be in default under this Agreement or the Other
Agreements or with respect to the CDF Obligations, whether as a result
of same or otherwise; (e) enter into any transaction not in the
ordinary course of business; (f) guarantee or indemnify or otherwise
become in any way liable with respect to the obligations of any
Entity, except by endorsement of instruments or items of payment for
deposit to the general account of Dealer or which are transmitted or
turned over to CDF on account of the Obligations or except for the
giving of indemnities in connection with the sale of inventory or
other dispositions permitted hereunder; (g) redeem, retire, purchase
or otherwise acquire, directly or indirectly, any of Dealer’s capital
stock; (h) make any change in Dealer’s capital structure or in any of
its business objectives or operations which might in any way adversely
affect the ability of Dealer to repay the Obligations; (i) make any
distribution of Dealer’s assets not in the ordinary course of
business; (j) incur any debts outside of the ordinary course of
business except renewals or extensions of existing debts and interest
thereon; (k) make any loans, advances, contributions or payments of
money or in goods to any affiliated entity, other than En Pointe
Global Services, Inc. in an aggregate amount not to exceed One Million
Two Hundred Thousand Dollars ($1,200,000.00) outstanding at any time ,
En Pointe Technologies, Inc. or to any officer, director, stockholder,
member or partner of Dealer or of any such entity (except for
compensation for personal services actually rendered); (l) move any
Collateral financed by CDF out of the United States of America, except
for Collateral that has been acquired by Dealer as a fixed asset and
moved to Dealer’s outsourcing location in Pakistan, not to exceed
Three Hundred Thousand Dollars ($300,000.00) in the aggregate during
any twelve month period, and will not be included in any inventory
reports.
	 
	5.3	 	Financial Statements. Dealer will deliver to CDF, in a form
satisfactory to CDF: (a) within ninety (90) days after the end of
each of Dealer’s fiscal years, a reasonably detailed balance sheet and
income statement as of the last day of such fiscal year covering
Dealer’s operations for such fiscal year; (b) within forty-five (45)
days after the end of each of Dealer’s fiscal quarters, a reasonably
detailed balance sheet and income statement as of the last day of such
quarter covering Dealer’s operations for such quarter; (c) within ten
(10) days after CDF’s request , any other information relating to the
Collateral or the financial condition of Dealer or any Guarantor.
Dealer represents that all financial statements and information which
have been or may hereafter be delivered by Dealer or any Guarantor to
CDF are and will be correct in all material respects and prepared in
accordance with generally accepted accounting principles consistently
applied, and there has been no material adverse change in the
financial or business

 

 

Exhibit 10.41

	 	 	condition of Dealer or any Guarantor since the submission to CDF of
such financial statements, and Dealer acknowledges CDF’s reliance
thereon.

	6.	 	DEFAULT

	6.1	 	Definition. Dealer will be in default under this Agreement if:
(a) Dealer breaches any terms in this Agreement or in any Other
Agreements and such breach is not cured within five (5) Business Days
from the date of notice of breach from CDF, it being understood that
no such cure period will be available for a breach of Dealer’s
financial covenants, a breach under section 6(b) and any other
subsentence of this Section 6.1 for which no express cure period is
provided; (b) Dealer fails to pay any of the Obligations when due and
payable; (c) any Guarantor of Dealer’s debts to CDF terminates its
guaranty, or otherwise breaches any terms contained in any guaranty or
other agreement between Guarantor and CDF and such breach is not cured
within five (5) Business Days from notice of breach from CDF; (d) any
representation, statement, report, or certificate which Dealer or any
Guarantor makes or delivers to CDF is not accurate when made; (e)
Dealer abandons Collateral in excess of Fifty Thousand Dollars
($50,000.00) in the aggregate during the terms of this Agreement; (f)
Dealer or any Guarantor is or becomes in default in the payment of any
debt in excess of $500,000.00 in the aggregate in any twelve month
period owed to any third party, after expiration of any applicable
cure period, or Dealer is or becomes in default under any loan
agreement, after expiration of any applicable cure period; (g) an
attachment, sale or seizure issues or is executed against any assets
of Dealer or of any Guarantor in excess of Fifty Thousand Dollars
($50,000.00) in the aggregate during the terms of this Agreement; (h)
[intentionally deleted] (i) Dealer or any Guarantor ceases existence
as a corporation or ceases or suspends business; (j) Dealer or any
Guarantor, as applicable, makes a general assignment for the benefit
of creditors; (k) Dealer or any Guarantor, as applicable, becomes
insolvent or voluntarily or involuntarily becomes subject to the
Federal Bankruptcy Code, any state insolvency law or any similar law,
provided, however, that Dealer or any Guarantor shall have a period of
sixty (60) days within which to discharge any involuntary bankruptcy
action or proceeding (it being agreed by Dealer, however, that CDF
will not be obligated to make any additional advances during such
sixty (60) day period); (l) any receiver is appointed for any assets
of Dealer or any Guarantor, as applicable; (m) Dealer loses, or is in
default of, any franchise, license or right to deal in any Collateral
which CDF finances, except where such loss or default would not have a
material adverse effect on Dealer; (n) Dealer or any Guarantor
misrepresents Dealer’s or such Guarantor’s financial condition.

	6.2	 	Rights of CDF. In the event of a Default:

	(a)	 	CDF may at any time, without notice or demand to
Dealer, do any one or more of the following: declare all or any
of the Obligations immediately due and payable; exercise any
rights under applicable law; and/or cease extending any
additional credit to Dealer (which shall not be construed to
limit the discretionary nature of this credit facility).
	 
	(b)	 	Dealer will segregate and keep the Collateral in trust
for CDF, and will not dispose of or use any Collateral, nor
further encumber any Collateral.
	 
	(c)	 	Upon CDF’s demand, Dealer will immediately deliver the
Collateral to CDF at a place specified by CDF, together with all
related documents; or CDF may without notice or demand to Dealer,
take immediate possession of the Collateral together with all
related documents.
	 
	(d)	 	CDF may, without notice, apply a default finance charge
to Dealer’s outstanding principal indebtedness equal to the
default rate specified in Dealer’s financing program with CDF, if
any, or if there is none so specified, at the lesser of 3% per
annum above the rate in effect immediately prior to the Default,
or the highest lawful contract rate of interest permitted under
applicable law.

 

 

Exhibit 10.41

	(e)	 	CDF may, without notice to Dealer and at any time or
times enforce payment and collect, by legal proceedings or
otherwise, Accounts in the name of Dealer or CDF; open Dealer’s
mail and overnight delivery packages, and take control of any
cash or non-cash items of payment or proceeds of Accounts and of
any rejected, returned, repossessed or stopped in transit goods
relating to Accounts. CDF may at its sole election and without
demand enter, with or without process of law, any premises where
Collateral might be and, without charge or liability to CDF
therefor, do one or more of the following: (i) take possession
of the Collateral and use or store it in said premises or remove
it to such other place or places as CDF may deem convenient; (ii)
take possession of all or part of such premises and the
Collateral and place a custodian in the exclusive control thereof
until completion of enforcement of CDF’s security interest in the
Collateral or until CDF’s removal of the Collateral and, (iii)
remain on such premises and use the same, together with Dealer’s
materials, supplies, books and records, including without
limitation Dealer’s computer system and electronic records, for
the purpose of performing all acts necessary and incidental to
the collection or liquidation of such Collateral.
	 
	(f)	 	Dealer will pay all of CDF’s reasonable attorneys’ fees
and collection expenses which CDF incurs in enforcing CDF’s
rights hereunder.
	 
	 	 	All of CDF’s rights and remedies are cumulative. CDF’s failure
to exercise any of its rights or remedies hereunder will not
waive any of CDF’s rights or remedies as to any past, current
or future Default.

	6.3	 	Sale of Collateral. Dealer agrees that if CDF conducts a sale of
any Collateral by requesting bids from ten (10) or more dealers or
distributors in that type of Collateral or pursuant to any internet
auction or sale posting on a third party auction sale site, any sale
by CDF of such Collateral in bulk or in parcels within one hundred
twenty (120) days of: (a) CDF’s taking possession and control of such
Collateral; or (b) when CDF is otherwise authorized to sell such
Collateral; whichever occurs last, to the bidder submitting the
highest cash bid therefor, is a commercially reasonable sale of such
Collateral under the Uniform Commercial Code. Dealer agrees that the
purchase of any Collateral by a vendor, as provided in any agreement
between CDF and the vendor, is a commercially reasonable disposition
and private sale of such Collateral under the Uniform Commercial Code,
and no request for bids shall be required. Dealer further agrees that
seven (7) or more days prior written notice will be commercially
reasonable notice of any public or private sale (including any sale to
a vendor). Dealer irrevocably waives any requirement that CDF retain
possession and not dispose of any Collateral until after an
arbitration hearing, arbitration award, confirmation, trial or final
judgment. If CDF disposes of any Collateral other than as herein
contemplated, the laws of the state governing this Agreement will
determine the commercial reasonableness of such disposition.

	7.	 	MISCELLANEOUS

	7.1	 	Termination. This Agreement will continue in full force and
effect (except that it may be terminated by either party upon thirty
(30) days written notice to the other party or immediately by CDF in
the exercise of its rights and remedies upon Default by Dealer) for a
period of three (3) years from the first day of the first month
following the date hereof and for successive one (1) year periods
thereafter, subject to termination at the end of any such period on at
least thirty (30) days prior written notice by either party to the
other party. If such notice of termination is given by Dealer to CDF,
such notice will be ineffective unless Dealer pays to CDF all
Obligations on or before the termination date. Any termination of
this Agreement by Dealer or CDF will have the effect of accelerating
the maturity of all Obligations not then otherwise due, thereby making
all of the

 

 

Exhibit 10.41

	 	 	Obligations immediately due and payable on the effective date of
termination, and will be without any additional penalty or premium of
any kind.

	7.1.1	 	Effect of Termination. Dealer will remain obligated to
CDF for CDF’s advances or commitments made before the effective
termination date of this Agreement. CDF will retain all of its
rights, interests and remedies hereunder until Dealer has paid
CDF in full. All waivers, and the agreement to arbitrate, set
forth in this Agreement will survive any termination of this
Agreement.

	7.2	 	Collection. Checks and other instruments delivered to CDF on
account of the Obligations will constitute conditional payment until
such items are actually paid to CDF.
	 
	7.3	 	Waivers. Dealer and CDF irrevocably waive all rights to claim
punitive and/or exemplary damages. Dealer waives all notices of
default and non-payment at maturity of any or all of the Accounts.
	 
	7.4	 	Reimbursement. Dealer will assume and reimburse CDF upon demand
for all filing and recording fees and taxes payable in connection with
the filing or recording of all documents under this Agreement and the
Other Agreements.
	 
	7.5	 	Additional Obligations. CDF, without waiving or releasing any
Obligation or Default, may perform any Obligations that Dealer fails
or refuses to perform. If Dealer fails to pay any taxes, fees or
other obligations which may impair CDF’s interest in the Collateral,
or fails to keep the Collateral insured, CDF may, but shall not be
required to, pay such amounts. All sums paid by CDF on account of the
foregoing and any expenses, including reasonable attorneys’ fees, will
be a part of the Obligations, payable on demand and secured by the
Collateral.
	 
	7.6	 	NO ORAL AGREEMENTS. ORAL AGREEMENTS OR COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBTS ARE NOT ENFORCEABLE.
TO PROTECT DEALER AND CDF FROM MISUNDERSTANDING OR DISAPPOINTMENT, ALL
AGREEMENTS COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING AND THE
OTHER AGREEMENTS, WHICH ARE THE COMPLETE AND EXCLUSIVE STATEMENTS OF
THE AGREEMENT BETWEEN THE PARTIES, EXCEPT AS SPECIFICALLY PROVIDED
HEREIN OR AS THE PARTIES MAY LATER AGREE IN WRITING TO MODIFY IT.
THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES Time is of the
essence regarding Dealer’s performance of its obligations to CDF. CDF
may refrain from or postpone enforcement of this Agreement or any
Other Agreements between CDF and Dealer without prejudice and the
failure to strictly enforce these agreements will not create a course
of dealing which waives, amends or modifies such agreements. The
express terms of this Agreement will not be modified by any course of
dealing, usage of trade, or custom of trade which may deviate from the
terms hereof.
	 
	7.7	 	Severability. If any provision of this Agreement or the Other
Agreements or the application thereof is invalid or unenforceable, the
remainder of this Agreement and the Other Agreements will not be
impaired or affected and will remain binding and enforceable.
	 
	7.8	 	Supplement. If Dealer and CDF have previously executed Other
Agreements pertaining to all or any part of the Collateral, this
Agreement will supplement such Other Agreement, and this Agreement
will neither be deemed a novation nor a termination of any such Other
Agreement, nor will execution of this Agreement be deemed a
satisfaction of any obligation secured by such Other Agreement. In
the event of any conflict between the terms of this Agreement and any
previously executed Business Financing Agreement between CDF and
Dealer, the terms of this Agreement will control.
	 
	7.9	 	Section Titles. The Section titles used herein are for
convenience only, and do not define or limit the contents of any
Section.
	 
	7.10	 	Binding Effect. Dealer cannot assign its interest in this
Agreement or any Other Agreements without CDF’s prior written consent.
CDF may assign or participate CDF’s

 

 

Exhibit 10.41

	 	 	interest, in whole or in part, without Dealer’s consent. This
Agreement and the Other Agreements will protect and bind CDF’s and
Dealer’s respective heirs, representatives, successors and assigns.
	 
	7.11	 	Notices. Except as otherwise stated herein, all notices,
arbitration claims, responses, requests and documents will be
sufficiently given or served if mailed or delivered: (a) to Dealer at
Dealer’s chief executive office specified above; and (b) to CDF at 655
Maryville Centre Drive, St. Louis, Missouri 63141-5832, Attention:
General Counsel, or such other address as the parties may hereafter
specify in writing.
	 
	7.12	 	Receipt of Agreement. Dealer acknowledges that it has received a
true and complete copy of this Agreement. Dealer has read and
understood this Agreement. Notwithstanding anything herein to the
contrary, CDF may rely on any facsimile copy, electronic data
transmission, or electronic data storage of: this Agreement, any
billing statement, financing statement, authorization to pre-file
financing statements, financial statements or other reports, which
will be deemed an original, and the best evidence thereof for all
purposes.
	 
	7.13	 	Information. CDF may provide to any third party any standard
credit information on Dealer that CDF may from time to time possess in
response to a request for a credit rating, and any other information
on Dealer that CDF may from time to time possess if required by law.
CDF may obtain from any third party any credit, financial or other
information regarding Dealer that such third party may from time to
time possess.

	8.	 	BINDING ARBITRATION

	8.1	 	Arbitrable Claims. Except as otherwise specified below, all
actions, disputes, claims and controversies under common law,
statutory law or in equity of any type or nature whatsoever, whether
arising before or after the date of this Agreement, and whether
directly or indirectly relating to: (a) this Agreement and/or any
amendments and addenda hereto, or the breach, invalidity or
termination hereof; (b) any previous or subsequent agreement between
CDF and Dealer; (c) any act committed by CDF or by any parent company,
subsidiary or affiliated company of CDF (the “CDF Companies”), or by
any employee, agent, officer or director of a CDF Company whether or
not arising within the scope and course of employment or other
contractual representation of the CDF Companies provided that such act
arises under a relationship, transaction or dealing between CDF and
Dealer; and/or (d) any other relationship, transaction or dealing
between CDF and Dealer (collectively the “Disputes”), will be subject
to and resolved by binding arbitration. Notwithstanding the
foregoing, the parties agree that either party may pursue claims
against the other that do not exceed Fifteen Thousand Dollars
($15,000) in the aggregate in a court of competent jurisdiction.
Service of arbitration claims shall be acceptable if made by U.S. mail
or overnight delivery to the address for the party described herein.

	8.2	 	Administrative Body.
 All arbitration hereunder will be conducted
in accordance with the Commercial Arbitration Rules of either: (a) The
American Arbitration Association (“AAA”); or (b) United States
Arbitration & Mediation (“USA&M”). The party first filing an
arbitration claim shall designate which arbitration forum and rules
are to be applied for all disputes between the parties. The
arbitration rules are found at www.adr.org for AAA, and at
www.usam-midwest.com for USA&M. AAA claims may be filed in any AAA
office. Claims filed with USA&M shall be filed in their Midwest
office located at 720 Olive Street, Suite 2020, St. Louis, Missouri
63101. All arbitrator(s) selected will be attorneys with at least
five (5) years secured transactions experience. A panel of three
arbitrators shall hear all claims exceeding One Million Dollars
($1,000,000), exclusive of interest, costs and attorneys’ fees. The
arbitrator(s) will decide if any inconsistency exists between the
rules of the applicable arbitral forum and the arbitration provisions
contained herein. If such inconsistency exists, the arbitration
provisions contained herein will control and supersede such rules.
The arbitrator shall follow the terms of this Agreement and the

 

 

Exhibit 10.41

	 	 	applicable law, including without limitation, the attorney-client
privilege and the attorney workproduct doctrine.
	 
	8.3	 	Hearings. Each party hereby consents to a documentary hearing
for all arbitration claims, by submitting the dispute to the
arbitrator(s) by written briefs and affidavits, along with relevant
documents. However, arbitration claims will be submitted by way of an
oral hearing if any party requests an oral hearing within thirty (30)
days after service of the claim, and that party remits the appropriate
amount for AAA’s or USA&M’s (as applicable) fees and arbitrator
compensation within ten (10) days of the designated arbitration
association’s statement for payment of all fees and arbitrator
compensation relating to the oral hearing. Each party agrees that
failure to timely pay all fees and arbitrator compensation billed to
the party requesting the oral hearing will be deemed such party’s
consent to submitting the Dispute to the arbitrator on documents and
such party’s waiver of its request for an oral hearing. The site of
all oral arbitration hearings will be in the Division of the Federal
Judicial District in which the designated arbitration association
maintains a regional office that is closest to Dealer.
	 
	8.4	 	Discovery. Discovery permitted in any arbitration proceeding
commenced hereunder is limited as follows. No later than forty (40)
days after the filing and service of a claim for arbitration, the
parties in contested cases will exchange detailed statements setting
forth the facts supporting the claim(s) and all defenses to be raised
during the arbitration, and a list of all exhibits and witnesses. No
later than twenty-one (21) days prior to the oral arbitration hearing,
the parties will exchange a final list of all exhibits and all
witnesses, including any designation of any expert witness(es)
together with a summary of their testimony; a copy of all documents
and a detailed description of any property to be introduced at the
hearing. Under no circumstances will the use of interrogatories,
requests for admission, requests for the production of documents or
the taking of depositions be permitted. However, in the event of the
designation of any expert witness(es), the following will occur: (a)
all information and documents relied upon by the expert witness(es)
will be delivered to the opposing party; (b) the opposing party will
be permitted to depose the expert witness(es); (c) the opposing party
will be permitted to designate rebuttal expert witness(es); and (d)
the arbitration hearing will be continued to the earliest possible
date that enables the foregoing limited discovery to be accomplished.
	 
	8.5	 	Exemplary or Punitive Damages. The Arbitrator(s) will not have
the authority to award exemplary or punitive damages.
	 
	8.6	 	Confidentiality of Awards. All arbitration proceedings,
including testimony or evidence at hearings, will be kept
confidential, although any award or order rendered by the
arbitrator(s) pursuant to the terms of this Agreement may be confirmed
as a judgment or order in any state or federal court of competent
jurisdiction within the federal judicial district which includes the
residence of the party against whom such award or order was entered.
This Agreement concerns transactions involving commerce among the
several states. The Federal Arbitration Act, Title 9 U.S.C. Sections
1 et seq., as amended (“FAA”) will govern all arbitration(s) and
confirmation proceedings hereunder.
	 
	8.7	 	Prejudgment and Provisional Remedies. Nothing herein will be
construed to prevent CDF’s or Dealer’s use of bankruptcy,
receivership, injunction, repossession, replevin, claim and delivery,
sequestration, seizure, attachment, foreclosure and/or any other
prejudgment or provisional action or remedy relating to any Collateral
for any current or future debt owed by either party to the other. Any
such action or remedy will not waive CDF’s or Dealer’s right to compel
arbitration of any Dispute.
	 
	8.8	 	Attorneys’ Fees. If either Dealer or CDF brings any other action
for judicial relief with respect to any Dispute (other than those set
forth in Subsections 8.1 or 8.7), the party bringing such action will
be liable for and immediately pay all of the other party’s costs and
expenses (including attorneys’ fees) incurred to stay or dismiss such
action and remove or refer such Dispute to arbitration. If either
Dealer or CDF brings or appeals an

 

 

Exhibit 10.41

	 	 	action to vacate or modify an arbitration award and such party does
not prevail, such party will pay all costs and expenses, including
attorneys’ fees, incurred by the other party in defending such action.
Additionally, if either Dealer or CDF sues the other party or
institutes any arbitration claim or counterclaim against the other
party, the losing party will pay all costs and expenses (including
attorneys’ fees) incurred by the prevailing party in the course of
bringing or defending such action or proceeding.
	 
	8.9	 	Limitations. Any arbitration proceeding must be instituted: (a)
with respect to any Dispute for the collection of any debt owed by
either party to the other, within two (2) years after the date the
last payment by or on behalf of the payor was received and applied in
respect of such debt by the payee; and (b) with respect to any other
Dispute, within two (2) years after the date the incident giving rise
thereto occurred, whether or not any damage was sustained or capable
of ascertainment or either party knew of such incident. Failure to
institute an arbitration proceeding within such period will constitute
an absolute bar and waiver to the institution of any proceeding,
whether arbitration or a court proceeding, with respect to such
Dispute. Notwithstanding the foregoing, this limitations provision
will be suspended temporarily, as of the date any of the following
events occur, and will not resume until the date following the date
either party is no longer subject to, (i) bankruptcy; (ii)
receivership; (iii) any proceeding regarding an assignment for the
benefit of creditors; or (iv) any legal proceeding, civil or criminal,
which prohibits either party from foreclosing any interest it might
have in the collateral of the other party.
	 
	8.10	 	Survival After Termination. The agreement to arbitrate will
survive the termination of this Agreement.

	9.	 	INVALIDITY/UNENFORCEABILITY OF BINDING ARBITRATION. IF THIS AGREEMENT IS
FOUND TO BE NOT SUBJECT TO ARBITRATION, ANY LEGAL PROCEEDING WITH RESPECT
TO ANY DISPUTE WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE WITHOUT A JURY. DEALER AND CDF WAIVE ANY RIGHT TO A JURY TRIAL IN
ANY SUCH PROCEEDING.

	10.	 	Governing Law. This Agreement and all Other Agreements have been
substantially negotiated, and will be substantially performed, in the
state of Missouri. Accordingly, all Disputes will be governed by, and
construed in accordance with, the laws of such state, except to the extent
inconsistent with the provisions of the FAA which shall control and govern
all arbitration proceedings hereunder.

     THIS CONTRACT CONTAINS BINDING ARBITRATION, JURY WAIVER AND PUNITIVE
DAMAGE WAIVER PROVISIONS.

     This Agreement is dated this 25 day of June, 2004.

	 	 	 	 	 	 	 	 	 	 	 
	GE COMMERCIAL DISTRIBUTION FINANCE	 	 	 	 	 	 	 	 
	CORPORATION	 	En Pointe Technologies Sales, Inc.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ David J. Lynch
	 	By:
	 	/s/ Attiazaz “Bob” Din	 	 	 	 
	

	 	
 
	 	 	 	
 	 	 	 	 
	

	 	David J. Lynch
	 	 	 	Attiazaz “Bob” Din	 	 	 	 
	

	 	Vice President of Operations
	 	 	 	Chief Executive Officer	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	ATTEST:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Robert A. Mercer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]