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SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF JULY 31, 1997
by and among
NU-KOTE INTERNATIONAL, INC.
as Borrower,
NU-KOTE HOLDING, INC.
as Guarantor,
THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF,
as Lenders,
BARCLAYS BANK PLC,
as Documentation Agent
and
NATIONSBANK OF TEXAS, N.A.
as Administrative Agent and Collateral Agent
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NU-KOTE INTERNATIONAL, INC.
NU-KOTE HOLDING, INC.
CREDIT AGREEMENT
Dated as of July 31, 1997
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS
1.1 Certain Defined Terms...................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement; Calculations; Computations... 23
1.3 Other Definitional Provisions.............................. 24
SECTION 2. AMOUNTS AND TERMS OF REVOLVING CREDIT COMMITMENTS AND
REVOLVING CREDIT LOANS
2.1 Revolving Credit Loans..................................... 24
2.2 Interest on the Revolving Credit Loans..................... 27
2.3 Fees....................................................... 28
2.4 Prepayments and Payments of Revolving Credit Loans;
Reductions in Revolving Credit Loan Commitments............ 29
2.5 Use of Proceeds............................................ 32
2.6 Capital Adequacy Adjustment................................ 33
2.7 Letters of Credit.......................................... 34
2.8 Tax Certificates........................................... 40
SECTION 3. CONDITIONS TO REVOLVING CREDIT LOANS AND LETTERS OF CREDIT
3.1 Conditions to Initial Revolving Credit Loans and Letters
of Credit.................................................. 41
3.2 Conditions to All Revolving Credit Loans................... 46
3.3 Conditions to Letters of Credit............................ 47
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Organization, Powers, Good Standing, Business and
Subsidiaries............................................... 48
4.2 Authorization of Borrowing, etc. .......................... 48
4.3 Financial Condition........................................ 49
4.4 No Material Adverse Change; No Stock Payments.............. 50
4.5 Title to Properties; Liens................................. 50
4.6 Litigation; Adverse Facts.................................. 50
4.7 Payment of Taxes........................................... 51
4.8 Materially Adverse Agreements; Performance of Agreements... 51
4.9 Governmental Regulation.................................... 51
4.10 Securities Activities...................................... 52
4.11 Employee Benefit Plans..................................... 52
4.12 Disclosure................................................. 53
4.13 Licenses, Permits and Authorizations....................... 53
4.14 Intangible Property........................................ 53
4.15 Environmental Matters...................................... 54
SECTION 5. AFFIRMATIVE COVENANTS
5.1 Financial Statements and Other Reports..................... 55
5.2 Corporate Existence, etc................................... 59
5.3 Payment of Taxes and Claims; Tax Consolidation............. 59
5.4 Maintenance of Properties; Insurance; Sales of Certain
Assets..................................................... 60
5.5 Inspection; Lender Meeting................................. 60
5.6 No Further Negative Pledges................................ 61
5.7 Compliance with Laws, etc.................................. 61
5.8 Environmental Disclosure and Inspection.................... 61
5.9 Hazardous Materials; Remedial Action....................... 62
5.10 Further Assurances; New Subsidiaries; Intellectual
Property; Landlord Waivers................................. 63
5.11 Notice of Asset Transfers.................................. 64
5.12 Deposit Accounts........................................... 65
5.13 Additional Collateral...................................... 65
5.14 Delivery of Xxxxx Shares................................... 66
SECTION 6. NEGATIVE COVENANTS
6.1 Indebtedness............................................... 66
6.2 Liens...................................................... 68
6.3 Investments................................................ 69
6.4 Contingent Obligations..................................... 72
6.5 Restricted Junior Payments................................. 73
6.6 Financial Covenants........................................ 74
6.7 Restriction on Fundamental Changes......................... 77
6.8 Sales and Leasebacks....................................... 80
6.9 Sale or Discount of Receivables............................ 80
6.10 Transactions with Shareholders, Affiliates and
Subsidiaries............................................... 80
6.11 Disposal of Subsidiary Stock............................... 81
6.12 Conduct of Business........................................ 81
6.13 Restructuring and Affiliate Reorganizations................ 82
SECTION 7. GUARANTY OF HOLDING
7.1 Guaranty by Holding........................................ 82
7.2 Terms of Guaranty.......................................... 82
SECTION 8. EVENTS OF DEFAULT
8.1 Failure to Make Payments when Due.......................... 85
8.2 Default in Other Agreements................................ 85
8.3 Breach of Certain Covenants................................ 86
8.4 Breach of Warranty......................................... 86
8.5 Other Defaults Under Agreement or Loan Documents........... 86
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. ..... 86
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. ....... 87
8.8 Judgments and Attachments.................................. 87
8.9 Dissolution................................................ 88
8.10 ERISA...................................................... 88
8.11 Withdrawal Liability Under Multiemployer Plan.............. 89
8.12 Invalidity of Guaranties................................... 89
8.13 Change of Control.......................................... 89
8.14 Impairment of Collateral................................... 90
8.15 Eurocurrency Credit Agreement.............................. 90
8.16 ERISA Lien................................................. 90
SECTION 9. AGENT
9.1 Appointment................................................ 91
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9.2 Powers; General Immunity................................... 92
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness.............................. 93
9.4 Right to Indemnity......................................... 94
9.5 Registered Persons Treated as Owner........................ 94
9.6 Collateral Documents; Appointment of Collateral Agent;
Successor Collateral Agent................................. 94
9.7 Successor Agents........................................... 95
SECTION 10. MISCELLANEOUS
10.1 Representation of Lenders.................................. 96
10.2 Assignments and Participations in Revolving Credit Loans;
Letters of Credit.......................................... 96
10.3 Expenses................................................... 98
10.4 Indemnity.................................................. 98
10.5 Set Off.................................................... 99
10.6 Ratable Sharing............................................ 99
10.7 Amendments and Waivers..................................... 100
10.8 Notices.................................................... 101
10.9 Survival of Warranties and Certain Agreements.............. 101
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative...... 102
10.11 Severability............................................... 102
10.12 Obligations Several; Independent Nature of Lenders' Rights. 102
10.13 Headings................................................... 102
10.14 Applicable Law............................................. 102
10.15 Successors and Assigns..................................... 102
10.16 Consent to Jurisdiction and Service of Process; Waiver of
Jury Trial................................................. 103
10.17 Confidentiality............................................ 103
10.18 Interest and Charges....................................... 104
10.19 Amendment, Restatement, Extension, Renewal and Increase.... 104
10.20 Counterparts; Effectiveness................................ 105
10.21 Waivers.................................................... 105
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
III FORM OF OPINIONS OF COMPANY'S COUNSEL
IV FORM OF OPINION OF XXXXXXXX XXXXXXXX & XXXXXX P.C.
V FORM OF CONFIDENTIALITY AGREEMENT
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF ASSIGNMENT AGREEMENT
VIII FORM OF REVOLVING CREDIT NOTE
IX FORM OF ACKNOWLEDGEMENT
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SCHEDULES
1.1 LENDER'S ORIGINAL REVOLVING CREDIT COMMITMENTS AND PRO RATA SHARES
4.1-C SUBSIDIARIES
4.5 LEASED LOCATIONS
4.6 EXISTING LITIGATION
4.14 TRADEMARKS AND TRADE NAMES
5.13 SUBSIDIARIES TO DELIVER COLLATERAL
6.3 EXISTING INVESTMENTS
6.7B PROPOSED CLOSED FACILITIES
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NU-KOTE INTERNATIONAL, INC.
NU-KOTE HOLDING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is dated as of July 31,
1997, and entered into by and among NU-KOTE HOLDING, INC., a Delaware
corporation ("Holding"), NU-KOTE INTERNATIONAL, INC., a Delaware corporation
("Company"), THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (together with
each financial institution that may become a party to this Credit Agreement as a
Lender as herein provided, referred to herein individually as a "Lender" and
collectively as "Lenders"), BARCLAYS BANK PLC, in its capacity as documentation
agent ("Documentation Agent"), and NATIONSBANK OF TEXAS, N.A., as administrative
agent for Lenders (hereinafter, in such capacity, together with any successors
thereto in such capacity, referred to as "Agent") and as collateral agent for
Lenders (hereinafter, in such capacity, together with any successors thereto in
such capacity, referred to as "Collateral Agent").
R E C I T A L S
WHEREAS, Holding, Company, Lenders, Documentation Agent and Agent were
parties to that certain Credit Agreement, dated as of February 24, 1995 (said
Credit Agreement, as amended or modified, the "Original Credit Agreement");
WHEREAS, Holding, Company, Lenders, Collateral Agent, Documentation Agent
and Agent heretofore restructured, increased, extended, and renewed the
indebtedness under the Original Credit Agreement to provide for one revolving
line of credit in the aggregate amount of $150,000,000 pursuant to that certain
Amended and Restated Credit Agreement dated as of October 15, 1996 (said Amended
and Restated Credit Agreement, as amended or modified prior to the date hereof,
the "First Restatement"); and
WHEREAS, Holding, Company, Lenders, Collateral Agent, Documentation Agent
and Agent desire to restructure the indebtedness under the First Restatement as
hereinafter set forth.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Holding, Company, Lenders, Agent,
Documentation Agent and Collateral Agent agree that (i) all obligations under
the First Restatement, as modified herein, shall, after the Closing Date, be
evidenced by the Notes (as defined herein), this Agreement and the other
Domestic Loan Documents, and shall be secured by, among other things, the
Collateral as granted pursuant to the Collateral Documents (as defined herein)
and (ii) the First Restatement shall be amended and restated in its entirety as
follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the following
meanings:
"ACKNOWLEDGEMENT" to be executed and delivered by Holding, Company,
ICMI, Future Graphics, Nu-kote Imaging, and Nu-kote Imperial on the Closing
Date, substantially in the form annexed hereto as EXHIBIT IX, as such may be
amended, amended and restated, supplemented or otherwise modified from time
to time.
"AFFILIATE," as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of
voting securities or by contract or otherwise.
"AGENT" has the meaning assigned to that term in the introductory
paragraph to this Agreement.
"AGGREGATE AMOUNTS DUE" has the meaning assigned to that term in
subsection 10.6.
"AGREEMENT" means this Second Amended and Restated Credit Agreement as
it may be amended, amended and restated, supplemented or otherwise modified
from time to time.
"APPLICABLE LAW" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies
or regulatory agencies applicable to such Person and its properties,
including, without limiting the foregoing, all orders and decrees of all
courts and arbitrators in proceedings or actions to which the Person in
question is a party, and (b) in respect of contracts relating to interest or
finance charges that are made or performed in the State of Texas, "Applicable
Law" shall mean the laws of the United States of America, including without
limitation 12 USC 85 and 86, as amended from time to time, and any other
statute of the United States of America now or at any time hereafter
prescribing the maximum rates of interest on loans and extensions of credit,
and the laws of the State of Texas, including, without limitation, Article
5069-1.04, Title 79, Revised Civil Statutes of Texas, 1925, as amended ("Art.
1.04"), and any other statute of the State of Texas now or at any time
hereafter prescribing maximum rates of interest on loans and extensions of
credit; provided that the parties hereto agree that the provisions of Chapter
15, Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall not
apply to Revolving Credit Loans, this Agreement, or any other Loan Documents.
"ASSET SALE" means the sale, lease, assignment, exchange, disposition or
other transfer for value by Holding, Company or any Subsidiary (including,
without limitation, any sale/leaseback) to any Person other than Holding,
Company or any Subsidiary thereof of (i) any of the stock of any of Holding's
Subsidiaries, (ii) all or substantially all of the assets of any division or
line of business of Holding, Company or any Subsidiary, or (iii) any other
assets or rights, or related group of assets or rights, of Holding, Company
or any Subsidiary.
"ASSET TRANSFER" means (i) the transfer of property or assets of Company
or any of its Subsidiaries from one state, jurisdiction or country to another
state, jurisdiction or country or (ii) the
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sale, lease, assignment, exchange, disposition or other transfer for value or
otherwise (including by way of dividend or distribution on its capital stock)
by Holding, Company or any Subsidiary (including, without limitation, any
sale/leaseback) to Holding, Company or any Subsidiary of (a) all or
substantially all of the assets of any division or line of business of
Holding, Company or any Subsidiary or (b) any other assets or rights, or
related group of assets or rights, of Holding, Company or any Subsidiary.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy" from time to time in effect, or any successor statute.
"BASE RATE" means the sum of, from the date hereof through and including
June 30, 1998, one percent (1%) per annum, and thereafter two percent (2%)
per annum, PLUS the greater of: (i) the rate that NationsBank announces from
time to time as its prime lending rate (which rate may not necessarily be the
lowest or best rate actually charged to any customer), as in effect from time
to time, or (ii) the rate publicly announced from time to time as the Federal
Funds Rate, as in effect from time to time, PLUS .50% per annum.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which either is a legal holiday under the laws of either the State of Texas
or the State of New York or is a day on which banking institutions located in
either state are authorized or required by law or other governmental action
to close.
"CAPITAL LEASE," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"CASH EQUIVALENTS" means (i) marketable securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (ii) demand
deposits, certificates of deposit, eurodollar time deposits, overnight bank
deposits and bankers acceptances, each with maturities of one year or less
from the date of the acquisition thereof, of any Lender identified on
SCHEDULE 1.1 or any other commercial bank having capital and surplus in
excess of $500,000,000 ("QUALIFYING BANKS"), (iii) commercial paper of the
Qualifying Banks or any of their Affiliates or of a domestic issuer rated at
least A-1 by Standard & Poor's Ratings Group, a Division of Xx-Xxxx Hill,
Inc., a New York corporation, or any successor thereto ("S&P"), or at least
P-1 by Xxxxx'x Investors Service, Inc., or any successor thereto ("MOODY'S");
PROVIDED, that if such commercial paper is rated by both S&P and Moody's,
such ratings shall be at least A-1 and P-1, respectively and (iv) with
respect to investments by a Eurocurrency Borrower, (a) securities issued or
fully guaranteed or insured by the government of the United Kingdom,
Switzerland, Scotland or Germany or any agency thereof or any of those
exempted persons referred to in paragraphs 2, 5, 6, 8, 12 and 13 of Schedule
2 to the Banking Xxx 0000, (b) certificates of deposit, sterling time
deposits, overnight bank deposits and bankers acceptances, each with
maturities of one year or less from the date of the acquisition thereof, of
any Lender identified on SCHEDULE 1.1 or any Qualifying Bank (but using the
equivalent of $500,000,000 in the case of a bank whose capital is not
denominated in Dollars), (c) commercial paper of the Qualifying Banks or any
of their Affiliates or of a United Kingdom, Switzerland, Scotland or Germany
issuer rated at least A-1 by S&P or at least P-1 by Moody's, subject to the
proviso referred to in (iii) above or a comparable rating of a foreign rating
agency and (d) investments of the type described in clauses (i) through (iii)
above.
"CERTIFICATE OF EXEMPTION" has the meaning assigned to that term in
subsection 2.8.
"CLOSING DATE" means the date on or before July 31, 1997 on which the
initial Revolving Credit Loans are made and the conditions to initial
Revolving Credit Loans are satisfied.
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"COLLATERAL" means all property made subject to a Lien pursuant to the
Collateral Documents and/or the Eurocurrency Security Documents.
"COLLATERAL AGENT" means NationsBank, in its capacity as collateral
agent under subsection 9.6 and the Collateral Documents, or any successor
thereto appointed in accordance with Section 9.6 hereof.
"COLLATERAL DOCUMENTS" means the Company Security Documents, the Holding
Security Documents, the Subsidiary Security Documents, the Acknowledgement
and all other instruments or documents heretofore, now or hereafter granting
Liens on property of Holding, Company or any Subsidiary to Collateral Agent,
for the benefit of Agent and Lenders and for the benefit of the Eurocurrency
Administrative Agent and the Eurocurrency Lenders.
"COMMITMENT FEE PERCENTAGE" means 0.750% per annum.
"COMMITMENT FEES" has the meaning assigned to that term in subsection
2.3E.
"COMPANY" has the meaning assigned to that term in the introductory
paragraph to this Agreement.
"COMPANY PATENT SECURITY AGREEMENT" means the Patent Security Agreement
executed and delivered by Company as of February 24, 1995, substantially in
the form annexed to the Original Credit Agreement as EXHIBIT XI thereto, as
amended as of October 15, 1996, as such agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"COMPANY PLEDGE AGREEMENT" means, collectively, the Pledge Agreement
executed and delivered by Company as of February 24, 1995, substantially in
the form annexed to the Original Credit Agreement as EXHIBIT IXB thereto, as
such agreement may be amended, amended and restated, supplemented or
otherwise modified from time to time, and such other pledge agreements
executed and delivered by Company as of February 24, 1995 with respect to the
capital stock of any Foreign Subsidiary, as such agreements may be amended,
amended and restated, supplemented or otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Company as of February 24, 1995, substantially in the form
annexed to the Original Credit Agreement as EXHIBIT VII thereto, as amended
as of October 15, 1996, as such agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"COMPANY SECURITY DOCUMENTS" means all of the Company Security
Agreement, the Company Pledge Agreement, the Company Trademark Pledge and the
Company Patent Security Agreement.
"COMPANY TRADEMARK PLEDGE" means the Trademark Security Agreement
executed and delivered by Company as of February 24, 1995, substantially in
the form annexed to the Original Credit Agreement as EXHIBIT VIII thereto, as
amended as of October 15, 1996, as such agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
annexed hereto as EXHIBIT VI delivered to Lenders by Holding and Company
pursuant to subsection 5.1(v).
"CONSOLIDATED EBITDAR" means, for any period, the sum (without
duplication) of
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(i) Consolidated Net Income, (ii) provisions for taxes based on income, (iii)
Consolidated Interest Expense, (iv) to the extent Consolidated Net Income has
been reduced thereby, amortization expense, depreciation expense and other
non-cash expenses, (v) losses on Asset Sales, (vi) extraordinary losses,
(vii) Restructuring Charges incurred, including without limitation
nonrecurring charges included in the cost of goods sold and selling, general
and administrative, with respect to European operations, and (viii) other
non-cash items reducing Consolidated Net Income (excluding write-offs of
Inventory and accounts receivable) LESS the sum (without duplication) of (w)
gains on Asset Sales (net of the tax impact thereof), (x) Consolidated
Interest Income, (y) extraordinary gains (net of the tax impact thereof), and
(z) other non-cash items increasing Consolidated Net Income, all as
determined on a consolidated basis for Holding and its Subsidiaries in
conformity with GAAP.
"CONSOLIDATED FUNDED DEBT" means, as of any date of determination, the
sum, without duplication, of the total debt owed to the Lenders and the
Eurocurrency Lenders under the Loan Documents.
"CONSOLIDATED GAAP CAPITAL EXPENDITURES" means, for any period, the sum
of all expenditures (whether paid in cash or accrued as liabilities) by
Holding, Company and its Subsidiaries during that period that are for items
that would be classified as "property, plant and equipment" or comparable
items on the consolidated balance sheet of Holding and its Subsidiaries in
conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (excluding amortization of loan restructuring fees and expenses),
whether paid or accrued as liabilities, with respect to Consolidated Funded
Debt determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST INCOME" means, for any period, total interest
income earned by Holding and its Subsidiaries on cash or Cash Equivalents for
such period.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Holding and its Subsidiaries, after provisions for taxes and
extraordinary items, on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP; PROVIDED that
there shall be excluded therefrom, the income (or loss) of any Person that
becomes a Subsidiary of Holding or is merged into or consolidated with
Holding or any of its Subsidiaries the assets of which are acquired by
Holding or any of its Subsidiaries, to the extent such income (or loss)
accrued prior to the date of such merger, consolidation or acquisition.
"CONSOLIDATED NET CURRENT ASSETS" means, as of any date of
determination, the sum of (i) all accounts receivable of Holding and its
Subsidiaries on a consolidated basis which are not more than 90 days past
due, PLUS (ii) all inventory of Holding and its Subsidiaries on a
consolidated basis net of all reserves therefor.
"CONSOLIDATED TANGIBLE NET WORTH" means, as at any date of
determination, the excess of Consolidated Total Assets over Consolidated
Total Liabilities, PLUS or MINUS any foreign currency translation
adjustments, of Holding and its Subsidiaries on a consolidated basis in
conformity with GAAP, MINUS goodwill, patents, trademarks, trade names,
copyrights, franchises, and all similar assets that would be classified as
intangible assets.
"CONSOLIDATED TOTAL ASSETS" means, as of any date of determination, all
property, whether real, personal, tangible, intangible or otherwise, which in
accordance with GAAP would be included in determining total assets as shown
on the assets portion of a consolidated balance sheet of Holding and its
Subsidiaries.
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"CONSOLIDATED TOTAL LIABILITIES" means, as of any date of determination,
the total liabilities which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a
consolidated balance sheet of Holding and its Subsidiaries.
"CONTINGENT OBLIGATION," as applied to any Person, means, without
duplication, any direct or indirect liability, contingent or otherwise, of
that Person (i) with respect to any indebtedness, lease, dividend or other
obligation of another if the primary purpose or intent thereof by the Person
incurring the Contingent Obligation is to provide assurance to the obligee of
such obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected (in whole or in part)
against loss in respect thereof or (ii) with respect to any letter of credit
issued for the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings. Contingent Obligations shall include,
without limitation, (a) the direct or indirect guaranty, endorsement (other
than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of
the obligation of another, (b) any interest rate or currency agreement and
(c) any liability of such Person for the obligations of another through any
agreement (contingent or otherwise) (x) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), (y) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another, or (z) to make take-or-pay or similar payments if
required regardless of non-performance by any other party or parties to an
agreement, if in the case of any agreement described under subclauses (x) or
(y) of this sentence the primary purpose or intent thereof is as described in
the preceding sentence. The amount of any Contingent Obligation shall be
equal to the amount of the obligation to the extent so guaranteed or
otherwise supported.
"CONTRACTUAL OBLIGATION," as applied to any Person, means any provision
of any material security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument
to which that Person is a party or by which it or any material amount of its
properties is bound or to which it or any material amount of its properties
is subject.
"CURRENT RATIO" means, as of any date of determination, the ratio of (i)
all amounts which, in conformity with GAAP, would be included as current
assets on a consolidated balance sheet of Holding and its Subsidiaries, to
(ii) all amounts which, in conformity with GAAP, would be included as current
liabilities on a consolidated balance sheet of Holding and its Subsidiaries
on a consolidated basis (excluding Indebtedness to Lenders).
"DISCONTINUED OPERATIONS" means the discontinued operations consisting
of Interfas Holding S.A., a corporation organized under the laws of France
and a Subsidiary of Holding, Interfas S.A., a corporation organized under the
laws of France and a Subsidiary of Holding, Nu-kote Canada, Inc., a
corporation organized under the laws of Canada and a Subsidiary of Holding,
Nu-kote Canada Holding, Inc., a corporation organized under the laws of
Canada and a Subsidiary of Holding, N-K Interface Limited, a corporation
organized under the laws of England and a Subsidiary of Holding, Nu-kote
Quality Imaging GmbH, a corporation organized under the laws of Germany and a
Subsidiary of Holding, Nu-Kote Italia s.r.l., a corporation organized under
the laws of Italy and a Subsidiary of Holding, Nu-kote de Colombia S.A., a
corporation organized under the laws of Colombia and a Subsidiary of Company,
Mercantiles S.A., a corporation organized under the laws of Colombia and a
Subsidiary of Nu-Kote de Colombia S.A., and Compania Manufactura Onix S.A., a
corporation organized under the laws of Colombia and a Subsidiary of Nu-kote
de Colombia S.A.
"DOCUMENTARY LETTERS OF CREDIT" means a commercial documentary Letter of
Credit under
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which Issuing Lender agrees to make payments for the account of Company, on
behalf of the Company or any Domestic Subsidiary, in respect of the
obligation of Company or any Domestic Subsidiary in connection with the
purchase of goods or services in the ordinary course of business.
"DOCUMENTATION AGENT" has the meaning assigned to that term in the
introductory paragraph to this Agreement.
"DOLLAR EQUIVALENT" shall mean, with respect to an amount of any foreign
currency on any date, the amount of Dollars that may be purchased with such
amount of such foreign currency at the spot exchange rate with respect to
such foreign currency on such date.
"DOLLARS" and the sign "$" means the lawful money of the United States
of America.
"DOMESTIC LOAN DOCUMENTS" means this Agreement (including the Holding
Guaranty set forth herein), the Notes, the Letters of Credit, any Interest
Hedge Agreements entered into with any Lender, the Warrant Agreement, the
Registration Rights Agreement and the Collateral Documents.
"DOMESTIC SUBSIDIARY" means a Subsidiary of Holding organized under the
laws of any state within the United States of America or the District of
Columbia.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the laws
of the United States of America, or any State thereof, and having a combined
capital and surplus in excess of $50,000,000, (b) a commercial bank organized
under the laws of any other country which is a member of OECD, or a political
subdivision of any such country, and having a combined capital and surplus in
excess of $50,000,000; PROVIDED THAT such bank is acting through a branch or
agency located in (x) the United States or the country in which it is
organized or another country which is also a member of the OECD or (y) the
Cayman Islands, (c) the central bank of any country which is a member of the
OECD, (d) a commercial finance company or finance subsidiary of a corporation
organized under the laws of the United States of America, or any State
thereof, and having a combined capital and surplus in excess of $50,000,000,
(e) an insurance company organized under the laws of the United States of
America (or any State thereof) and having a combined capital and surplus in
excess of $50,000,000, (f) a savings bank or savings and loan association
organized under the laws of the United States of America, or any State
thereof, and having a combined capital and surplus in excess of $50,000,000,
(g) a pension fund, mutual fund, or other institutional lender or investor,
or (h) any Lender party to this Agreement on the Closing Date or any
Affiliate of any thereof.
"EMPLOYEE BENEFIT PLAN" means any Pension Plan, any employee welfare
benefit plan or any other employee benefit plan which is described in Section
3(3) of ERISA and which is maintained, or contributed to, by Company or any
ERISA Affiliate of Company for employees of Company and any ERISA Affiliate
of Company.
"ENVIRONMENTAL CLAIM" means any written accusation, allegation, notice
of violation, claim, demand, abatement, compliance or other order or
direction (conditional or otherwise) by any governmental authority or any
Person for personal injury (including sickness, disease or death), tangible
or intangible property damage, damage to the environment, nuisance,
pollution, contamination or other adverse effects on the environment, or for
fines, penalties or restrictions, resulting from or based upon (i) the
existence, or the continuation of the existence, of a Release (whether sudden
or non-sudden or accidental or non-accidental), of, or exposure to, any
Hazardous Material, in, into or onto the environment at, in, by, from or
related to any Facility, (ii) the transportation, storage, treatment or
disposal of Hazardous Materials in connection with the operation of any
Facility, or (iii) the violation, or alleged violation, of any statutes,
ordinances, orders, rules, regulations, permits or licenses of or
-7-
from any governmental authority, agency or court relating to Hazardous Materials
with respect to the Facilities.
"ENVIRONMENTAL LAWS" means all domestic and foreign laws relating to
fines, orders, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release or threatened
Release of Hazardous Materials and to the generation, storage,
transportation, or disposal of Hazardous Materials, in any manner applicable
to Holding or any of its Subsidiaries or any of their respective Facilities,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 ET SEQ.), the
Hazardous Material Transportation Act (49 U.S.C. Section 1801 ET SEQ.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 ET SEQ.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 ET SEQ.), the
Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 ET SEQ.), the Occupational Safety and Health Act
(29 U.S.C. Section 651 ET SEQ.) and the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. Section 11001 ET SEQ.), each as amended or
supplemented, and any analogous future or present local, state and federal
statutes and regulations promulgated pursuant thereto, each as in effect as
of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means any trade or business
(whether or not incorporated) that is a member of a group of which that
Person is a member and that is under common control with that Person within
the meaning of the regulations promulgated under Sections 414(b) and (c) of
the Internal Revenue Code.
"EUROCURRENCY ADMINISTRATIVE AGENT" means Barclays Bank PLC in its
capacity as agent under the Eurocurrency Credit Agreements; PROVIDED that
"Eurocurrency Administrative Agent" shall also include any successor of
Eurocurrency Administrative Agent pursuant to the Eurocurrency Credit
Agreements.
"EUROCURRENCY BORROWER" means each of Produktions, Pelikan Scotland,
Pelikan Hardcopy, and any other Foreign Subsidiary that is a borrower under
any Eurocurrency Credit Agreement.
"EUROCURRENCY COLLATERAL AGENT" means NationsBank of Texas, N.A. in its
capacity as collateral agent under the Eurocurrency Credit Agreements, and
any successor thereto.
"EUROCURRENCY CREDIT AGREEMENTS" means, collectively, the Swiss Facility
Agreement and the U.K. Facility Agreement, as each may have been or may be
amended, amended and restated, supplemented or otherwise modified from time
to time.
"EUROCURRENCY DOCUMENTATION AGENT" means NationsBank of Texas, N.A., in
its capacity as documentation agent under the Eurocurrency Credit Agreements,
and any successor thereto.
"EUROCURRENCY GUARANTIES" means the "Nu-kote Guarantees" as defined in
the Eurocurrency Credit Agreements.
"EUROCURRENCY GUARANTY OBLIGATIONS" means all obligations of Holding,
Company and the Subsidiaries under the Eurocurrency Guaranties.
"EUROCURRENCY LENDER" means any lender under any Eurocurrency Credit
Agreement.
-8-
"EUROCURRENCY LOAN" means one or more of the Advances (as defined below)
made under any Eurocurrency Credit Agreement. For purposes of this definition,
the term "Advance" shall have the meaning ascribed thereto in each such
Eurocurrency Credit Agreement.
"EUROCURRENCY LOAN DOCUMENTS" means the Eurocurrency Credit Agreements, the
Eurocurrency Security Documents, any Interest Hedge Agreements entered into with
any Eurocurrency Lender, and the Eurocurrency Guaranties.
"EUROCURRENCY SECURITY DOCUMENTS" means the "Security Documents" as defined
in the Eurocurrency Credit Agreements.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"EXCLUDED TAXES" means all taxes imposed on or by reference to the
receipts, income or profit of any Lender or its applicable lending offices and
all franchise taxes, taxes on doing business or taxes measured by capital or net
worth imposed on any Lender or its applicable lending office, in each case,
imposed:
(i) by the jurisdiction in which the applicable lending office or
other branch of such Lender is located or in which such Lender is organized
or has its principal or registered office;
(ii) by reason of any connection between the jurisdiction imposing
such tax and such Lender other than a connection arising solely from this
Agreement or any transaction contemplated hereby;
(iii) by the United States of America or any political subdivision
thereof or therein including without limitation, branch profits taxes
imposed by the United States or similar taxes imposed by any subdivision
thereof; or
(iv) by reason of the failure of any Lender to provide accurate
documentation required to be provided by such Lender pursuant to
subsection 2.8 hereof.
"EXECUTIVE OFFICER" of any Person means the Chairman of the Board,
President, Chief Operating Officer, Chief Financial Officer, any Executive Vice
President, Senior Vice President-Finance, Corporate Controller, Treasurer or
General Counsel of such Person.
"EXISTING LETTERS OF CREDIT" means any Letter of Credit existing on the
Closing Date which was an outstanding Letter of Credit under the First
Restatement.
"EXISTING SELLER NOTES" means (i) the 10% Subordinated Promissory Note due
February 24, 1997 in the original principal amount of $665,000, dated
February 24, 1992, issued by Company in favor of Xxxxxx X. Xxxxx and (ii) the
10% Subordinated Promissory Note due February 24, 1997 in the original principal
amount of $285,000, dated February 24, 1992, issued by Company in favor of
Xxxx X. Xxxxxxxx.
"FACILITIES" means any and all real property (including all buildings,
fixtures or other improvements located thereon) owned, leased or operated by
Holding, Company or any Subsidiary.
-9-
"FEDERAL FUNDS RATE" shall mean, for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of Dallas, or, if such rate
is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it.
"FIRST RESTATEMENT" has the meaning assigned to that term in the Recitals
to this Agreement.
"FISCAL YEAR" means the fiscal year of Holding and its Subsidiaries.
"FOREIGN LENDER" shall have the meaning assigned that term in
subsection 2.8.
"FOREIGN SUBSIDIARY" means a Subsidiary of Holding that is not organized
under the laws of any state within the United States of America or the District
of Columbia.
"FUNDING DATE" means the date of the funding of a Revolving Credit Loan.
"FUTURE GRAPHICS" means Future Graphics, Inc., a California corporation and
a wholly-owned Subsidiary of Company.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncement of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, that are applicable to the circumstances as of the date of
determination. For purposes of certain calculations, GAAP shall be modified by
the requirements set forth in subsection 1.2.
"GERMAN ASSET TRANSFER" means any Asset Transfer involving fixtures,
machinery and equipment in which such assets are located in Germany immediately
before the Asset Transfer and are located in Switzerland or in the United
Kingdom immediately after the Asset Transfer.
"GOVERNMENT ACTS" has the meaning assigned thereto in subsection 2.7H.
"GREIF" means Xxxxx-Werke GmbH, a German limited liability company and
wholly-owned Subsidiary of Company.
"HARDCOPY DEUTSCHLAND" means Pelikan Hardcopy Deutschland GmbH, a German
limited liability company and wholly-owned Subsidiary of Greif.
"HAZARDOUS MATERIALS" means (i) any oil, petroleum or petroleum derived
substance, any drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, any flammable
substances or explosives, any radioactive materials, any hazardous wastes or
substances, any toxic wastes or substances or any other pollutants, which cause
any Facility to be in violation of any Environmental Laws; (ii) asbestos in any
form which is or could become friable, urea formaldehyde foam insulation, or any
oil or dielectric fluid containing levels of polychlorinated biphenyls in excess
of fifty parts per million; and (iii) any chemical, material or substance
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous waste", "restricted
hazardous waste", or "toxic substances" or words of similar import under any
applicable local, state or federal law or under the
-10-
regulations adopted or publications promulgated pursuant thereto, including,
without limitation, the statutes referenced in the definition of "Environmental
Laws."
"HIGHEST LAWFUL RATE" means at the particular time in question the maximum
rate of interest which, under Applicable Law, the Lenders are then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, Lenders are permitted to charge on the Obligations shall change
after the date hereof, the Highest Lawful Rate shall be automatically increased
or decreased, as the case may be, from time to time as of the effective time of
each change in the Highest Lawful Rate without notice to Company. For purposes
of determining the Highest Lawful Rate under the Applicable Law of the State of
Texas, the applicable rate ceiling shall be (a) the indicated rate ceiling
described in and computed in accordance with the provisions of Section (a)(1) of
Art. 1.04, or (b) if the parties subsequently contract as allowed by Applicable
Law, the quarterly ceiling or the annualized ceiling computed pursuant to
Section (d) of Art. 1.04; provided, however, that at any time the indicated rate
ceiling, the quarterly ceiling or the annualized ceiling shall be less than 18%
per annum or more than 24% per annum, the provisions of Sections (b)(1) and (2)
of said Art. 1.04 shall control for purposes of such determination, as
applicable.
"HOLDING" has the meaning assigned to that term in the introductory
paragraph to this Agreement.
"HOLDING COMMON STOCK" means the common stock and non-voting common stock
of Holding, par value $.01 per share.
"HOLDING GUARANTY" means the guaranty of Holding set forth in Section 7.
"HOLDING PATENT SECURITY AGREEMENT" means the Patent Security Agreement
executed and delivered by Holding as of February 24, 1995, substantially in the
form annexed to the Original Credit Agreement as EXHIBIT XI thereto, as amended
as of October 15, 1996, as such agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"HOLDING PLEDGE AGREEMENT" means the Pledge Agreement executed and
delivered by Holding as of February 24, 1995, substantially in the form annexed
to the Original Credit Agreement as EXHIBIT IXA thereto, as such agreement may
be amended, amended and restated, supplemented or otherwise modified from time
to time.
"HOLDING SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Holding as of February 24, 1995, substantially in the form annexed
to the Original Credit Agreement as EXHIBIT XVII thereto, as amended as of
October 15, 1996, as such agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"HOLDING SECURITY DOCUMENTS" means all of the Holding Guaranty, the Holding
Patent Security Agreement, the Holding Pledge Agreement, the Holding Security
Agreement and the Holding Trademark Pledge.
"HOLDING TRADEMARK PLEDGE" means the Trademark Security Agreement executed
and delivered by Holding as of February 24, 1995, substantially in the form
annexed to the Original Credit Agreement as EXHIBIT VIII thereto, as amended as
of October 15, 1996, as such agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"ICMI" means International Communication Materials, Inc., a Pennsylvania
corporation and a wholly-owned Subsidiary of Company.
-11-
"INDEBTEDNESS", as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money whether or not evidenced by a promissory
note, draft or similar instrument, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit, (iv) any obligation owed for all or any part of the
deferred purchase price of property or services, which purchase price is due
more than six months from the date of incurrence of the obligation in respect
thereof, and (v) all indebtedness to the extent secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person.
"INTEREST COVERAGE RATIO" means, for any period, the ratio of Consolidated
EBITDAR to Consolidated Interest Expense.
"INTEREST HEDGE AGREEMENTS" means any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including, but not
limited to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap, swap or
collar protection agreements, and forward rate currency or interest rate
options, as the same may be amended or modified and in effect from time to time,
and any and all cancellations, buy backs, reversals, terminations or assignments
of any of the foregoing.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter.
"INVENTORY" means, on a consolidated basis, all goods, merchandise and
other personal property which are held for sale or lease by Holding and its
Subsidiaries, including those held for display or demonstration or out on lease
or consignment or to be furnished under a contract of service, or those which
are raw materials, components, work in process or materials used or consumed, or
to be used or consumed, in the business of Holding or any of its Subsidiaries.
"INVESTMENT," as applied to any Person, means any direct or indirect
purchase or other acquisition by that Person of, or of a beneficial interest in,
capital stock or other Securities of any other Person, or any direct or indirect
loan (including intercompany loans), advance (other than loans or advances to
employees for moving, travel and entertainment expenses, drawing accounts and
similar expenditures made in the ordinary course of business) or capital
contribution by that Person to any other Person, including all indebtedness and
accounts receivable from that other Person other than indebtedness and accounts
receivable that are current assets or arose from sales of goods or services to
that other Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto and minus the amount of any portion of such Investment repaid
to such Person in cash (including as a return of capital), but without any other
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"ISSUING LENDER" means, with respect to any Letter of Credit, the Lender
that issues or causes its Affiliate to issue such Letter of Credit, determined
as provided in subsection 2.7; PROVIDED, however, that Company shall first
request that NationsBank issue each Letter of Credit.
"LATIN AMERICAN SUBSIDIARIES" means Nu-kote Internacional de Mexico, S.A.
de C.V., a corporation organized under the laws of Mexico and a Subsidiary of
Company, and Nu-kote Latin
-12-
America.
"LENDER" and "LENDERS" have the meanings assigned to such terms in the
introduction to this Agreement; PROVIDED that "Lender" and "Lenders" shall also
include the successors and permitted assignees of Lenders pursuant to
subsection 10.2.
"LETTER OF CREDIT" means any of the letters of credit issued, deemed to be
issued, or to be issued by Issuing Lender for the account of Company, on behalf
of Company or any Subsidiary, pursuant to subsection 2.7 and for the purposes
described in subsection 2.5B (and shall include the Existing Letters of Credit);
PROVIDED that, notwithstanding anything to the contrary contained herein, any
such Letter of Credit may be issued by an Affiliate of a Lender; PROVIDED,
FURTHER, that to the extent that a Letter of Credit is issued by an Affiliate of
a Lender, such Lender shall, for all purposes under this Agreement, the Loan
Documents and all other instruments and documents referred to herein and therein
be deemed to be the "Issuing Lender" with respect to such Letter of Credit.
Letters of Credit shall include Documentary Letters of Credit and Standby
Letters of Credit.
"LETTER OF CREDIT USAGE" means, with respect to any Letter of Credit, as at
any date of determination, the sum of (i) the maximum aggregate amount which is
or at any time thereafter may become available for drawings under such Letter of
Credit then outstanding PLUS (ii) the aggregate amount of all drawings under
such Letter of Credit honored by Issuing Lender and not theretofore reimbursed
by Company.
"LETTER OF DOMESTIC ORGANIZATION" has the meaning assigned to that term in
subsection 2.8.
"LETTER OF NON-EXEMPTION" has the meaning assigned to that term in
subsection 2.8.
"LIEN" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).
"LOAN DOCUMENTS" means the Domestic Loan Documents and the Eurocurrency
Loan Documents.
"MARGIN STOCK" has the meaning assigned to that term in Regulations G and U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"MAXIMUM AMOUNT" means the maximum amount of interest which, under
Applicable Law, Lenders are permitted to charge on the Obligations.
"MIT" means Modular Ink Technology i Stockholm AB, a Swedish corporation
and a wholly-owned Subsidiary of Holding.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is maintained for employees of Company or any
ERISA Affiliate of Company or to which Company or any ERISA Affiliate of Company
has, at any time within the preceding five years, made, or been obligated to
make, contributions.
"N-K INTERNATIONAL LIMITED" means N-K International Limited, a corporation
organized under the laws of England.
"NATIONSBANK" means NationsBank of Texas, N.A., a national banking
association.
-13-
"NET CASH PROCEEDS" means, with respect to any Asset Sale by any Person,
the cash and readily marketable cash equivalents received by such Person in
connection with such transaction (including cash proceeds of any property
received in consideration of any such Asset Sale) after deducting therefrom
reasonable costs and expenses (including without limitation brokerage
commissions, legal fees, accounting fees, investment banking and underwriting
fees and other similar commissions and fees) and, without duplication, (i) taxes
paid or payable by such Person as a result of such Asset Sale, (ii) liabilities
of such Person secured by any assets subject to such Asset Sale other than Liens
to secure the Obligations or the Eurocurrency Loans, and (iii) amounts to be
provided by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such Asset Sale and
retained by Holding or any Subsidiary after such Asset Sale (to the extent such
reserves are not subsequently reversed); PROVIDED, HOWEVER, that in the event
that any consideration for an Asset Sale is required to be held in escrow
pending determination of whether a purchase price adjustment will be made, such
consideration (or any portion thereof) shall become Net Cash Proceeds only at
such time as it is released to Holding or its Subsidiaries from escrow.
"NON-COMPETITION AGREEMENTS" mean the Non-Competition Agreement, dated
February 26, 1993, between Xxxxxx Xxxxxxxxx and Future Graphics.
"NOTICE OF BORROWING" means a notice substantially in the form annexed
hereto as EXHIBIT I with respect to a proposed borrowing of Revolving Credit
Loans.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice substantially in
the form annexed hereto as EXHIBIT II with respect to a proposed issuance of a
Letter of Credit.
"NU-KOTE IMPERIAL" means Nu-kote Imperial, Ltd., a Delaware corporation and
wholly-owned Subsidiary of Holding.
"NU-KOTE IMAGING" means Nu-kote Imaging International, Inc., a Delaware
corporation and wholly-owned Subsidiary of Company.
"NU-KOTE LATIN AMERICA" means Nu-kote Latin America, Inc., a Delaware
corporation and a wholly-owed Subsidiary of Company.
"OBLIGATIONS" means all obligations and liabilities of every nature of
Holding, and/or Company, and the Subsidiaries from time to time owed to
(i) Agent or Lenders or any of them under this Agreement, or any of the other
Domestic Loan Documents or reimbursement obligations with respect to the Letters
of Credit, including, without limitation, all liability of the Company for
principal and interest on the Revolving Credit Loans or reimbursement
obligations owed to Agent or Lenders with respect to the Letters of Credit and
all interest thereon or for fees or expenses, reimbursements and
indemnifications and other amounts due or to become due hereunder or thereunder,
or (ii) to any Lender arising out of any losses incurred in the cash management
services provided to Holding or any of its Subsidiaries resulting from such
Lender having given credit for deposits or other credits to Holdings' or its
Subsidiaries' accounts which deposit(s) or credit(s) is/are later reversed due
to the failure of final collection, provided that such liabilities shall not
constitute Obligations hereunder to the extent that they exceed $3,000,000.
"OECD" means the Organization for Economic Cooperation and Development.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a certificate
executed on behalf of such corporation by its Chief Executive Officer, its
President, its Chief Financial Officer, its Corporate
-14-
Controller or its Treasurer; PROVIDED, that every Officers' Certificate with
respect to the compliance with a condition precedent to the making of any
Revolving Credit Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read
such condition and any definitions or other provisions contained in this
Agreement and the other Loan Documents relating thereto, (ii) a statement
that, in the opinion of the signers, they have made or have caused to be made
such examination or investigation as is necessary to enable them to express
an informed opinion as to whether or not such condition has been complied
with, and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease (including,
without limitation, leases that may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"ORIGINAL CREDIT AGREEMENT" has the meaning assigned to that term in the
Recitals to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
thereto).
"PELIKAN HARDCOPY" means Pelikan Hardcopy (International) AG, a Swiss stock
company and wholly-owned (other than directors' qualifying shares) Subsidiary of
Produktions.
"PELIKAN SCOTLAND" means Pelikan Scotland Ltd., a limited liability company
organized under the laws of England and Wales and a wholly-owned Subsidiary of
Company.
"PENSION PLAN" means any employee pension benefit plan described in
Section 3(2) of ERISA which is subject to Section 412 of the Internal Revenue
Code and which is maintained by Company or any ERISA Affiliate of Company for
employees of Company or any ERISA Affiliate of Company, other than a
Multiemployer Plan.
"PERMITTED ENCUMBRANCES" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not at the time required by subsection 5.3A;
(ii) Statutory Liens of landlords, Liens of carriers, warehousemen,
mechanics, materialmen, repairmen and suppliers, and other Liens incurred
in the ordinary course of business for sums not yet delinquent for a period
of more than 60 days, or being contested in good faith if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall
have been made therefor;
(iii) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the performance
of tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds, trade
contracts (other than for borrowed money), self-retention, reimbursement or
indemnity agreements as to insurance policies and other similar obligations
incurred in the ordinary course of business (exclusive of obligations for
the payment of borrowed money);
(iv) Any attachment, judgment or similar Lien unless the writ,
judgment or other process it secures shall, within 60 days after the entry
thereof, not have been discharged or execution thereof stayed pending
appeal, or shall not have been discharged within 60 days after
-15-
the expiration of any such stay, and shall not be a matter that is
adequately covered by insurance and with respect to which the insurer has
acknowledged coverage in writing and any lis pendens provided the
litigation related thereto is being contested in good faith;
(v) Easements, rights-of-way, restrictions, covenants, conditions,
licenses, zoning requirements, minor defects or irregularities in title and
other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of Holding and its
Subsidiaries or materially adversely affecting the value of the relevant
property;
(vi) Any interest or title of a lessor or lessee under any lease
permitted by this Agreement (including any Lien granted by such lessor or
lessee);
(vii) unperfected purchase-money Liens on Inventory incurred in
the ordinary course of business and Liens on goods for sale on consignment
or a similar basis;
(viii) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods and Liens to secure an existing letter of credit in
the amount of 30,000 Deutschmarks which was issued in support of German
customs authorities;
(ix) Liens on Inventory of Foreign Subsidiaries arising out of
retention of title arrangements for the supply of Inventory in the ordinary
course; and
(x) Licenses, shop rights and covenants not to xxx and options
therefor entered into in the ordinary course with respect to patents,
trademarks and other intellectual property (including all registrations
thereof and applications to register therefor).
"PERSON" means and includes natural persons, corporations, limited
liability companies, limited liability partnerships, limited partnerships,
general partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, vehicle trusts, business
trusts, or other organizations, whether or not legal entities, agencies,
governments and political subdivisions thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after notice
or lapse of time or both, would constitute an Event of Default if that condition
or event were not cured or removed within any applicable grace or cure period.
"PRO RATA SHARE" means in relation to any Lender as of any date of
determination, as applicable, the percentage obtained by dividing the aggregate
amount of such Lender's Revolving Credit Commitment by the aggregate amount of
the Revolving Credit Commitments of all Lenders.
"PRODUKTIONS" means Pelikan Produktions AG, a Swiss stock company and
wholly-owned Subsidiary of Company (other than directors' qualifying shares).
"PROPOSED CLOSED FACILITIES" means those Facilities and related assets
owned by Company and/or its Subsidiaries on February 24, 1995 and which were
proposed to be closed after February 24, 1995 as described in writing
specifically addressed to Lenders prior to February 24, 1995 and items listed on
Schedule 6.7B hereto.
"QUALIFYING BANKS" has the meaning assigned to that term in the definition
of Cash Equivalents set forth above in this subsection 1.1.
-16-
"RECALCULATION DATE" has the meaning assigned to that term in
subsection 5.11A.
"REGISTER" has the meaning assigned to that term in subsection 2.1D.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
executed and delivered by Holding as of July 31, 1997, as such agreement may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, or migration of any Hazardous
Material in, by, from or related to any Facility into the indoor or outdoor
environment, including through the air, soil, surface water or groundwater.
"REQUISITE LENDERS" means, at any time, Lenders and Eurocurrency Lenders
having 66-2/3% or more of the combined aggregate amount at such time of (i) the
aggregate amount of the Revolving Credit Commitments or, in case the Revolving
Credit Commitments have been terminated, the outstanding principal amount of the
Revolving Credit Loans, if any, made thereunder and (ii) the aggregate of the
sum of the Commitments (as defined in the relevant Eurocurrency Credit
Agreement). For purposes of determining the Requisite Lenders, any amounts
denominated in (a) Pounds Sterling shall be translated into Dollars utilizing
the same exchange rate pursuant to which the aggregate amount as of the Closing
Date of the Commitments in such currency under the U.K. Credit Agreement was
determined and (b) Swiss Francs shall be translated into Dollars utilizing the
same exchange rate pursuant to which the aggregate amount as of the Closing Date
of the Commitments in such currency under the Swiss Credit Agreement was
determined.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Holding
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of stock of Holding now or hereafter
outstanding, (iii) any payment or prepayment of principal of, premium, if any,
or interest on, redemption, purchase, repurchase, retirement, defeasance,
sinking fund or similar payment or deposit for payment with respect to, any
Subordinated Debt, and (iv) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Holding, Company or any of their Subsidiaries
now or hereafter outstanding (other than any such rights held by Holding or a
Subsidiary thereof).
"RESTRUCTURING CHARGES" means, as of any date of determination,
restructuring costs incurred to the extent that such restructuring costs are
actually deducted in arriving at earnings (including but not limited to
severance costs and write-off of unamortized debt issuance costs originally
incurred with respect to the First Restatement).
"REVOLVING CREDIT COMMITMENT" or "REVOLVING CREDIT COMMITMENTS" has the
meaning set forth in subsection 2.1A, as the same shall be reduced from time to
time in accordance with this Agreement.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE" means January 4, 1999, or
such earlier
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date, if any, upon which the Commitments are terminated and all Obligations
are paid in full or become immediately due and payable.
"REVOLVING CREDIT LOANS" means the Revolving Credit Loans made by Lenders
to Company pursuant to subsection 2.1A.
"REVOLVING CREDIT NOTE" means each promissory note of Company evidencing
the obligation to repay Revolving Credit Loans hereunder, substantially in the
form annexed hereto as EXHIBIT VIII, as amended, amended and restated,
supplemented, extended, renewed or otherwise modified from time to time, and any
substitution therefor.
"SALE/LEASEBACK" has the meaning assigned to that term in subsection 6.8.
"SECURITIES" means any capital stock or shares thereof, voting trust
certificates, bonds, debentures, options, warrants, notes, or other evidences of
indebtedness (other than accounts receivable), secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities".
"SOLVENT" means, with respect to any Person, that as of the date of
determination (i) the then fair value of the property of such Person is greater
than the total amount of liabilities (including Contingent Obligations) of such
Person and the then fair saleable value of the assets of such Person is greater
than the amount that will be required to pay the probable liabilities on such
Person's then existing debts as they become absolute and matured, considering
all financing alternatives and potential asset sales reasonably available to
such Person; (ii) such Person's capital is not unreasonably small in relation to
its business or any contemplated or undertaken transaction; and (iii) such
Person does not intend to incur, or believe or reasonably should believe that it
will incur, debts beyond its ability to pay such debts as they become due.
"STANDBY LETTERS OF CREDIT" means a letter of credit under which Issuing
Lender agrees to make payments for the account of Company, on behalf of Company
or any Domestic Subsidiary, in respect of obligations of Company or any Domestic
Subsidiary incurred pursuant to contracts made or performances undertaken or to
be undertaken or like matters relating to contracts to which Company or any
Domestic Subsidiary is or proposes to become a party in the ordinary course of
its business, including, without limiting the foregoing, for insurance purposes
or in respect of advance payments or as bid or performance bonds or for any
other purpose for which a standby letter of credit might customarily be issued.
"SUBORDINATED DEBT" means any Indebtedness of Holding or its Subsidiaries
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
reasonably satisfactory to Agent and Requisite Lenders.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of stock generally entitled (other than only by reason of the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof. References herein to Subsidiaries shall mean references to the direct
or indirect Subsidiaries of Holding unless otherwise specified, and references
herein (other than in subsection 4.1C and subsection 6.12) to the Subsidiaries
of Holding and Company shall not include the Subsidiaries identified on Schedule
5.13-B so long as no breach of subsection 4.1C or subsection 6.12 exists.
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"SUBSIDIARY GUARANTY" means each Subsidiary Guaranty executed and delivered
by ICMI, Future Graphics, Nu-kote Imaging, and Nu-kote Imperial as of
February 24, 1995, substantially in the form annexed to the Original Credit
Agreement as EXHIBIT XIII thereto, as such agreements may be amended, amended
and restated, supplemented or otherwise modified from time to time.
"SUBSIDIARY PATENT SECURITY AGREEMENT" means each Patent Security Agreement
executed and delivered by ICMI, Future Graphics, Nu-kote Imaging and Nu-kote
Imperial as of February 24, 1995, substantially in the form annexed to the
Original Credit Agreement as EXHIBIT XI thereto, as amended as of October 15,
1996, as such agreement may be amended, amended and restated, supplemented or
otherwise modified from time to time.
"SUBSIDIARY SECURITY AGREEMENT" means each Security Agreement executed and
delivered by ICMI, Future Graphics, Nu-kote Imaging and Nu-kote Imperial as of
February 24, 1995, substantially in the form annexed to the Original Credit
Agreement as EXHIBIT XII thereto, as amended as of October 15, 1996, as such
agreement may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"SUBSIDIARY SECURITY DOCUMENTS" means any or all of the Subsidiary Security
Agreements, the Subsidiary Guaranties, the Subsidiary Trademark Pledges and the
Subsidiary Patent Security Agreements.
"SUBSIDIARY TRADEMARK PLEDGE" means each Trademark Security Agreement
executed and delivered by ICMI, Future Graphics, Nu-kote Imaging and Nu-kote
Imperial as of February 24, 1995, substantially in the form annexed to the
Original Credit Agreement as EXHIBIT VIII thereto, as amended as of October 15,
1996, as such agreement may be amended, amended and restated, supplemented or
otherwise modified from time to time.
"SWISS FACILITY AGREEMENT" means that certain Third Amended and Restated
Revolving Credit Facility Agreement, dated as of July 31, 1997, among
Eurocurrency Administrative Agent, Eurocurrency Documentation Agent, the
Eurocurrency Collateral Agent, the lenders party thereto and Produktions and
Pelikan Hardcopy, as amended, amended and restated, supplemented or otherwise
modified from time to time.
"SWISS/U.K. TRANSFER" means any Asset Transfer involving fixtures,
machinery and equipment in which such assets are located in Switzerland
immediately before the Asset Transfer and are located in the United Kingdom
immediately after the Asset Transfer.
"TERMINATION EVENT" means (i) a "Reportable Event' described in
Section 4043 of ERISA and the regulations issued thereunder other than any such
Event with respect to which the 30-day notice requirement has been waived by
regulations of the PBGC and other than an event described in Section 4043(c)(9)
of ERISA, or (ii) the withdrawal of Company or any of its ERISA Affiliates from
a Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) or 4062(e) of ERISA, or (iii) the provision to
affected parties of a notice or intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate a Pension Plan by the
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PBGC, or (v) any other event or condition that would reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or (vi) the imposition of a lien
pursuant to Section 412(n) of the Internal Revenue Code.
"TOTAL UTILIZATION OF REVOLVING CREDIT COMMITMENTS" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Credit Loans, and (ii) the aggregate Letter of Credit
Usage.
"U.K. FACILITY AGREEMENT" means that certain Third Amended and Restated
Revolving Credit Facility Agreement, dated as of July 31, 1997, among
Eurocurrency Administrative Agent, the Eurocurrency Collateral Agent,
Eurocurrency Documentation Agent, the lenders party thereto and Pelikan
Scotland, as amended, amended and restated, supplemented or otherwise modified
from time to time.
"U.K. HOLDING" means N-K International Holding Limited, a corporation
organized under the laws of England.
"U.K. SUBSIDIARIES" means U.K. Holding and N-K International.
"U.K./SWISS TRANSFER" means any Asset Transfer involving fixtures,
machinery and equipment in which such assets are located in the United Kingdom
immediately before the Asset Transfer and are located in Switzerland immediately
after the Asset Transfer.
"UNISYS ACQUISITION AGREEMENT" means the Acquisition Agreement between
Xxxxxx Xxxxxxxxxxx and Company, dated as of November 20, 1987, as amended by the
letter agreement, dated January 14, 1987, and the Release Agreement, dated as of
January 25, 1990.
"U.S. ASSET SALE" means any Asset Sale transaction involving assets located
in the United States described in Section 6.7B(ii)(E), and shall not include any
Asset Sale transactions described in Section 6.7B(ii)(B), (C), (D) or (F) or in
the second PROVISO to Section 6.7(B)(ii).
"U.S./FOREIGN TRANSFER" means any Asset Transfer involving fixtures,
machinery and equipment in which such assets are located in the United States
immediately before the Asset Transfer and are located outside the United States
immediately after the Asset Transfer.
"U.S./U.S. TRANSFER" means any Asset Transfer involving fixtures, machinery
and equipment in which such assets, both immediately before and after the Asset
Transfer, are and remain in the United States.
"WARRANT AGREEMENT" means that certain Warrant Agreement executed and
delivered by Holding and Lenders of even date herewith, as such agreement may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
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1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement; Calculations; Computations
For purposes of this Agreement, all accounting terms not otherwise defined
herein shall have the meanings assigned to them in conformity with GAAP.
Financial statements and other information required to be delivered by Company
to Lenders pursuant to clauses (i), (ii) and (iii) of subsection 5.1 shall be
prepared in accordance with GAAP as in effect on the date of such financial
statements; amounts used for determining compliance with the financial covenants
set forth in subsection 6.6 shall be computed in accordance with GAAP as in
effect on March 31, 1997. To the extent that the determination of compliance
with any covenant contained in subsections 6.1, 6.2, 6.3, 6.4 and 6.7B hereof
requires the conversion to Dollars of foreign currency amounts, such Dollar
amount shall be the Dollar Equivalent of the amount of such foreign currency at
the time such item is to be or originally was incurred, created or suffered or
permitted to exist or assumed or transferred or sold for purposes of this
Agreement (except if such item was incurred, created or assumed, or suffered or
permitted to exist or transferred or sold prior to the date hereof, such
conversion shall be made based on the Dollar Equivalent of the amounts of such
foreign currency at the date hereof).
1.3 Other Definitional Provisions
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference.
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SECTION 2. AMOUNTS AND TERMS OF REVOLVING CREDIT COMMITMENTS AND REVOLVING
CREDIT LOANS
2.1 Revolving Credit Loans
A. REVOLVING CREDIT COMMITMENTS.
Subject to the terms and conditions of this Agreement and in reliance upon
the representations and warranties of Company herein set forth, each Lender
hereby severally agrees to lend to Company from time to time on or after the
Closing Date to but excluding the Revolving Credit Commitment Termination Date
such additional amounts which would not cause the outstanding principal amount
of its Revolving Credit Loans to at any time exceed its Pro Rata Share of the
aggregate Revolving Credit Commitments (as defined below) to be used for the
purposes identified in subsection 2.5A. Each Lender's commitment to make
Revolving Credit Loans to Company pursuant to this subsection 2.1A is herein
called its "REVOLVING CREDIT COMMITMENT" and such commitments of all Lenders in
the aggregate are herein called the "REVOLVING CREDIT COMMITMENTS". The
original amount of each Lender's Revolving Credit Commitment is set forth on
SCHEDULE 1.1 annexed hereto and the aggregate initial amount of the Revolving
Credit Commitments is $100,000,000. Each Lender's Revolving Credit Commitment
shall expire on the Revolving Credit Commitment Termination Date and all
Revolving Credit Loans and all other amounts owed hereunder with respect to the
Revolving Credit Loans shall be paid in full no later than that date. The
amount of the Revolving Credit Commitments shall be reduced by the amount of all
reductions thereof made pursuant to subsection 2.4E through the date of
determination. In no event shall the aggregate outstanding principal amount of
the Revolving Credit Loans from any Lender at any time exceed its Revolving
Credit Commitment then in effect.
All Revolving Credit Loans under this Agreement shall be made by Lenders
simultaneously and proportionately to their Pro Rata Shares of the Revolving
Credit Commitments, it being understood that no Lender shall be responsible for
any default by any other Lender in that other Lender's obligation to make
Revolving Credit Loans hereunder nor shall the Revolving Credit Commitment of
any Lender be increased or decreased as a result of the default by any other
Lender in that other Lender's obligation to make Revolving Credit Loans
hereunder. Amounts borrowed by Company under this subsection 2.1A may be repaid
and, to but excluding the Revolving Credit Commitment Termination Date,
reborrowed.
Notwithstanding the foregoing provisions of this subsection 2.1A and the
provisions of subsection 2.1B, the extensions of credit under the Revolving
Credit Commitments shall be subject to the following limitations in the amounts
and during the periods indicated:
(a) The amount otherwise available for borrowing under the Revolving
Credit Commitment as of any time of determination (other than to reimburse
Issuing Lender for the amount of any drawings under any Letters of Credit
honored by Issuing Lender and not theretofore reimbursed by Company) shall
be reduced by the aggregate Letter of Credit Usage as of such time of
determination;
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(b) At no time shall the Total Utilization of Revolving Credit
Commitments exceed $100,000,000; and
(c) In no event shall any Lender's Pro Rata Share of the Total
Utilization of Revolving Credit Commitments as of any date of determination
exceed its Revolving Credit Commitment then in effect.
B. NOTICE OF BORROWING. Subject to subsection 2.1A, whenever Company
desires to borrow Revolving Credit Loans under this subsection 2.1 it shall
deliver to Agent a Notice of Borrowing no later than 12:00 noon (Dallas time) on
the date of the proposed Funding Date. The Notice of Borrowing shall specify
(a) the proposed Funding Date (which shall be a Business Day), (b) the amount of
the proposed Revolving Credit Loan, and (c) that the Total Utilization of
Revolving Credit Commitments (after giving effect to the Revolving Credit Loans
then requested) will not exceed the Revolving Credit Commitments then in effect.
Revolving Credit Loans shall be made in an aggregate minimum amount of $500,000
and integral multiples of $500,000 in excess of that amount. In lieu of
delivering the above-described Notice of Borrowing, Company may give Agent
telephonic notice by the required time of any proposed borrowing of Revolving
Credit Loans under this subsection 2.1; PROVIDED that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to Agent on
or prior to the Funding Date of the requested Revolving Credit Loans.
Neither Agent nor any Lender shall incur any liability to Company in acting
upon any telephonic notice referred to above that Agent believes in good faith
to have been given by a duly authorized officer or other person authorized to
borrow on behalf of Company or for otherwise acting in good faith under this
subsection 2.1B and upon funding of Revolving Credit Loans by Lenders in
accordance with this Agreement pursuant to any such telephonic notice, Company
shall have effected Revolving Credit Loans hereunder.
C. DISBURSEMENT OF FUNDS. Promptly after receipt of a Notice of
Borrowing relating to a Revolving Credit Loan pursuant to subsection 2.1B (or
telephonic notice thereof), Agent shall notify each Lender of the proposed
borrowing. Each Lender shall make the amount of its Revolving Credit Loan
available to Agent, in same day funds, at the office of Agent located at
NationsBank Plaza, 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000 not later
than 1:00 P.M. (Dallas time) on the Funding Date. Upon satisfaction or waiver
of the conditions precedent specified in subsection 3.1 and 3.2, Agent shall
make the proceeds of such Revolving Credit Loans available to Company on such
Funding Date by causing an amount of same day funds equal to the proceeds of all
such Revolving Credit Loans received by Agent to be credited to the account of
Company at such office of Agent, Account Number 1291369149, ABA #000000000.
Unless Agent shall have been notified by any Lender prior to any Funding
Date in respect of any Revolving Credit Loans that such Lender does not intend
to make available to Agent the amount of such Lender's Revolving Credit Loan to
be funded on such Funding Date (which such notice, if so received by Agent,
shall promptly be communicated to Company), Agent may assume that such Lender
has made such amount available to Agent on such Funding Date and Agent in its
sole discretion may, but shall not be obligated to, make available to Company a
corresponding amount on such Funding Date. If such corresponding amount is not
in fact made available to Agent by such Lender,
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Agent shall be entitled to recover such corresponding amount on demand from
such Lender together with interest thereon, for each day from such Funding
Date until the date such amount is paid to Agent, at the Federal Funds Rate
in effect from time to time for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith
upon Agent's demand therefor, (i) Agent shall promptly notify Company, and
Company shall immediately pay such corresponding amount to Agent and (ii)
notwithstanding subsection 6.1, Company may borrow a like amount on an
unsecured basis from any Person for a period ending on the date upon which
such Lender does in fact make such amount of such Lender's Revolving Credit
Loan available. Nothing in this subsection 2.1C (and no such borrowing by
Company) shall be deemed to relieve any Lender from its obligation to fulfill
its Revolving Credit Commitment hereunder or to prejudice any rights that
Company may have against any Lender as a result of any default by such Lender
hereunder, and such unsecured borrowing shall not be deemed to increase the
amount of Lenders' Revolving Credit Commitments hereunder.
D. REGISTER.
(i) Agent shall maintain a register (the "REGISTER") on which it will
record the Commitments from time to time of each of the Lenders, the
Revolving Credit Loans maintained or made by each of the Lenders and each
repayment in respect of the principal amount of the Revolving Credit Loans
of each Lender. Any such recordation shall be conclusive and binding,
absent manifest error.
(ii) Each Lender will record on its internal records the amount of
each Revolving Credit Loan maintained or made by it and each payment in
respect thereof. Failure to make any such recordation, or any error in
such recordation, shall not affect the Obligations of Company in respect of
such Revolving Credit Loans. Any such recordation shall be conclusive and
binding, absent manifest error.
2.2 Interest on the Revolving Credit Loans
A. RATE OF INTEREST. Subject to the provisions of subsections 2.2C and
2.8, each Revolving Credit Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at the lesser of (i) the Base Rate or (ii) the Highest Lawful Rate.
If the amount of interest payable in respect of any interest computation
pursuant to clause (i) above is reduced to Highest Lawful Rate and the amount of
interest payable in respect of any subsequent interest computation period would
be less than the Maximum Amount, then the amount of interest payable in respect
of such subsequent interest computation period shall be automatically increased
to the Maximum Amount; PROVIDED that at no time shall the aggregate amount by
which interest paid has been increased pursuant to this sentence exceed the
aggregate amount by which interest has been reduced pursuant to clause (i) above
of this subsection 2.2A.
B. INTEREST PAYMENTS. Subject to subsection 2.2C, interest shall be
payable on the Revolving Credit Loans in arrears on and to (but not including)
the last Business Day of each month
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commencing on the first such date to occur after the Closing Date, and at
maturity.
C. DEFAULT RATE; POST MATURITY INTEREST. Any principal payments on the
Revolving Credit Loans not paid when due and, to the extent permitted by
Applicable Law, any interest payments on the Revolving Credit Loans, Commitment
Fees and compensation payable in respect of Letters of Credit pursuant to
subsection 2.7E not paid when due and any other fees and other amounts payable
hereunder not paid within 10 days of the date when due (the "DUE DATE"), in each
case whether at stated maturity, by notice of prepayment, by acceleration or
otherwise, shall upon delivery of written notice to Company from Agent bear
interest from and after the Due Date payable upon demand at a rate that is three
percent (3%) per annum in excess of the rate of interest otherwise payable under
this Agreement (or, in the case of fees and other amounts due hereunder, at the
Base Rate PLUS 3%), but in any case not in excess of the Highest Lawful Rate.
The payment or acceptance of the increased rate provided by this subsection 2.2C
shall not constitute a waiver of any Event of Default or an amendment to this
Agreement or otherwise prejudice or limit any rights or remedies of Agent or any
Lender.
D. COMPUTATION OF INTEREST. Subject to subsection 10.18, interest on the
Revolving Credit Loans shall be computed on the basis of a 360-day year and the
actual number of days elapsed in the period during which it accrues. In
computing interest on any Revolving Credit Loan, the date of the making of such
Revolving Credit Loan shall be included; and the date of payment shall be
excluded; PROVIDED that if a Revolving Credit Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Revolving Credit
Loan.
2.3 Fees
A. Subject to subsection 10.18, Company agrees to pay to Agent on the
Closing Date, for the account of each Lender, a facility fee equal to the
product of (i) 0.50% times (ii) the sum of (x) such Lender's Revolving Credit
Commitment on the Closing Date plus (y) such Lender's Commitments under and as
defined in the Eurocurrency Credit Agreements on the Closing Date, MINUS
$200,000.
B. Subject to subsection 10.18, Company agrees to pay to Agent, for the
account of each Lender, a facility fee equal to the product of (i) 1.0% times
(ii) the sum of (x) such Lender's Revolving Credit Commitment on the Closing
Date minus the mandatory reductions thereof required on or before June 30, 1998,
by subsection 2.4E(ii) of this Agreement to the extent actually made, PLUS
(y) such Lender's Commitments under the Eurocurrency Credit Agreements on the
Closing Date. Provided that payment of such fee shall be deferred until
June 30, 1998, or the Revolving Credit Commitment Termination Date, whichever is
earlier, although such fee shall be earned and payable as of the Closing Date.
C. Subject to subsection 10.18, Company agrees to pay to Agent, for the
account of each Lender, a facility fee equal to the product of (i) 1.0% times
(ii) the sum of (x) such Lender's Revolving Credit Commitment on the Closing
Date minus the mandatory reductions thereof required on or before January 1,
1999, by subsection 2.4E(ii) of this Agreement to the extent actually made, PLUS
(y) such Lender's Commitments under the Eurocurrency Credit Agreements on the
Closing Date; PROVIDED that
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although such fee shall be earned and payable as of the Closing Date, payment
of such fee shall be deferred until the Revolving Credit Termination Date,
and if all Obligations shall have been repaid in full and all commitments of
the Lenders and the Eurocurrency Lenders shall have been terminated prior to
January 1, 1999, this fee shall not be payable. To induce the Lenders to
agree to waive payment of such fee as aforementioned, Company agrees to use
its reasonable best efforts to access available capital markets and use all
other reasonable means at its disposal for the purpose of repaying the
Revolving Credit Loans and the Eurocurrency Loans before the Revolving Credit
Termination Date.
D. Such fees shall be fully-earned upon the Closing Date, subject to
subsection 10.18, non-refundable when paid, and shall be payable in Dollars.
For the purposes of calculating such fees, any amounts denominated in (a) Pounds
Sterling shall be translated into Dollars utilizing the same exchange rate
pursuant to which the aggregate amount as of the Closing Date of Commitments in
such currency under the U.K. Credit Agreement was determined and (b) Swiss
Francs shall be translated into Dollars utilizing the same exchange rate
pursuant to which the aggregate amount as of the Closing Date of Commitments in
such currency under the Swiss Credit Agreement was determined.
E. Company agrees to pay to Agent for distribution to each Lender in
proportion to that Lender's Pro Rata Share of the Revolving Credit Commitments
commitment fees ("COMMITMENT FEES") for the period from and including the
Closing Date to but excluding the Revolving Credit Commitment Termination Date
equal to the average of the daily unused portion of the Revolving Credit
Commitments MULTIPLIED by the Commitment Fee Percentage, such Commitment Fees to
be calculated, subject to subsection 10.18, on the basis of a 360-day year and
the actual number of days elapsed and to be payable in arrears on and to (but
not including) the last Business Day of each fiscal quarter of each year,
commencing on the first such date to occur after the Closing Date, and upon the
Revolving Credit Commitment Termination Date. Anything contained in this
Agreement to the contrary notwithstanding, for purposes of calculating the
Commitment Fees payable by Company pursuant to this subsection 2.3 the "unused
portion of the Revolving Credit Commitments," as of any date of determination,
shall be an amount equal to the aggregate amount of Revolving Credit Commitments
(as the same may have been reduced pursuant to subsection 2.4E) as of such date
MINUS the aggregate principal amount of all outstanding Revolving Credit Loans
on such date, and the unused portion of the Revolving Credit Commitments shall
not be reduced by reason of the issuance of Letters of Credit or by any
limitation of the amount available for borrowing thereunder set forth in the
numbered paragraphs of subsection 2.1A.
F. Company agrees to pay to Agent, for its own account, an annual agent's
administrative fee in the amount of $100,000 per annum, payable quarterly in
advance commencing on October 15, 1997, and on the 15th day of each January,
April, July, and October thereafter, in compensation for its services as agent
under this Agreement.
G. Company agrees to pay to Eurocurrency Administrative Agent, for its
own account, an agent's administrative fee in the amount of 50,000 Pounds
Sterling, payable on March 1, 1998, in compensation for its services as agent
under the Eurocurrency Credit Agreements.
2.4 Prepayments and Payments of Revolving Credit Loans; Reductions in
Revolving Credit Loan Commitments
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A. PREPAYMENTS.
(i) VOLUNTARY REPAYMENTS OF REVOLVING CREDIT LOANS. Company may,
upon prior written or telephonic notice by no later than 12:00 noon (Dallas
time) on the date of repayment confirmed in writing to Agent (which notice
Agent will promptly transmit by telegram, telex or telephone to each
Lender, any such telephonic notice to be promptly confirmed by Agent in
writing) at any time and from time to time repay Revolving Credit Loans.
Notice of repayment having been given as aforesaid, the principal amount of
the Revolving Credit Loans specified in such notice shall become due and
payable on the repayment date.
(ii) MANDATORY PREPAYMENT OF REVOLVING CREDIT LOANS FROM ASSET SALES.
The Company shall, promptly on the date of receipt of any Net Cash Proceeds
from any Asset Sale, prepay an aggregate principal amount of the Revolving
Credit Loans in an amount equal to the amount of such Net Cash Proceeds,
with each such prepayment constituting a permanent reduction in the
Revolving Credit Commitments, until such time as such Net Cash Proceeds
received by Lenders shall equal $5,000,000 and the Revolving Credit
Commitments shall have been reduced by such amount. Thereafter the Company
shall, promptly on the date of receipt of any Net Cash Proceeds from any
Asset Sale, prepay an aggregate principal amount of the Revolving Credit
Loans in an amount equal to 85% of such Net Cash Proceeds, which amount
shall constitute a permanent reduction in the Revolving Credit Commitments,
until such time as the Lenders shall have received an additional $5,000,000
in Net Cash Proceeds. Thereafter the Company shall, promptly on the
receipt of any Net Cash Proceeds from any Asset Sale, prepay an aggregate
principal amount of the Revolving Credit Loans or Eurocurrency Loans as
elected by Requisite Lenders in an amount equal to 75% of such Net Cash
Proceeds, which amount shall constitute a permanent reduction in the
Revolving Credit Commitments or the Commitments of the Eurocurrency Lenders
under the Eurocurrency Credit Agreements (whichever is prepaid with such
proceeds). Notwithstanding the foregoing, subject to the provisions of
subsection 6.7, the Company shall, promptly on the date of receipt of any
Net Cash Proceeds from the sale of MIT or any Asset Sale with respect to
assets of MIT, prepay an aggregate principal amount of the Revolving Credit
Loans or Eurocurrency Loans as elected by Requisite Lenders in an amount
equal to 100% of such Net Cash Proceeds, which amount shall constitute a
permanent reduction in the Revolving Credit Commitments or the Commitments
of the Eurocurrency Lenders under the Eurocurrency Credit Agreements
(whichever is prepaid with such proceeds). Any amount retained by the
Company under this subsection (ii) shall be used for working capital and
other general corporate purposes.
(iii) OTHER MANDATORY PREPAYMENT OF REVOLVING CREDIT LOANS. In
addition to any amounts due under subsection 2.4A(ii) above, the Company
shall:
(a) On January 2, 1998, April 1, 1998, July 1, 1998, and October 1,
1998, prepay an aggregate principal amount of the Revolving
Credit Loans in the amount, if any, necessary to reduce the sum
of the aggregate principal amount of all Revolving Credit Loans
on such date PLUS the Letter of Credit Usage on such date, to an
amount which does not exceed the aggregate Revolving Credit
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Commitments. On each such date the Company shall also prepay all
accrued and unpaid interest on the principal amount so prepaid.
(b) On each date after April 1, 1998, when no Event of Default exists
and Holding issues any equity securities when the aggregate
Revolving Credit Commitments and the Commitments of Eurocurrency
Lenders equal less than $140,000,000, EXCEPT issuances resulting
from the exercise of employee stock options, Company shall make a
mandatory prepayment of the Obligations and the obligations under
the Eurocurrency Credit Agreements, as Requisite Lenders may
elect in their sole discretion, in an amount equal to 50% of the
cash proceeds of any such equity issuances net of all ordinary
reasonable legal expenses, commissions and other fees and
expenses paid or to be paid to Persons not Affiliates of the
Company. When the aggregate Revolving Credit Commitments and the
Commitments of Eurocurrency Lenders equal or exceed $140,000,000,
100% of such cash proceeds shall be paid as a mandatory
prepayment of the Obligations and the obligations under the
Eurocurrency Credit Agreements, as Requisite Lenders may elect in
their sole discretion until such commitments are reduced to
$140,000,000. All such proceeds shall be applied to permanently
reduce the Revolving Credit Commitments or the Commitments of the
Eurocurrency Lenders under the Eurocurrency Credit Agreements
(whichever is prepaid with such proceeds). At such time the
Company shall also prepay all accrued and unpaid interest on the
principal amount so prepaid.
(c) On each date Holding or the Company issues any Indebtedness,
other than as permitted by subsection 6.1, with the consent and
upon terms and conditions satisfactory to Requisite Lenders,
Borrower shall make a mandatory prepayment of the Obligations and
the obligations under the Eurocurrency Credit Agreements, as
Requisite Lenders may elect in their sole discretion, in an
amount EQUAL to 100% of the cash proceeds of any such
Indebtedness issuances net of all ordinary reasonable legal
expenses, commissions and other fees and expenses paid or to be
paid to Persons not Affiliates of the Company. All such proceeds
shall be applied to permanently reduce the Revolving Credit
Commitments or the Commitments of the Eurocurrency Lenders under
the Eurocurrency Credit Agreements (whichever is prepaid with
such proceeds). At such time the Company shall prepay all
accrued and unpaid interest on the principal amount so prepaid.
B. MANNER AND TIME OF PAYMENT. All payments of principal, interest and
fees hereunder by Company shall be made without defense, set-off or counterclaim
and in same day funds and delivered to Agent not later than 12:00 noon (Dallas
time) on the date due at its office located at 000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxx 00000 for the account of Lenders; funds received by Agent after
that time shall be deemed to have been paid by Company on the next succeeding
Business Day.
C. APPORTIONMENT OF PAYMENTS. Aggregate principal and interest payments
shall be
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apportioned ratably to Lenders, proportionately to Lenders' respective Pro
Rata Shares. Agent shall promptly distribute to each Lender at its primary
address set forth below its name on the appropriate signature page hereof or
such other address as any Lender may request its share of all such payments
received by Agent and the commitment fees of such Lender when received by
Agent pursuant to Section 2.3.
D. PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder
or of the commitment and other fees hereunder, as the case may be.
E. REDUCTIONS OF REVOLVING CREDIT COMMITMENTS.
(i) Company shall have the right, at any time and from time to time,
to terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Credit Commitments in an amount up to the amount by
which the Revolving Credit Commitments exceed the Total Utilization of
Revolving Credit Commitments. Company shall give not less than three
Business Days' prior written notice to Agent designating the date (which
shall be a Business Day) of such termination or reduction and the amount of
any partial reduction. Promptly after receipt of a notice of such
termination or partial reduction, Agent shall notify each Lender of the
proposed termination or reduction. Such termination or partial reduction
of the Revolving Credit Commitments shall be effective on the date
specified in Company's notice and shall reduce the Revolving Credit
Commitment of each Lender proportionately to its Pro Rata Share of the
Revolving Credit Commitments. Any such partial reduction of the Revolving
Credit Commitments shall be in an aggregate minimum amount of $5,000,000
and integral multiples of $500,000 in excess of that amount unless the
remaining amount of such Commitments is less than $5,000,000 in which case
such reduction shall be in the amount of the then remaining Revolving
Credit Commitments. The Revolving Credit Commitments shall be permanently
reduced by the amount of any mandatory prepayment of the Revolving Credit
Loans that shall be required to be made pursuant to subsections 2.4A(ii)
and 2.4A(iii).
(ii) In addition to the reductions specified in subsection 2.4E(i)
above, the Revolving Credit Commitments shall automatically and permanently
reduce by the amount of $2,500,000 on each of January 2, 1998, April 1,
1998, July 1, 1998, and October 1, 1998.
2.5 Use of Proceeds
A. REVOLVING CREDIT LOANS. The proceeds of the Revolving Credit Loans
shall be applied by Company for its general corporate purposes, which may
include, without limitation, (i) working capital, (ii) the refinancing of the
debt outstanding under the First Restatement and certain other debt,
(iii) capital expenditures and certain other expenditures permitted hereby,
including the payment of restructuring costs and the making of Investments in
Subsidiaries as permitted by subsection 6.3, and (iv) reimbursement to any
Issuing Lender of any amounts drawn under any Letter of Credit as provided in
subsection 2.7C.
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B. LETTERS OF CREDIT. The Letters of Credit shall only be requested for
the following general corporate purposes: (i) supporting workers' compensation
liabilities, (ii) supporting obligations to third party insurers,
(iii) supporting performance, payment, deposit or surety obligations under law
or governmental rule or regulation or in accordance with industry custom and
practice, or (iv) supporting obligations incurred in connection with the
purchase of goods and services in the ordinary course of business.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company to purchase or carry any Margin Stock in
any manner that might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T, or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of the Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
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2.6 Capital Adequacy Adjustment
In the event that any Lender shall have reasonably determined that the
adoption or implementation after the date hereof of any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, including, without limitation, any change in the
regulations set forth at 12 C.F.R. Part 208 (Appendix A) and 12 C.F.R. Part
225 (Appendix A), or any change therein or in the interpretation or
application thereof, or compliance by any Lender with any request or
directive regarding capital adequacy (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) from any
central bank or governmental agency or body having jurisdiction, does or
shall have the effect of increasing the amount of capital required to be
maintained by such Lender or any corporation controlling such Lender and
thereby reducing the rate of return on such Lender's or such other
corporation's capital as a consequence of its obligations hereunder to a
level below that which such Lender or such other corporation would have
achieved but for the occurrence of such circumstances, then Company shall
from time to time, within ten (10) Business Days of written notice and demand
from such Lender (with a copy to the Agent) claiming compensation pursuant to
this subsection 2.6, including a certificate (x) stating that one of the
events described in this subsection 2.6 has occurred and describing in
reasonable detail the nature of such event, (y) stating the amount of the
reduction in the rate of return on such Lender's or such other corporation's
capital reasonably determined by such Lender to be allocable to the existence
of such Lender's commitment to lend hereunder and (z) setting forth in
reasonable detail the manner of calculation of the reduction in the rate of
return on such Lender's or such other corporation's capital and such
allocated amount thereof, pay to Agent, for the account of such Lender,
additional amounts sufficient to compensate such Lender or such other
corporation for such allocated reduction. Such certificate as to the amount
of such compensation, submitted to Company and Agent by such Lender, shall,
absent manifest error, be final, conclusive and binding for all purposes. In
determining such amount, a Lender may use any averaging and attribution
method; PROVIDED, HOWEVER, that such method shall be reasonable.
Notwithstanding the foregoing, nothing in this subsection 2.6 is intended to
provide and this subsection 2.6 shall not provide to Holding, Company or any
Domestic Subsidiary entering into a Domestic Loan Document the right to
inspect the records, files or books of any Lender. For the avoidance of
doubt, no amount shall be required to be paid to any Lender or Agent under
this subsection 2.6 in respect of any increased cost or reduced return
arising from the implementation of, or compliance by any Lender with, any
rule, regulation, guideline, order or other request or directive regarding
capital adequacy which is in existence at the date hereof.
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2.7 Letters of Credit
A. LETTERS OF CREDIT. In addition to Company requesting that Lenders
make Revolving Credit Loans pursuant to subsection 2.1, Company may request,
in accordance with the provisions of this subsection 2.7A and subsection
2.7B, on and after the date on which all of the conditions set forth in
subsection 3.1 are satisfied to and excluding the Revolving Credit Commitment
Termination Date, that NationsBank (or, if NationsBank is unwilling to
provide such Letters of Credit, one or more Lenders; PROVIDED that, if no
other Lender is willing to provide any Letter of Credit, NationsBank shall,
if each of the conditions to issuance of such Letter of Credit in this
Agreement is met, issue such Letter of Credit) issue Letters of Credit for
the account of Company, on behalf of Company or any Material Domestic
Subsidiary; PROVIDED that (i) Company shall not request that any Lender issue
(and no Lender shall issue) any Letter of Credit if, after giving effect to
such issuance, the Total Utilization of Revolving Credit Commitments would
exceed the aggregate of all Revolving Credit Commitments, and (ii) Company
shall not request that any Lender issue any Letter of Credit if, after giving
effect to such issuance, the aggregate Letter of Credit Usage would exceed
$10,000,000. In no event shall any Lender issue any Letter of Credit having
an expiration date later than the earlier of (y) the Revolving Credit
Commitment Termination Date, as in effect on the date of issuance of such
Letter of Credit, or (z) the date which is eighteen months from the date of
issuance of such Letter of Credit; PROVIDED, that this clause (z) shall not
prevent any Issuing Lender from agreeing that a Letter of Credit will
automatically be extended annually for a period not to exceed one year unless
such Issuing Lender elects not to extend for such additional period. The
issuance or extension of any Letter of Credit in accordance with the
provisions of this subsection 2.7 shall require the satisfaction of each
condition set forth in subsection 3.3; PROVIDED, HOWEVER, the obligation of
each Issuing Lender to issue or extend any Letter of Credit is subject to the
condition that (i) such Issuing Lender believed in good faith that all
conditions under subsections 2.7A and 3.3 to the issuance or extension of
such Letter of Credit were satisfied at the time such Letter of Credit was
issued or extended or (ii) the satisfaction of any such condition not
satisfied had been waived by Requisite Lenders prior to or at the time such
Letter of Credit was issued or extended; PROVIDED FURTHER that Issuing Lender
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons,
including, without limitation, an Officer's Certificate from Company as to
the satisfaction of the conditions under subsection 3.3, in determining the
satisfaction of any conditions to the issuance or extension of any Letter of
Credit or the Total Utilization of Revolving Credit Commitments or aggregate
Letter of Credit Usage then in effect.
Immediately upon the issuance of each Letter of Credit (or with respect
to the Existing Letters of Credit, upon the Closing Date and satisfaction of
the conditions set forth in subsections 3.1 and 3.3), each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and drawings thereunder in an
amount equal to such Lender's Pro Rata Share of the Revolving Credit
Commitments of the maximum amount which is or at any time may become
available to be drawn thereunder.
Each Letter of Credit supporting the payment of Indebtedness may provide
that, upon the occurrence of an Event of Default and the acceleration of the
maturity of the Revolving Credit Loans,
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the Issuing Lender shall pay the beneficiary thereof if (and only if) payment
is then due by the terms of such Letter of Credit to such beneficiary, or if
such payment is not then due to such beneficiary, may provide (as and to the
extent contemplated by the "THEN" clause of Section 8) for the deposit of
funds in an account of Issuing Lender to secure payment to such beneficiary
and that any funds so deposited shall be paid to such beneficiary if all
conditions to such payment under such Letter of Credit are satisfied or
returned to the Issuing Lender for distribution to Lenders (or, if all
Obligations shall have been indefeasibly paid in full, to Company) if no
payment to such beneficiary has been made and the final date available for
drawings under such Letter of Credit has passed. Each payment or deposit of
funds by the Issuing Lender as provided in this paragraph shall be treated
for all purposes of this Agreement as a drawing duly honored by the Issuing
Lender under the related Letter of Credit.
B. NOTICE OF ISSUANCE. Whenever Company desires to cause a Lender to
issue a Letter of Credit, it shall deliver to that Lender and Agent a Notice
of Issuance of Letter of Credit in the form annexed hereto as EXHIBIT II no
later than 12:00 noon (Dallas time) at least four Business Days in advance of
the proposed date of issuance or such shorter time as may be acceptable to
the Issuing Lender. The Notice of Issuance of Letter of Credit shall specify
(i) the proposed Issuing Lender (which shall be NationsBank unless
NationsBank declines to issue such Letter of Credit), (ii) the proposed date
of issuance (which shall be a Business Day), (iii) the face amount of the
Letter of Credit, (iv) the expiration date of the Letter of Credit, (v) the
name and address of the beneficiary, and (vi) such other documents or
materials as such Issuing Lender may reasonably request; PROVIDED that the
Issuing Lender, in its sole judgment, may require changes in any such
documents and materials; PROVIDED further that the Issuing Lender shall not
be required to issue any Letter of Credit that on its terms requires payment
thereunder prior to the third Business Day following receipt by the Issuing
Lender of such documents and materials. In determining whether to pay any
Letter of Credit, the Issuing Lender shall be responsible only to use
reasonable care to determine that the documents and materials required to be
delivered under that Letter of Credit have been delivered and that they
comply on their face with the requirements of that Letter of Credit.
Promptly upon the issuance of a Letter of Credit, the Issuing Lender shall
notify each Lender of the issuance and the amount of each such other Lender's
respective participation therein determined in accordance with subsection
2.7D.
C. PAYMENT OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT. In the event of
any request for drawing under any Letter of Credit by the beneficiary
thereof, the Issuing Lender shall immediately notify Company and Agent, and
Company shall reimburse the Issuing Lender on the day on which such drawing
is honored in an amount in same day funds equal to the amount of such
drawing, plus accrued interest, if any, on such amount at the rate set forth
in subsection 2.7E(4).
D. PAYMENT BY LENDERS. If Company shall fail to reimburse the Issuing
Lender, for any reason, as provided in subsection 2.7C in an amount equal to
the amount of any drawing honored by the Issuing Lender under a Letter of
Credit issued by it, the Issuing Lender shall promptly notify each Lender of
the unreimbursed amount of such drawing and of such Lender's respective
participation therein based on such Lender's Pro Rata Share of the Revolving
Credit Commitments. Each Lender shall make available to the Issuing Lender
an amount equal to its respective participation, in same day funds, at the
office of the Issuing Lender specified in such notice, not later than 12:00
noon (Dallas time) on the Business Day after the date notified by the Issuing
Lender. If any Lender fails to make available to the Issuing Lender the
amount of such Lender's participation in such Letter of Credit as
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provided in this subsection 2.7D, the Issuing Lender shall be entitled to
recover such amount on demand from such Lender together with interest at the
customary rate set by the Issuing Lender for the correction of errors among
banks for one Business Day and thereafter at the Base Rate. Nothing in this
subsection 2.7 shall be deemed to prejudice the right of any Lender to
recover from the Issuing Lender any amounts made available by such Lender to
the Issuing Lender pursuant to this subsection 2.7D, or any rights of
Company, if it is determined in a final judgment by a court of competent
jurisdiction that the payment with respect to a Letter of Credit by the
Issuing Lender in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of the Issuing
Lender. The Issuing Lender shall distribute to each other Lender which has
paid all amounts payable by it under this subsection 2.7D with respect to any
Letter of Credit issued by the Issuing Lender such other Lender's Pro Rata
Share of the Revolving Credit Commitments of all payments received by the
Issuing Lender from Company or pursuant to the last paragraph of subsection
2.7A in reimbursement of drawings honored by the Issuing Lender under such
Letter of Credit when such payments are received.
E. COMPENSATION. Company agrees to pay the following amounts to the
Issuing Lender with respect to each Letter of Credit issued by it:
(1) an administrative fee equal to .125% per annum of the maximum
amount available from time to time to be drawn under such Letter of
Credit payable in arrears on and to (but not including) the last
Business Day of each fiscal quarter of each year, commencing on the
first such date to occur after the Closing Date;
(2) a commission on each Documentary Letter of Credit with an
initial expiration date of less than one year equal to 0.625% per annum
of the weighted average maximum amount available from time to time to be
drawn under such Letter of Credit, payable in arrears on and to (but not
including) the last Business Day of each fiscal quarter of each year,
commencing on the first such date to occur after the Closing Date.
(3) a commission on each (A) Standby Letter of Credit and (B)
Documentary Letter of Credit with an initial expiration date of one year
or more at a per annum rate equal to the product of (y) 3.00% times (z)
the weighted average maximum amount available from time to time to be
drawn during such period under such Letter of Credit, payable in arrears
on and to (but not including) the last Business Day of each fiscal
quarter of each fiscal year, commencing on the first such date to occur
after the Closing Date;
(4) with respect to drawings made under any Letter of Credit,
interest, payable on demand, on the amount paid by the Issuing Lender in
respect of each such drawing from the date of the drawing through the
date such amount is reimbursed by Company at a rate which is equal to
the Base Rate; PROVIDED that if such amount is not paid within three
Business Days, such amount shall bear interest thereafter at a rate
which is equal to 3.00% per annum in excess of the Base Rate which such
rate shall not thereafter be increased pursuant to subsection 2.2C, in
each case subject to the Highest Lawful Rate; and
(5) with respect to the issuance, amendment or transfer of each
Letter of Credit
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and each drawing made thereunder, reasonable documentary and processing
charges in accordance with the Issuing Lender's standard schedule for
such charges in effect at the time of such issuance, amendment, transfer
or drawing, as the case may be, or as otherwise agreed to by the Issuing
Lender.
Promptly upon receipt by Issuing Lender of any amount described in
clauses (2), (3) or (4) of this subsection 2.7E with respect to a Letter of
Credit, the Issuing Lender shall distribute to each Lender its Pro Rata Share
of the Revolving Credit Commitments of such amount.
F. OBLIGATIONS ABSOLUTE. The obligation of Company to reimburse the
Issuing Lender for drawings made under the Letters of Credit issued by it and
the obligations by Lenders under subsection 2.7D shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the
following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any persons or entities for whom
any such transferee may be acting), Agent, any Lender or any other
Person, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Company and the beneficiary for which the
Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; PROVIDED that the Issuing Lender
shall use reasonable care to determine that the documents and
certificates required to be delivered under any Letter of Credit have
been delivered and that they comply on their face with the requirements
of that Letter of Credit;
(iv) payment by the Issuing Lender under any Letter of Credit
against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit; PROVIDED
that the Issuing Lender shall use reasonable care to determine that the
documents and certificates required to be delivered under any Letter of
Credit have been delivered and that they comply on their face with the
requirements of that Letter of Credit;
(v) any adverse change in the condition (financial or otherwise)
of Holding or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by
Holding or any of its Subsidiaries, Agent, or any Lender (other than the
Issuing Lender);
(vii) any other circumstance or happening whatsoever, which is
similar to any of the
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foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
PROVIDED that Company shall not be required to pay any such amounts to the
extent they arise from the gross negligence or willful misconduct of the
Issuing Lender (as determined by a court of competent jurisdiction).
G. ADDITIONAL PAYMENTS. If, after the date hereof, by reason of (a)
the introduction of or change in the official interpretation of any
applicable law or regulation by the authority charged with the administration
or interpretation thereof or (b) compliance by the Issuing Lender or any
Lender with any guideline or request of any central bank or other
governmental authority or quasi-governmental authority exercising control
over banks or financial institutions generally (whether or not having the
force of law):
(i) the Issuing Lender or any Lender shall be subject to any
increase in the net amount of any tax, duty or other charge with respect
to the maintenance or fulfillment of its obligations under this
subsection 2.7 (except for any increase or other change in or with
respect to Excluded Taxes);
(ii) any reserve, special deposit, premium, FDIC assessment,
capital adequacy or similar requirement is or shall be applicable,
imposed or modified in respect of any Letters of Credit issued by the
Issuing Lender or participations therein purchased by any Lender; or
(iii) there shall be imposed on the Issuing Lender or any Lender any
other condition regarding this subsection 2.7, any Letter of Credit or
any participation therein;
and the result of the foregoing is to directly or indirectly increase the
cost to the Issuing Lender or any Lender of, making or maintaining any Letter
of Credit or of purchasing or maintaining any participation therein, or to
reduce the amount receivable in respect thereof by the Issuing Lender or any
Lender, then and in any such case the Issuing Lender or such Lender may, at
any time within a reasonable period after the additional cost is incurred or
the amount received is reduced, notify Company and Agent, and Company shall
pay within five Business Days of the date of such notice such amounts as the
Issuing Lender or such Lender may specify to be necessary to compensate the
Issuing Lender or such Lender for such additional cost or reduced receipt,
together with interest on such amount from the date demanded until payment in
full thereof at a rate equal at all times to the Base Rate PLUS 3.00% per
annum but in no event in excess of the Highest Lawful Rate. The
determination by the Issuing Lender or any Lender, as the case may be, of any
amount due pursuant to this subsection 2.7G as set forth in a certificate
setting forth the calculation thereof in reasonable detail, shall, in the
absence of manifest error, be final and conclusive and binding on all of the
parties hereto.
Company shall not be required to pay any amounts pursuant to this
subsection 2.7G to or on behalf of any Foreign Lender unless such Foreign
Lender has provided to Company either a Certificate of Exemption or a Letter
of Non-Exemption.
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H. INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES. IN ADDITION TO
AMOUNTS PAYABLE AS ELSEWHERE PROVIDED IN THIS SUBSECTION 2.7, COMPANY HEREBY
AGREES TO PROTECT, INDEMNIFY, PAY AND SAVE HARMLESS THE ISSUING LENDER FROM
AND AGAINST ANY AND ALL CLAIMS, DEMANDS, DAMAGES AND LOSSES OF, AND
LIABILITIES TO, THIRD PARTIES TO WHICH THE ISSUING LENDER MAY BE SUBJECT, AND
ALL REASONABLE OUT-OF-POCKET COSTS, CHARGES AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES) RELATING THERETO WHICH THE ISSUING LENDER MAY
INCUR OR BE SUBJECT TO AS A CONSEQUENCE, DIRECT OR INDIRECT, OF (i) THE
ISSUANCE OF ANY LETTER OF CREDIT, OTHER THAN AS A RESULT OF FRAUD, GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ISSUING LENDER OR THE ISSUING LENDER
FAILING TO USE REASONABLE CARE TO DETERMINE THAT THE DOCUMENTS AND
CERTIFICATES REQUIRED TO BE DELIVERED UNDER SUCH LETTER OF CREDIT HAD BEEN
DELIVERED AND THAT THEY COMPLIED ON THEIR FACE WITH THE REQUIREMENTS OF THAT
LETTER OF CREDIT (AS DETERMINED BY A COURT OF COMPETENT JURISDICTION) OR (ii)
THE FAILURE OF THE ISSUING LENDER TO HONOR A DRAWING UNDER ANY LETTER OF
CREDIT AS A RESULT OF ANY ACT OR OMISSION, WHETHER RIGHTFUL OR WRONGFUL, OF
ANY PRESENT OR FUTURE DE JURE OR DE FACTO GOVERNMENT OR GOVERNMENTAL
AUTHORITY (ALL SUCH ACTS OR OMISSIONS HEREIN CALLED "GOVERNMENT ACTS"). EACH
LENDER, PROPORTIONATELY TO ITS PRO RATA SHARE OF THE REVOLVING CREDIT
COMMITMENTS, SEVERALLY AGREES TO INDEMNIFY ISSUING LENDER TO THE EXTENT
ISSUING LENDER SHALL NOT HAVE BEEN REIMBURSED BY HOLDING OR ITS SUBSIDIARIES,
FOR AND AGAINST ANY OF THE FOREGOING CLAIMS, DEMANDS, LIABILITIES, DAMAGES,
LOSSES, COSTS, CHARGES AND EXPENSES TO WHICH ISSUING LENDER IS ENTITLED TO
REIMBURSEMENT FROM HOLDING OR ITS SUBSIDIARIES, EXCLUDING THOSE ARISING AS A
RESULT OF THE FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ISSUING LENDER
AS DETERMINED BY A COURT OF COMPETENT JURISDICTION.
As between Company and the Issuing Lender, Company assumes all risks of
the acts and omissions of, or misuse of the Letters of Credit issued by the
Issuing Lender by, the respective beneficiaries of such Letters of Credit.
In furtherance and not in limitation of the foregoing, the Issuing Lender
shall not be responsible (absent fraud, gross negligence or willful
misconduct (as determined by a court of competent jurisdiction) and PROVIDED
that the Issuing Lender shall use reasonable care to determine that the
documents and certificates required to be delivered under such Letter of
Credit have been delivered and that they comply on their face with the
requirements of that Letter of Credit): (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted
by any party in connection with the application for and issuance of such
Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (iii) for failure of the
beneficiary of any such Letter of Credit to comply fully with conditions
required in order to draw upon such Letter of Credit; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) for errors in interpretation of technical terms; (vi) for
any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under any such Letter of Credit or of the proceeds
thereof; (vii) for the misapplication by the beneficiary of any such Letter
of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of the
Issuing Lender, including, without limitation, any Government Acts.
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In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender under or in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith and absent fraud,
gross negligence or willful misconduct of the Issuing Lender (as determined
by a court of competent jurisdiction), shall not put the Issuing Lender under
any resulting liability to Company; PROVIDED that, notwithstanding the
foregoing, the Issuing Lender shall use reasonable care to determine that the
documents and certificates required to be delivered under any such Letter of
Credit have been delivered and that they comply on their face with the
requirements of that Letter of Credit.
Notwithstanding anything to the contrary contained in this subsection
2.7H, Company shall have no obligation to indemnify the Issuing Lender in
respect of any claims, demands, liabilities, damages, losses, costs, charges
or expenses to which the Issuing Lender may incur or be subject, to the
extent they arise out of the fraud, gross negligence or willful misconduct of
the Issuing Lender as determined by a court of competent jurisdiction, or out
of the wrongful dishonor by the Issuing Lender of a proper demand for payment
made under the Letters of Credit, or out of the failure of the Issuing Lender
to use reasonable care to determine that the documents and certificates
required to be delivered under any Letter of Credit have been delivered and
that they comply on their face with the requirements of that Letter of Credit.
For purposes of this subsection 2.7H, the term "Issuing Lender" means
the Issuing Lender and any Lender purchasing a participation in any Letter of
Credit pursuant to subsection 2.7D.
I. COMPUTATION OF INTEREST AND FEES. Subject to subsection 10.18,
interest and fees payable pursuant to this subsection 2.7 shall be computed
on the basis of a 360-day year and the actual number of days elapsed in the
period during which it accrues.
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2.8 Tax Certificates.
Each Lender that becomes a Lender pursuant to the proviso in the
definition of Lender shall deliver to each of Company and Agent either (1) a
letter or other written certification stating that it is organized under the
laws of the United States of America or a state thereof (referred to in this
subsection 2.8 as a "LETTER OF DOMESTIC ORGANIZATION") or (2) if it is not a
"United States person" within the meaning of Section 7701(a)(30) of the
Internal Revenue Code of 1986, as amended (referred to in this subsection 2.8
as a "FOREIGN LENDER") (x) two properly completed and executed copies of
United States Internal Revenue Service Form 4224 or Form 1001 or other
successor applicable form, certificate or document prescribed by the Internal
Revenue Service of the United States certifying as to such Foreign Lender's
entitlement to an exemption from or reduced rate of United States withholding
under an applicable statute or tax treaty with respect to payments to be made
to such Foreign Lender hereunder (referred to in this subsection 2.8 as a
"CERTIFICATE OF EXEMPTION") or (y) a letter from such Foreign Lender stating
that it is not entitled to any such exemption or reduced rate (referred to in
this subsection 2.8 as a "LETTER OF NON-EXEMPTION") on the date such Lender
becomes a Lender and each Lender shall provide additional Letters of Domestic
Organization, Certificates of Exemption or Letters of Non-Exemption from time
to time thereafter if requested by Company or Agent or required because, as a
result of a change in law, or a change in circumstances, the expiration of a
previously delivered letter or certificate, or otherwise, a previously
delivered letter or certificate becomes incomplete, incorrect or ineffective
in any material respect; PROVIDED, HOWEVER, that each initial Lender
executing this Agreement certifies that it (1) is organized under the laws of
the United States of America or a state thereof and such certification
constitutes such Lender's Letter of Domestic Organization for purposes of
this subsection 2.8 or (2) has delivered a Certificate of Exemption in
connection with the Original Credit Agreement. Unless Company and Agent have
received from each Lender that becomes a Lender pursuant to the proviso in
the definition of Lender a Certificate of Exemption or Letter of Domestic
Organization when and as required pursuant to the preceding sentence, the
accuracy of which shall be reasonably satisfactory to Company and Agent,
Company and Agent shall be entitled to withhold taxes from all payments to
such Lender at the statutory rate applicable to amounts to be paid hereunder
to such Lender. If Company and Agent have received from any Foreign Lender a
Certificate of Exemption pursuant to the Original Credit Agreement or when
and as required by this subsection 2.8, the accuracy of which shall be
reasonably satisfactory to Company and Agent, certifying as to such Foreign
Lender's entitlement to a reduced rate of withholding tax, Company and Agent
shall withhold taxes from all payments to such Foreign Lender at the rate
specified in such certificate. For the avoidance of doubt, any reference to
any Lender in this subsection 2.8 shall be deemed to refer to and include any
Issuing Lender.
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SECTION 3. CONDITIONS TO REVOLVING CREDIT LOANS AND LETTERS OF CREDIT
3.1 Conditions to Initial Revolving Credit Loans and Letters of Credit
The obligations of Lenders to make the initial Revolving Credit Loans,
and of any Issuing Lender to issue Letters of Credit on the Closing Date are,
in addition to the conditions precedent specified in subsections 3.2 and 3.3,
as applicable, subject to prior or concurrent satisfaction of the following
conditions:
A. HOLDING DOCUMENTS. On or before the Closing Date, Holding shall
deliver to Lenders (or to Agent for Lenders with sufficient originally
executed copies for each Lender):
1. Certified copies of any amendment to its Certificate of
Incorporation since October 15, 1996, together with good standing
certificates from the Secretary of State of the States of Delaware and
each of its principal places of business, each to be dated a recent date
prior to the Closing Date;
2. Copies of any amendments to its Bylaws since October 15, 1996,
certified as of the Closing Date by its corporate secretary or an
assistant Secretary;
3. Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement
and the other Domestic Loan Documents to be executed in connection with
this Agreement to which it is a party, and approving and authorizing any
documents, instruments or certificates to be executed by it in
connection with this Agreement and the other Domestic Loan Documents to
be executed in connection with this Agreement to which it is a party,
all in form and substance reasonably satisfactory to Agent and its
counsel, each certified as of the Closing Date by its corporate
secretary or an assistant secretary as being in full force and effect;
4. Signature and incumbency certificates, dated the Closing Date,
of its officers executing this Agreement, the Domestic Loan Documents to
be executed in connection with this Agreement to which it is a party and
any documents, instruments or certificates to be executed by it in
connection therewith;
5. Copies of this Agreement and the other Domestic Loan Documents
to be executed in connection with this Agreement to which it is a party,
executed by it;
6. A certificate in form and substance reasonably satisfactory to
Requisite Lenders stating that as of the Closing Date, Holding, Company
and the Subsidiaries taken as a whole are Solvent;
7. Copies of any other instruments, documents and certificates
required to be executed by it in connection with the execution of this
Agreement and the other Domestic Loan Documents to be executed in
connection with this Agreement, so executed; and
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8. Such other documents as Agent or Requisite Lenders may
reasonably request.
B. COMPANY DOCUMENTS. On or before the Closing Date, Company shall
deliver to Lenders (or to Agent for Lenders with sufficiently originally
executed copies for each Lender):
1. Certified copies of any amendments to its Certificate of
Incorporation since October 15, 1996, together with good standing
certificates from the Secretary of State of the States of Delaware and
each of its principal places of business, each to be dated as of a
recent date prior to the Closing Date;
2. Copies of any amendments to its Bylaws since October 15, 1996,
certified as of the Closing Date by its corporate Secretary or an
assistant Secretary;
3. Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement
and the other Domestic Loan Documents to be executed in connection with
this Agreement to which it is a party and approving and authorizing any
documents, instruments or certificates required to be executed by it in
connection with this Agreement and the other Domestic Loan Documents to
be executed in connection with this Agreement to which it is a party,
all in form and substance reasonably satisfactory to Agent and its
counsel, all certified as of the Closing Date by its corporate secretary
or an assistant secretary as being in full force and effect;
4. Signature and incumbency certificates, dated the Closing Date,
of its officers executing this Agreement and the other Domestic Loan
Documents to be executed in connection with this Agreement to which it
is a party and any documents, instruments or certificates to be
delivered in connection therewith;
5. Copies of this Agreement and the other Domestic Loan Documents
to be executed in connection with this Agreement to which it is a party,
executed by it;
6. Copies of any other instruments, documents and certificates
required to be executed by it in connection with the execution of this
Agreement and the other Domestic Loan Documents to be executed in
connection with this Agreement, so executed; and
7. Such other documents as Agent or Requisite Lenders may
reasonably request.
C. SUBSIDIARY DOCUMENTS. On or before the Closing Date, each
Subsidiary that is a party to a Loan Document shall deliver to Lenders (or to
Agent for Lenders with sufficiently originally executed copies for each
Lender):
1. Copies of its Certificate of Incorporation or Articles of
Incorporation, as applicable, together with good standing certificates
from the Secretary of State of the States of its incorporation and each
of its principal places of business, each to be dated as of a recent
date prior to the Closing Date;
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2. Copies of its Bylaws, certified as of the Closing Date by its
corporate secretary or an assistant secretary;
3. Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of the Domestic Loan
Documents to be executed in connection with this Agreement to which it
is a party and approving and authorizing any documents, instruments or
certificates required to be executed by it in connection with this
Agreement and the other Domestic Loan Documents to be executed in
connection with this Agreement to which it is a party, all in form and
substance satisfactory to Agent and its counsel, all certified as of the
Closing Date by its corporate secretary or an assistant secretary as
being in full force and effect;
4. Signature and incumbency certificates, dated the Closing Date,
of its officers executing the Domestic Loan Documents to be executed in
connection with this Agreement to which it is a party and any documents,
instruments or certificates to be delivered in connection therewith;
5. Copies of the Domestic Loan Documents to be executed in
connection with this Agreement to which it is a party, executed by it;
6. Copies of any other instruments, documents and certificates
required to be executed by it in connection with the execution of the
Domestic Loan Documents to be executed in connection with this
Agreement, so executed; and
7. Such other documents as Agent may reasonably request.
D. EUROCURRENCY CREDIT AGREEMENTS. On or before the Closing Date, all
amendments and/or supplements to the Eurocurrency Credit Agreements and to
the Eurocurrency Loan Documents, if any, shall have been executed.
E. PERFECTION OF SECURITY INTERESTS AND STOCK CERTIFICATES.
Collateral Agent shall have a valid and perfected first priority security
interest in the entire Collateral to the extent granted by the Collateral
Documents (other than deposit accounts), subject to the Liens, if any,
permitted under subsection 6.2, including without limitation, the remaining
shares of Pelikan Scotland and Produktions (exclusive of nominal directors'
qualifying shares) PLUS a mortgage upon the Bardstown, Kentucky property, all
upon terms satisfactory to Agent.
F. NECESSARY CONSENTS. On or before the Closing Date, each of
Holding, Company and each Subsidiary executing a Domestic Loan Document shall
have obtained all consents to the transactions contemplated under this
Agreement and the other Domestic Loan Documents of any Person required under
any Contractual Obligation of Holding, Company or such Subsidiary, as the
case may be, all of the foregoing in form and substance reasonably
satisfactory to Agent, except for any such consents the failure of which to
be obtained, individually and in the aggregate, would not reasonably be
expected to have a material adverse effect on the business or financial
condition of
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Holding and its Subsidiaries, taken as a whole, or on the ability of Holding,
Company or any such Subsidiary to perform its obligations under this
Agreement and the other Domestic Loan Documents.
G. REPRESENTATIONS OF HOLDING AND COMPANY. Each of Holding and
Company shall have delivered to Agent an Officers' Certificate in form and
substance reasonably satisfactory to Agent to the effect that (i) the
representations and warranties in Section 4 hereof pertaining to such Person
are true and correct in all material respects on and as of the Closing Date
to the same extent as though made on and as of that date, (ii) except for the
decline in European sales heretofore disclosed to Lenders, since March 31,
1997 through the Closing Date, there has been no change in the business,
operations, properties, assets, business prospects or condition (financial or
otherwise) of Holding and its Subsidiaries, which has been or could
reasonably be expected to be materially adverse to Holding and its
Subsidiaries, taken as a whole, (iii) no Event of Default or Potential Event
of Default shall have occurred and be continuing or will result from the
transactions contemplated to occur hereunder on the Closing Date and (iv)
Holding and Company shall have performed in all material respects all
agreements which this Agreement provides shall be performed on or before the
Closing Date.
H. SATISFACTION OF CONDITIONS TO FUNDING. All conditions precedent to
Revolving Credit Loans described in subsection 3.2B shall be satisfied on and
as of the Closing Date with respect to the Revolving Credit Loans to be made
on such date.
I. PERFORMANCE OF AGREEMENTS. Each of Holding, Company and each
Subsidiary entering into a Domestic Loan Document to be executed in
connection with this Agreement shall have performed in all material respects
all agreements which this Agreement provides shall be performed on or before
the Closing Date except as otherwise disclosed to and agreed to in writing by
Agent.
J. PAYMENT OF FEES AND EXPENSES. On or before the Closing Date,
Company shall have paid or cause to have been paid (i) to Agent for
distribution (as appropriate) to Lenders and Agent, the fees payable on the
Closing Date referred to in subsection 2.3, and (ii) to such Persons, all
costs and expenses incurred by any Lender (in an amount not to exceed $10,000
for any single Lender) or Agent, including costs and fees of counsel to any
Lender or Agent and other professional fees and expenses incurred in
connection with the preparation, negotiation, review and execution of this
Agreement and the other Loan Documents.
K. OPINIONS FROM COUNSEL. Lenders and their respective counsel shall
have received originally executed copies of one or more favorable written
opinions of counsel for Holding, Company and the Subsidiaries, in form and
substance reasonably satisfactory to Agent and its counsel, dated as of the
Closing Date, and setting forth substantially the matters in the opinions
designated in EXHIBIT III annexed hereto and as to such other matters as
Agent may reasonably request.
L. OPINIONS FROM COUNSEL TO AGENT. Lenders shall have received an
originally executed copy of one or more favorable written opinions of
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., counsel to Agent, dated as of the Closing
Date, addressed to Agent and substantially in the form of EXHIBIT IV annexed
hereto and as to such other matters as Agent may reasonably request.
M. OTHER CORPORATE ACTIONS. On or before the Closing Date, all
corporate and other
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proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Agent, acting on behalf of Lenders, and its counsel shall be
reasonably satisfactory in form and substance to Agent and such counsel, and
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Agent may reasonably request.
N. ACKNOWLEDGEMENT. Agent shall have received the Acknowledgement,
duly executed by each of Holding, Company, ICMI, Nu-kote Imperial, Nu-kote
Imaging, and Future Graphics.
O. ANNUAL AUDIT. Agent shall have received the annual audited
financial statements of Holding and the Subsidiaries for the year ended March
31, 1997, accompanied by a report thereon of Coopers & Xxxxxxx which report
shall be unqualified as to going concern and scope of audit and shall state
that such consolidated financial statements present fairly, in all material
respects, the financial position of Holding and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP and the audit by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards.
P. WARRANT AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT. Lenders
shall have received the Warrant Agreement and the Registration Rights
Agreement duly executed by Holding, and all terms and conditions to the
effectiveness thereof shall have been satisfied.
3.2 Conditions to All Revolving Credit Loans
The obligations of Agent and Lenders to make all Revolving Credit Loans
on each Funding Date (including, without limitation, the making of the
Revolving Credit Loans on the Closing Date) are subject to the following
further conditions precedent:
A. NOTICE OF BORROWING. Agent shall have received, in accordance with
the provisions of subsection 2.1B, before that Funding Date, an originally
executed Notice of Borrowing in each case signed by the Chief Executive
Officer, the President, the Chief Financial Officer, the Chief Operating
Officer, the Corporate Controller or the Treasurer of Company, or by any
officer of Company designated by any of the above-described officers on
behalf of Company in writing delivered to Agent.
B. CONDITIONS TO FUNDING. As of that Funding Date:
1. The representations and warranties contained herein shall be
true and correct in all material respects on and as of that Funding Date
to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall
have been true and correct in all material respects on and as of such
earlier date;
2. No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute (a) an Event of Default or (b) a
Potential Event of Default;
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3. Holding and its Subsidiaries shall have in all material
respects performed all agreements and satisfied all conditions which
this Agreement provides shall be performed or satisfied by them on or
before that Funding Date;
4. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making such Revolving Credit Loan; and
5. There shall not be pending or, to the knowledge of Holding or
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holding or Company or
any property of Holding or Company, that has not been disclosed by
Holding or Company in writing pursuant to subsection 4.6 or 5.1(ii)
prior to the making of such Revolving Credit Loan (or, in the case of
the initial Revolving Credit Loans, prior to the Closing Date) and there
shall have occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so
disclosed, that, in either event, would reasonably be expected to either
(i) materially and adversely affect the business, operations,
properties, assets or condition (financial or otherwise) of Holding and
its Subsidiaries taken as a whole, or the prospects of Holding and its
Subsidiaries taken as a whole or (ii) materially and adversely impair
the ability of Holding or any of its Subsidiaries to perform or of
Lenders to enforce the Obligations other than, in either case, those
matters that are adequately covered by insurance or for which
indemnification to Holding and its Subsidiaries reasonably satisfactory
to Agent has been provided. No injunction or other restraining order
shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or otherwise prevent
the consummation of, or to recover any damages or obtain relief as a
result of, this Agreement or the making of Revolving Credit Loans
hereunder.
3.3 Conditions to Letters of Credit
The obligation of any Issuing Lender to issue or extend any Letter of
Credit hereunder is subject to prior or concurrent satisfaction of all of the
following conditions:
A. On or before the date of issuance of such Letter of Credit, the
Issuing Lender with respect thereto shall have received, in accordance with
the provisions of subsection 2.7B, a notice requesting the issuance of such
Letter of Credit and all other information specified in subsection 2.7B, and
such other documents as such Issuing Lender may reasonably require in
connection with the issuance of such Letter of Credit.
B. On the date of issuance or extension of such Letter of Credit, all
conditions precedent described in subsection 3.2B shall be satisfied to the
same extent as though the issuance or extension of such Letter of Credit were
the making of a Revolving Credit Loan and the date of issuance or extension
of such Letter of Credit were a Funding Date.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
This Section 4 shall not be effective or in full force and effect until the
Closing Date. In order to induce Agent and Lenders to enter into this
Agreement, Holding and Company severally represent and warrant to Agent and each
Lender that the following statements are true and correct:
4.1 Organization, Powers, Good Standing, Business and Subsidiaries
A. ORGANIZATION AND POWERS. Each of Holding, Company and each Subsidiary
is a corporation duly organized and validly existing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into each Loan Document to
which it is a party, and to carry out the transactions contemplated thereby.
B. GOOD STANDING. Each of Holding, Company and each Subsidiary is in
good standing as a qualified foreign corporation wherever necessary to carry on
its present business and operations, except in jurisdictions in which the
failure to be in good standing has not had and could not reasonably be expected
to have a material adverse effect on Holding and its Subsidiaries taken as a
whole.
C. SUBSIDIARIES. All of the Subsidiaries of Holding, as of the Closing
Date, are identified in SCHEDULE 4.1-C annexed hereto. SCHEDULE 4.1-C correctly
sets forth the ownership interest as of the Closing Date of Holding in each of
its Subsidiaries. All of the Subsidiaries of Company, as of the Closing Date,
are identified as such in SCHEDULE 4.1-C annexed hereto. All of the
Subsidiaries of Holding identified on SCHEDULE 5.13-B hereto are dormant, do not
conduct business, and on the Closing Date own total assets with an aggregate
value less than $2,000,000 and an aggregate value (net of liabilities) less than
zero.
4.2 Authorization of Borrowing, etc.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents and the transactions contemplated thereby have been duly
authorized, as appropriate, by all necessary corporate action by Holding,
Company and the Subsidiaries.
B. NO CONFLICT. The execution, delivery and performance by Holding,
Company and the Subsidiaries of the Loan Documents to which each such Person is
a party and the consummation of the transactions contemplated thereby do not and
will not (i) violate any provision of law applicable to Holding, Company or any
Subsidiary, the Certificate of Incorporation or Bylaws (or equivalent documents)
of Holding, Company or any Subsidiary, or any order, judgment or decree of any
court or other agency of government, domestic or foreign, binding on Holding,
Company or any Subsidiary, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Holding, Company or any Subsidiary, (iii) pursuant to
any such Contractual Obligation, result in or require the creation or imposition
of any Lien upon any of the properties or assets of Holding, Company or any
Subsidiary (other than Liens in favor of (a) the Collateral Agent for the
benefit of Lenders and the Eurocurrency Lenders or (b) any Person as agent or
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trustee for the benefit of any Eurocurrency Lender and any Liens permitted by
subsection 6.2 or pursuant to the terms of any Eurocurrency Loan Document), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Holding, Company or any Subsidiary,
except for such approvals or consents which will be obtained on or before the
Closing Date and disclosed in writing to Lenders or which might be required in
connection with any security interest in deposit accounts, and except in the
cases of the foregoing clauses (i), (ii), (iii) and (iv) for any such
violations, conflicts, breaches and defaults the existence of which, and any
such approvals and consents the failure of which to be obtained, individually
and in the aggregate, would not reasonably be expected to have a material
adverse effect on the business or financial condition of Holding and its
Subsidiaries, taken as a whole, or on the ability of Holding, Company and the
Subsidiaries to perform their respective obligations under the Loan Documents.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
each of Holding, Company and each Subsidiary of the Loan Documents to which it
is a party and the consummation of the transactions contemplated hereby and
thereby do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any Federal, state or other
governmental authority or regulatory body, domestic or foreign, except for
(y) filings, registrations, consents, approvals, notices or other actions
required in connection with the granting or perfection of security interests
granted pursuant to the Loan Documents, and (z) other registrations, consents,
approvals, notices and actions that have been or will be obtained or taken on or
before the Closing Date.
D. BINDING OBLIGATION. The Loan Documents are the legally valid and
binding obligations of Holding, Company and the Subsidiaries, as their interests
and obligations appear herein and therein, enforceable against Holding, Company
and the Subsidiaries in accordance with their respective terms, except (i) as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability, (ii) for limitations on enforceability of
any Loan Document to the extent it grants or purports to grant any security
interest in deposit accounts or rights of set-off or other equitable rights of
combination and (iii) for limitations on enforceability of rights to
indemnification under federal securities or other laws or regulations or public
policy.
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4.3 Financial Condition
The audited consolidated balance sheets of Holding and its Subsidiaries as
at March 31, 1997, and the related consolidated statements of operations, cash
flows and changes in stockholders' equity of Holding and its Subsidiaries for
the Fiscal Year then ended to be delivered prior to the effectiveness of this
Agreement and the unaudited consolidated balance sheet of Holding and its
Subsidiaries as at May 23, 1997, and the related statements of operations and
cash flows for the two months then ended, were prepared in conformity with GAAP
and fairly present, in all material respects, the consolidated financial
position of Holding and its Subsidiaries as at the date thereof and the
consolidated results of operations and cash flows of Holding and its
Subsidiaries for each of the periods covered thereby subject, in the case of
such May 23, 1997, financial statements, to changes resulting from audit and
normal year-end adjustments and the absence of notes and such financial
statements may be only substantially in conformity with GAAP. At March 31,
1997, neither Holding nor any of its Subsidiaries had any material
(i) Contingent Obligation, (ii) contingent liability or liability for taxes,
(iii) long-term lease or (iv) unusual forward or long-term commitment out of the
ordinary course of business, that is not reflected in such financial statements
or in the notes thereto.
4.4 No Material Adverse Change; No Stock Payments
Except for the decline in European sales heretofore disclosed to Lenders,
since March 31, 1997, there has been no change in the business, operations,
properties, assets or condition (financial or otherwise) of Holding and its
Subsidiaries, which has been or could reasonably be expected to be materially
adverse to Holding and its Subsidiaries, taken as a whole. Neither Holding,
Company nor any Subsidiary has directly or indirectly declared, ordered, paid or
made or set aside any sum or property (excluding any foreign law requirement to
maintain a statutory reserve or the like) for any Restricted Junior Payment or
agreed to do so except as permitted by subsection 6.5.
4.5 Title to Properties; Liens
Holding, Company and the Subsidiaries have good, sufficient and legal
title, subject only to Liens permitted pursuant to subsection 6.2 and the
Eurocurrency Loan Documents, to all their respective owned properties and assets
reflected in the financial statements referred to in subsection 4.3 or in the
most recent financial statements delivered pursuant to subsection 5.1 of this
Agreement or the Eurocurrency Guaranties, except for assets (i) not material to
the business of Holding and its Subsidiaries taken as a whole, or (ii) acquired
or disposed of (A) in the ordinary course of business or (B) as otherwise
permitted under this Agreement since the date of the consolidated balance sheet
contained in such financial statements. All real property leased by Holding,
Company or any of the Domestic Subsidiaries at which Inventory is located is
identified in SCHEDULE 4.5 annexed hereto.
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4.6 Litigation; Adverse Facts
Except as set forth on SCHEDULE 4.6 hereto or otherwise disclosed in
writing to Lenders and Eurocurrency Lenders prior to the Closing Date, there is
no action, suit, proceeding, governmental investigation or arbitration (whether
or not purportedly on behalf of Holding or any of its Subsidiaries) at law or in
equity or before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of Holding or any of its Subsidiaries,
threatened against or affecting Holding or any of its Subsidiaries or any
property of Holding or any of its Subsidiaries that would reasonably be expected
to result in any material adverse change in the business, prospects, operations,
properties, assets or condition (financial or otherwise) of Holding and its
Subsidiaries taken as a whole, or would materially adversely affect Holding's,
Company's or any Subsidiary's ability to perform or Lenders' ability to enforce
the Obligations or would affect Holding's, Company's or any Subsidiary's ability
to perform, or Eurocurrency Lenders' ability to enforce, the obligations owing
or to be owed under the Eurocurrency Loan Documents. As of the Closing Date,
none of Holding, Company or any Subsidiary has received any notice of
termination of any material contract, lease or other agreement or suffered any
material damage, destruction or loss (whether or not covered by insurance) or
had any employee strike, work-stoppage, slow-down or lock-out any of which
remain pending, that would or could reasonably be expected to be materially
adverse to Holding and its Subsidiaries, taken as a whole.
4.7 Payment of Taxes
Except to the extent otherwise permitted by subsection 5.3, all taxes
required to be paid by Holding, Company and each Subsidiary which are due and
payable and are material to the business, operations, properties, assets or
condition (financial or otherwise) of Holding and its Subsidiaries taken as a
whole have been paid. Neither Holding, Company nor any Subsidiary knows of any
tax assessment proposed in writing against any such Person that would be
material to the condition (financial or otherwise) of Holding and its
Subsidiaries taken as a whole, except for any such tax assessment which is being
actively contested by such Person to the extent affected thereby, in good faith
and by appropriate proceedings, and with respect to which reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
4.8 Materially Adverse Agreements; Performance of Agreements
A. Neither Holding, Company nor any Subsidiary is a party to or is
subject to any agreement or instrument materially and adversely affecting the
financial condition of Holding and its Subsidiaries, taken as a whole, except as
otherwise disclosed in writing to Lenders prior to the Closing Date.
B. Neither Holding, Company nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation of any such Person, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
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indirect, of such default or defaults or the consequences of actions curing such
default or defaults, if any, would not be reasonably expected to have a material
adverse effect on the business, properties, assets, operations or condition
(financial or otherwise) of Holding and its Subsidiaries, taken as a whole.
4.9 Governmental Regulation
Neither Holding nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940, or to any Federal
or state statute or regulation, domestic or foreign, limiting its ability to
incur Indebtedness for money borrowed or to create Liens on any of its
properties or assets to secure such Indebtedness that materially and adversely
affects its ability to perform its obligations under the Loan Documents.
4.10 Securities Activities
Neither Holding, Company or any Subsidiary is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
4.11 Employee Benefit Plans
A. Holding and each of its ERISA Affiliates is in compliance in all
material respects with any applicable provisions of the Internal Revenue Code,
ERISA and the regulations and published interpretations thereunder with respect
to all Employee Benefit Plans.
B. No Termination Event has occurred or is reasonably expected to occur
with respect to any Pension Plan which would have a material adverse effect on
the financial condition of Holding and its Subsidiaries, taken as a whole.
C. Based upon the actuarial assumptions, methods and most recent
valuation date utilized in the most recent actuarial valuation report prepared
with respect to each Pension Plan, as of such valuation date, the actuarial
present value of all benefit liabilities under all Pension Plans does not exceed
the fair market value of the assets allocable to such benefit liabilities by
more than $1,500,000. For purposes of the preceding sentence, the terms
"actuarial present value" and "benefit liabilities" shall have the meanings
specified in Section 4001 of ERISA.
D. Neither Holding nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any withdrawal liability under Title IV of ERISA to
any Multiemployer Plan which would have a material adverse effect on the
financial condition of Holding and its Subsidiaries, taken as a whole.
E. None of Holding or any Subsidiary thereof has engaged in any
"prohibited transaction," as such term is defined in Section 4975 of the
Internal Revenue Code or Section 406 of Title I of ERISA in connection with any
Pension Plan for which no exemption was available under ERISA or the Internal
Revenue Code, that resulted in a liability under ERISA or the Internal Revenue
Code which
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would have a material adverse effect on the business or financial condition of
Holding and its Subsidiaries, taken as a whole.
F. Other than the post-retirement medical plan sponsored by Holding
covering certain employees who were employees prior to January 1987, employment
or supplemented employment agreements with three executive officers of Holding
and Company, the regular severance and vacation policies of Holding and its
Subsidiaries, certain key-man insurance policies and information (including
information disclosed pursuant to FAS 106) as to which has been disclosed in the
most recent financial statements of Holding and its Subsidiaries, none of
Holding or any Subsidiary thereof maintains or has maintained any welfare
benefit plan within the meaning of Section 3(1) of ERISA which provides for
continuing benefits or coverage for any participant or any beneficiary of a
participant after such participant's termination of employment except as may be
required by Part 6 of Title I of ERISA and the regulations thereunder or except
as to plans with respect to which such participant or beneficiary pays his or
her allocable share of the premium or other material costs of providing benefits
or coverage under such plan.
4.12 Disclosure
No representation or warranty of Holding, Company or any Subsidiary
contained in any Loan Document or any other document, certificate or written
statement furnished to Lenders by or on behalf of Company for use in connection
with the transactions contemplated by the Loan Documents contains any untrue
statement of a material fact or omits to state a material fact (known to
Holding, Company or any Subsidiary in the case of any document not furnished by
it) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made as of the
time the same were made. Since March 31, 1997, there is no fact known to
Holding, Company or any Subsidiary (other than matters of a general economic,
political or social nature) that materially and adversely affects the business,
operations, property, assets or condition (financial or otherwise) of Holding
and its Subsidiaries, taken as a whole, that has not been disclosed herein or in
other documents, certificates and written statements furnished to Lenders and
Eurocurrency Lenders from time to time for use in connection with the
transactions contemplated by the Loan Documents.
4.13 Licenses, Permits and Authorizations
Holding, Company and each Subsidiary has all approvals, licenses or other
permits of all governmental or regulatory agencies, whether Federal, state or
local, the absence of which would or could reasonably be expected to be
materially adverse to Holding and its Subsidiaries taken as a whole.
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4.14 Intangible Property
Holding, Company and each Subsidiary owns or possesses licenses or other
rights to use all trade names, unregistered trademarks and service marks, brand
names, patents, registered and unregistered copyrights, registered trademarks
and service marks, and all applications for any of the foregoing, and all
permits, grants and licenses or other rights with respect thereto, in each case
used in the operation of its and their businesses in the manner in which they
are currently being conducted, the absence of which would be reasonably expected
to materially adversely affect the business, operations, assets or financial
condition of Holding and its Subsidiaries taken as a whole ("MATERIAL
INTELLECTUAL PROPERTY"). SCHEDULE 4.14 sets forth a true and complete list of
all service xxxx and trademark registrations and applications for registration
of Holding and its Subsidiaries included in the Material Intellectual Property
as of the date of this Agreement. Except as set forth on SCHEDULE 4.6 or
otherwise disclosed in writing to Lenders prior to the Closing Date, to the
knowledge of Holding and Company as of such date, no claim of infringement
materially adverse to the business, operations, or financial condition of
Holding and its Subsidiaries taken as a whole is currently being asserted by any
other Person to the use by Holding or any of its Subsidiaries of any Material
Intellectual Property, and neither Holding, Company nor any of its Subsidiaries
has been notified or advised of any such claim.
4.15 Environmental Matters
Except as disclosed in writing to Lenders prior to the Closing Date,
including disclosure in Holding's Annual Report on Form 10-K for the fiscal year
ended March 31, 1997:
(i) the operations of Holding, Company and each Subsidiary
(including, without limitation, all operations and conditions at or in the
Facilities) comply in all material respects with all applicable
Environmental Laws;
(ii) Holding, Company and each Subsidiary have obtained all material
environmental, health and safety permits necessary to their respective
operations, and all such permits are in good standing, and Holding, Company
and each Subsidiary are in compliance with all material terms and
conditions of such permits;
(iii) neither Holding, Company nor any Subsidiary has received any
Environmental Claim that would reasonably be expected to have a material
adverse effect on the business or financial condition of Holding and its
Subsidiaries, taken as a whole;
(iv) none of the operations of Holding, Company or any Subsidiary is
the subject of any pending judicial or administrative proceeding alleging
the violation of or liability under any Environmental Laws which would
reasonably be expected to have a material adverse effect on the business or
financial condition of Holding and its Subsidiaries, taken as a whole;
(v) Holding, Company and each Subsidiary and all of their present
Facilities or operations, as well as their past Facilities or operations,
are not subject to any outstanding written order or agreement with any
governmental authority or private party respecting (A) any
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Environmental Laws or (B) any Environmental Claims that would reasonably be
expected to have a material adverse effect on the business or financial
condition of Holding and its Subsidiaries, taken as a whole;
(vi) neither Holding, Company nor any Subsidiary has any Contingent
Obligation in connection with any Release of any Hazardous Materials by
Holding, Company or any Subsidiary that would reasonably be expected to
have a material adverse effect on the business or financial condition of
Holding and its Subsidiaries, taken as a whole;
(vii) neither Holding, Company nor any Subsidiary nor, as of the
Closing Date and to the knowledge of Holding and Company as of such date,
any predecessor of Holding, Company or Subsidiary has filed any notice
under any Environmental Law indicating past or present treatment, storage,
or disposal of Hazardous Materials at any Facility except as a lawful
incident of its business operation; none of Holding's or any of its
Subsidiary's operations involves the generation, transportation, treatment
or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or
any state equivalent except as a lawful incident of its business operation;
and neither Holding, Company nor any Subsidiary nor, as of the Closing Date
and to the knowledge of Holding and Company as of such date, any
predecessor in title to any of them nor, as of the Closing Date and to the
knowledge of Holding and Company as of such date, has any third party at
any time occupying any Facilities at any time used, generated, disposed of,
stored, transported to or from or released any Hazardous Materials, from,
under or effecting such Facility except as a lawful incident of its
business operation, which generation, transportation, treatment, storage,
use, disposal or release in any of the foregoing cases would reasonably be
expected to have a material adverse effect on the business or financial
condition of Holding and its Subsidiaries, taken as a whole;
(viii) no Hazardous Materials exist on, under or about any Facility in a
manner that would reasonably be expected to give rise to an Environmental
Claim having a material adverse effect on the business or financial
condition of Holding and its Subsidiaries taken as a whole, and neither
Holding, Company nor any Subsidiary has filed any notice or report of a
Release of any Hazardous Materials that would reasonably be expected give
rise to an Environmental Claim having a material adverse effect on the
business or financial condition of Holding and its Subsidiaries taken as a
whole;
(ix) as of the Closing Date and to the knowledge of Holding and
Company as of such date, no underground storage tanks or surface
impoundments are on or at the Facilities; and
(x) no Lien in favor of any governmental authority for (A) any
liability under Environmental Laws, or (B) damages arising from or costs
incurred by such governmental authority in response to a Release has been
filed or attached to the Facilities, which liability, damages or costs
would reasonably be expected to have a material adverse effect on the
business or financial condition of Holding and Subsidiaries, taken as a
whole.
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SECTION 5. AFFIRMATIVE COVENANTS
Holding and Company severally covenant and agree that, on and after the
Closing Date, so long as the Revolving Credit Commitments hereunder shall be in
effect and until payment in full of all of the Revolving Credit Loans and all
other amounts owing hereunder, unless Requisite Lenders shall otherwise give
prior written consent, such Person shall perform all covenants in this Section 5
to be performed by it (including, in the case of Company, covenants applicable
to it in its capacity as a Subsidiary of Holding) and cause each of its
Subsidiaries to comply with all covenants in this Section 5 applicable to such
Subsidiary.
5.1 Financial Statements and Other Reports
Holding will maintain, or cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Lenders and Eurocurrency Lenders:
(i) as soon as practicable and in any event within 45 days after the
end of each of the first three fiscal quarters in each Fiscal Year
(including the fiscal quarter ended June 27, 1997), (a) management's
discussion and analysis of financial condition and results of operations
contained in Holding's Quarterly Report on Form 10-Q for such fiscal
quarter, or a written discussion and analysis in form and detail
substantially similar thereto and (b) consolidated balance sheets of
Holding and its Subsidiaries as at the end of such period and the related
consolidated statements of income, stockholders' equity and cash flow of
Holding and its Subsidiaries for such fiscal quarter and setting forth in
each case in comparative form the consolidated figures for the
corresponding periods of the previous Fiscal Year (all of said financial
statements set forth in this clause (b) shall also include consolidating
financial information with respect to the Subsidiaries), all in reasonable
detail and certified by the Chief Financial Officer, Corporate Controller
or Treasurer of Holding that they fairly present, in all material respects,
the financial condition of Holding and its Subsidiaries as at the dates
indicated and the results of their operations and cash flows for the
periods indicated, subject to changes resulting from audit and normal year-
end adjustments, and except that such financial statements need not contain
notes and shall be prepared substantially in conformity with GAAP;
(ii) as soon as practicable and in any event within 90 days after the
end of each Fiscal Year, to the extent not included in management's
discussion and analysis of financial condition and results of operations
contained in Holding's Annual Report on Form 10-K for such Fiscal Year,
(a) a written discussion of the financial and operating performance for the
fourth fiscal quarter of such Fiscal Year from a profit and loss, cash flow
and balance sheet standpoint and discussions of the major factors affecting
such performance, including but not limited to changes in working capital
for such fiscal quarter and consolidated balance sheets of Holding and its
Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of income (all of said financial statements set forth in this
clause (a) shall also
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include consolidating financial information with respect to the
Subsidiaries), stockholders' equity and cash flows of Holding and its
Subsidiaries for such Fiscal Year, setting forth in each case, in
comparative form the consolidated figures for the previous year, all in
reasonable detail, including the notes thereto which shall, among other
things, indicate that Holding and its Subsidiaries are in compliance with
the financial covenants contained in this Agreement, and accompanied by a
report thereon of Coopers & Xxxxxxx or such other independent certified
public accountants of recognized national standing selected by Holding as
shall be satisfactory to Agent which report shall be unqualified as to
going concern and scope of audit and shall state that such consolidated
financial statements present fairly, in all material respects, the
financial position of Holding and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP and that the audit by such
accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards and
(b) with respect to the final quarter of such Fiscal Year, the schedules
and financial information set forth in clause (b) of subsection 5.1(i),
certified by the Chief Financial Officer, Corporate Controller or
Treasurer of Holding as fairly presenting, in all material respects, the
matters set forth therein as at the dates thereof;
(iii) as soon as practicable and in any event within 45 days after
June 30, 1997, July 31, 1997, and August 31, 1997, and within 30 days after
the last day of each calendar month (including the twelfth calendar month
of each Fiscal Year) thereafter beginning with the calendar month ending
September 30, 1997, consolidated balance sheets of Holding and its
Subsidiaries as at the end of such period and the related consolidated
statements of income, stockholders' equity and cash flow of Holding and its
Subsidiaries for such month and for the Fiscal Year to date and setting
forth in each case in comparative form the consolidated figures for the
corresponding periods of the previous Fiscal Year (all of said financial
statements shall also include consolidating financial information with
respect to the Subsidiaries and shall include a comparison of such
information to budget), all in reasonable detail and certified by the Chief
Financial Officer, Corporate Controller or Treasurer of Holding that they
fairly present, in all material respects, the financial condition of
Holding and its Subsidiaries as at the dates indicated and the results of
their operations and cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, and except
that such financial statements need not contain notes and shall be prepared
substantially in conformity with GAAP;
(iv) promptly after preparation, and no later than 5:00 p.m., Dallas,
Texas Time, on the 3rd Business Day of each week, a weekly revenue flash
report and an estimate of cash and Indebtedness balances versus the prior
week's forecast, all in the form currently being provided to Price
Waterhouse LLP or such other form as may be acceptable to Requisite
Lenders, and in each case breaking out such information with respect to
North American and non-North American operations;
(v) together with each delivery of financial statements of Holding
and its Subsidiaries pursuant to subdivisions (i), (ii) and (iii) of this
subsection 5.1, (x) an Officers' Certificate of Holding stating that the
signers have reviewed the terms of this Agreement and
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the other Loan Documents and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of Holding and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as of the
date of the Officers' Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if any
such condition or event existed or exists, specifying the nature and
period of existence thereof and what action Holding has taken, is taking
and proposes to take with respect thereto; and (y) a Compliance
Certificate demonstrating in reasonable detail compliance during and at
the end of the applicable accounting periods with the restrictions
contained in this Agreement in the manner set forth in such Compliance
Certificate;
(vi) promptly upon any Executive Officer of Holding, Company or any
Subsidiary obtaining knowledge (a) that a condition or event has occurred
and is continuing that constitutes an Event of Default or Potential Event
of Default, or becoming aware that any Lender or Agent or any Eurocurrency
Lender or Eurocurrency Administrative Agent, as appropriate, has given any
notice or taken any other action with respect to a claimed Event of Default
or Potential Event of Default under any Loan Document, (b) that any Person
has given any notice to Holding, Company or any Material Subsidiary or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, (c) of any condition
or event that would be required to be disclosed in a current report filed
by Company with the Securities and Exchange Commission on Form 8-K pursuant
to Items 1, 2 or 4 of such Form as in effect on the date hereof if Company
were required to file such reports under the Exchange Act, or (d) of a
material adverse change in the business, operations, properties, assets or
condition (financial or otherwise) of Holding and its Subsidiaries taken as
a whole, or of an event or condition that would reasonably be expected to
result in such a material adverse change, an Officers' Certificate
specifying the nature and period of existence of such condition or event,
or specifying the notice given or action taken by such holder or Person and
the nature of such claimed default, Event of Default, Potential Event of
Default, event or condition, and what action Holding, or Company has taken,
is taking and proposes to take with respect thereto;
(vii) upon any officer of Holding, Company or any Subsidiary obtaining
knowledge of (a) the institution of, or non-frivolous threat in writing of,
any action, suit, proceeding, governmental investigation or arbitration
against or affecting Holding or any of its Subsidiaries or any property of
Holding, Company or any Subsidiaries not previously disclosed by Holding to
Lenders and Eurocurrency Lenders and involving potential liability of
Holding, Company or a Subsidiary for which reserves shall be required in
conformity with GAAP in excess of $250,000 in any such case, or (b) any
material development in any such action, suit, proceeding, governmental
investigation or arbitration, that, in either case, would reasonably be
expected to have a material and adverse effect on the business, operations,
properties, assets or condition (financial or otherwise) of Holding and its
Subsidiaries taken as a whole or on the prospects of Holding and its
Subsidiaries taken as a whole, Holding shall promptly give notice thereof
to Lenders and Eurocurrency Lenders and provide such other information as
may be reasonably available to it to enable Lenders and Eurocurrency
Lenders and their counsel to
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evaluate such matters;
(viii) promptly upon becoming aware that one of the following has
occurred or is about to occur: (a) Termination Event (other than a
standard termination of any Pension Plan pursuant to Section 4041(b) of
ERISA), or (b) non-exempt "prohibited transaction," as such term is defined
in Section 4975 of the Internal Revenue Code or Section 406 of ERISA in
connection with any Employee Benefit Plan or any trust created thereunder,
a written notice specifying the nature thereof, what action Holding or
Company has taken, is taking or proposes to take with respect thereto, and,
when known, any action taken or threatened by the Internal Revenue Service,
the Department of Labor, or the PBGC with respect thereto;
(ix) with reasonable promptness copies of (a) all notices received by
Holding, Company or any of their respective ERISA Affiliates of the PBGC's
intent to terminate any Pension Plan or to have a trustee appointed to
administer any Pension Plan; (b) each Schedule A (Actuarial Information) to
the annual report (Form 5500 Series) filed by Holding, Company or any of
their ERISA Affiliates with the Internal Revenue Service with respect to
each Pension Plan under which the present value of accrued benefits under
such plan exceeds the current value of the assets of such plan as of the
reporting date for such annual report; and (c) all notices received by
Holding, Company or any of their ERISA Affiliates from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA;
(x) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available
generally by Holding to its security holders or by Company or any
Subsidiary to its security holders, of all regular and periodic reports and
all registration statements and prospectuses, if any, filed by Holding,
Company or any Subsidiary with any securities exchange or with the
Securities and Exchange Commission or any governmental authority succeeding
to any of its functions, and of all press releases and other statements
made available generally by Holding, Company or any Subsidiary to the
public concerning material developments in the business of Holding and its
Subsidiaries, taken as a whole;
(xi) immediately prior to or coincident with the release thereof,
notice of all material press releases to Agent and Eurocurrency
Administrative Agent; and
(xii) with reasonable promptness, a copy of any management letter
submitted to Holding, Company or any Subsidiary by their independent
certified public accountants and such other information and data with
respect to Holding, Company or any Subsidiary as from time to time may be
reasonably requested by any Lender or Eurocurrency Lender.
5.2 Corporate Existence, etc.
Holding and Company will at all times preserve and keep in full force and
effect its respective corporate existence and all of its related rights and
franchises material to the business of Holding and its Subsidiaries, taken as a
whole, except as otherwise permitted by subsection 6.7.
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5.3 Payment of Taxes and Claims; Tax Consolidation
A. Each of Holding, Company and each Subsidiary will pay or cause to be
paid all material taxes, assessments and other governmental charges required to
be paid by it before any material penalty accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a material Lien upon any of its properties or assets, prior to the time
when any material penalty or fine shall be accrued with respect thereto;
PROVIDED that so long as no such property or asset (other than money for such
charge or claim and the interest or penalty accruing thereof) of Holding,
Company or any Subsidiary is in danger of being lost or forfeited as a result
thereof, no such tax, assessment, charge or claim need be paid if it is being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made therefor.
B. Each of Holding, Company and each Subsidiary will not file or consent
to the filing of any consolidated U.S. federal income tax return with any Person
other than (i) Holding or any of its Subsidiaries or (ii) such other Person with
whom Holding, Company or any Subsidiary has entered into a tax sharing agreement
reasonably satisfactory to Agent requiring such other Person to promptly
reimburse Holding, Company or such Subsidiary in cash for the reasonable value
of any tax benefits attributable to Holding, Company or such Subsidiary and
effectively utilized by such other Person to reduce its taxes payable.
5.4 Maintenance of Properties; Insurance; Sales of Certain Assets
Each of Holding, Company and each Subsidiary will maintain or cause to be
maintained in good repair, working order and condition (ordinary wear and tear
excepted) all material properties used in the business of such Person and from
time to time will make or cause to be made all appropriate repairs, renewals and
replacements thereof. Holding, Company and the Subsidiaries will maintain or
cause to be maintained, with financially sound and reputable insurers, insurance
with respect to their respective properties and business and the properties and
business of their respective Subsidiaries against loss or damage of the kinds
customarily insured against by corporations of established reputation engaged in
the same or similar businesses and similarly situated, of such types and in such
amounts as are customarily carried under similar circumstances by such other
corporations, including without limitation a policy covering claims with respect
to trademark and patent infringement. Each such policy of insurance shall
provide for at least thirty (30) days prior written notice to Agent of any
modification or cancellation of such policies, and all policies covering
Collateral shall name the Agent as loss payee thereof. As soon as practicable
after the Closing Date and each anniversary thereof, Company shall submit to
Agent an Officers' Certificate setting forth in reasonable detail the type and
amount of insurance maintained pursuant to this subsection. Each of Holding,
Company and each Subsidiary shall use its reasonable best efforts to sell assets
which are not necessary for their continuing operations.
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5.5 Inspection; Lender Meeting
Holding, Company and its Subsidiaries shall permit any authorized
representatives designated by any Lender or Eurocurrency Lender to visit and
inspect any of the properties of Holding, Company and its Subsidiaries,
including its and their financial and accounting records, and to make copies and
take extracts therefrom, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants, all
upon reasonable notice and at reasonable times during normal business hours and
as often as may be reasonably requested. Without in any way limiting the
foregoing, Company will participate in an annual meeting of Agent, Lenders and
Eurocurrency Lenders to be held at such place and time as may be agreed to by
Company and Agent and more frequent meetings if requested by Agent or Requisite
Lenders.
5.6 No Further Negative Pledges
Except with respect to specific property encumbered to secure payment of
particular Indebtedness, neither Holding, Company nor any Subsidiary shall enter
into any agreement prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired.
5.7 Compliance with Laws, etc.
Holding, Company and the Subsidiaries shall comply with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
(including, without limitation, all Environmental Laws), noncompliance with
which would or could reasonably be expected to materially adversely affect the
business, properties, assets, operations or condition (financial or otherwise)
of Holding and its Subsidiaries, taken as a whole.
5.8 Environmental Disclosure and Inspection
(A) Except as disclosed in writing to Lenders and Eurocurrency
Lenders prior to the Closing Date, Holding shall comply, and shall cause
each of Company and the Subsidiaries and their Facilities to comply, and
cause (a) their respective employees, agents, contractors and
subcontractors and (b) all tenants under any lease or occupancy agreement
affecting any portion of the Facilities to comply with all applicable
Environmental Laws in all material respects. Holding shall cause each of
its Subsidiaries to use all commercially reasonable efforts to comply in
all material respects with all Environmental Laws applicable to such
matters in a timely manner following the Closing Date.
(B) Except as to matters disclosed in writing to Lenders and
Eurocurrency Lenders prior to the Closing Date, Company shall promptly
advise Lenders and Eurocurrency Lenders in writing and in reasonable detail
of (a) any material Release of any Hazardous Material required to be
reported to any federal, state or local governmental or regulatory agency,
domestic or foreign, under all applicable Environmental Laws, (b) any
remedial action taken by Holding, Company or, to the extent Holding or any
of its Subsidiaries has any such knowledge,
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any such Person or Subsidiary in response to (1) any Hazardous Material
on, under or about any Facility, the existence of which would reasonably
be expected to result in an Environmental Claim having a material
adverse effect on the business or financial condition of Holding and its
Subsidiaries, taken as a whole or (2) any Environmental Claim that would
reasonably be expected to have a material adverse effect on the business
or financial condition of Holding and its Subsidiaries taken as a whole,
and (c) any request for information from any governmental agency,
domestic or foreign, that indicates such agency is investigating whether
Holding, Company or any Subsidiary may be potentially responsible for a
material Release of Hazardous Materials.
(C) Company shall promptly notify Lenders and Eurocurrency Lenders of
any proposed acquisition of assets or property by Holding, Company or any
Subsidiary, that could reasonably be expected to result in Environmental
Claims having a material adverse effect on the business or financial
condition of Holding and its Subsidiaries, taken as a whole.
(D) Company shall, at its own expense, provide copies to Agent of
such documents or information to which Holding, Company or any Subsidiaries
has access as Agent may reasonably request in relation to any matters
disclosed pursuant to this subsection 5.8.
(E) Company shall promptly notify Lenders and Eurocurrency Lenders of
any material change in the validity or enforceability or any termination or
notice of termination of the indemnity obligations of Xxxxxx Xxxxxxxxxxx
owed to the Company pursuant to the Unisys Acquisition Agreement.
5.9 Hazardous Materials; Remedial Action
A. Each of Holding and Company shall, and shall cause the Subsidiaries,
to (i) store, use, dispose and transport any Hazardous Materials in compliance
with all applicable Environmental Laws, except to the extent that any failure so
to comply would not reasonably be expected to have a material adverse effect on
the business or financial condition of Holding and its Subsidiaries, taken as a
whole, and (ii) take promptly any and all necessary remedial action in response
to the Release of any Hazardous Materials on, under or about any Facility,
except (x) with respect to matters as to which Xxxxxx Xxxxxxxxxxx is obligated
to indemnify Holding or a Subsidiary thereof, or as to which Holding or a
Subsidiary thereof is contesting in good faith the extent of its liability, or
(y) to the extent that any failure so to take such action would not reasonably
be expected to have a material adverse effect on the business or financial
condition of Holding and its Subsidiaries, taken as a whole. In the event
Holding, Company or any Subsidiary undertakes any remedial action with respect
to any Hazardous Material on, under or about any Facility, Holding, Company or
such Subsidiary shall conduct and complete such remedial action in compliance
with all applicable Environmental Laws, and in a manner not inconsistent with
all applicable orders and directives of all federal, state and local
governmental authorities, except (a) when the extent of Holding's, Company's or
such Subsidiary's liability with respect to such Hazardous Material is being
contested in good faith by Holding, Company or such Subsidiary or (b) to the
extent that any failure so to comply or be not inconsistent would not reasonably
be expected to have a material adverse effect on the business or financial
condition of Holding and its Subsidiaries, taken as a whole.
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B. Company shall not and shall not permit its Subsidiaries to install or
permit to be installed any regulated level of asbestos in any property owned or
leased by any of them, except as appropriate for the operation of their
respective equipment. With respect to any asbestos currently present in such
property, Company shall and shall cause its Subsidiaries to promptly and in
accordance with all applicable Environmental Laws and prudent industry
practices, maintain such asbestos in good and safe condition.
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5.10 Further Assurances; New Subsidiaries; Intellectual Property; Landlord
Waivers
At any time or from time to time upon the request of Agent, Holding or
Company, or both, shall and shall cause the Subsidiaries to execute and deliver
such further documents (including without limitation, such financing statements,
continuation statements or amendments thereto and such other documents and
certificates as may be necessary or as Agent may reasonably request, in order to
perfect and preserve the security interests granted or purported to be granted
under any of the Collateral Documents, in the event Company, Holding and/or any
Subsidiary changes its name or address) and do such other acts and things as
Agent may reasonably request in order to effect fully the purposes of this
Agreement and the other Domestic Loan Documents and to provide for payment of
(i) the Obligations in accordance with the terms of this Agreement and the other
Domestic Loan Documents and (ii) the Eurocurrency Guaranty Obligations in
accordance with the terms of the Eurocurrency Guaranties or all obligations
under the Eurocurrency Loan Documents, as appropriate; PROVIDED, HOWEVER, with
respect to actions requested by Agent in connection with Collateral consisting
of deposit accounts, Holding, Company and the Subsidiaries shall only be
required to take actions limited to: (i) providing joint notification with
Agent to any such Person holding such deposit accounts, stating that such
deposit accounts are subject to a security interest granted to Collateral Agent
in connection with this Agreement and the Eurocurrency Credit Agreements and
upon the occurrence of certain events, Collateral Agent shall have certain
remedies, including the restriction of withdrawals; and (ii) amending the
applicable schedules to the Collateral Documents. Without limiting any of the
foregoing, in the event (i) a Person becomes a Subsidiary after the Closing Date
or (ii) Holding, Company or any Subsidiary described in the preceding clause (i)
registers any trademark or material patent with any governmental authority,
then, Holding and Company, upon the request of Agent shall or shall cause such
Subsidiary to execute and deliver such guaranties, Collateral Documents, and
such other agreements, pledges, assignments in a mutually reasonably
satisfactory fashion, documents and certificates (including, without limitation,
any amendments to the Domestic Loan Documents) as may be necessary or as Agent
may reasonably request and do such other acts and things as Agent may reasonably
request in order to have such Subsidiary guaranty and/or secure the Obligations
and its Eurocurrency Guaranty Obligations with its personal property (including
without limitation fixtures) or have such trademark or patent secure the
Obligations and its Eurocurrency Guaranty Obligations, and effect fully the
purposes of this Agreement and the other Domestic Loan Documents and to provide
for payment of (i) the Obligations in accordance with the terms of this
Agreement and the other Domestic Loan Documents and (ii) the Eurocurrency
Guaranty Obligations in accordance with the terms of the Eurocurrency
Guaranties; PROVIDED that any actions with respect to Collateral consisting of
deposit accounts shall be limited to the proviso in the immediately preceding
sentence. Company shall, and shall cause each Subsidiary to, in good faith use
all reasonable efforts to obtain landlord's waivers or subordinations in form
and substance satisfactory to Agent with respect to Collateral located in
Facilities leased by Company and each Subsidiary; PROVIDED that no security or
pledge agreements or other action contemplated by this sentence shall be
required to be entered into or taken to the extent required to avoid (A) any
violation of applicable law, (B) liability of officers, directors or
shareholders of Holding or any of its Subsidiaries, (C) any material risk of any
of the foregoing, or (D) costs which Holding, the Agent, and the Eurocurrency
Administrative Agent shall determine to be excessive in relation to the benefits
that would be conferred by such security or pledge agreements or action.
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5.11 Notice of Asset Transfers
A. Company shall give Agent written notice of US/US Transfers
(describing the type and location of all assets transferred) at such time, if
any, that transfers relate to a location where Collateral has not theretofore
been located or the net aggregate book value of the assets transferred in
US/US Transfers (excluding transfers of inventory in the ordinary course of
business subject to the perfected Lien of Agent, Eurocurrency Administrative
Agent or Eurocurrency Collateral Agent, as the case may be) since (i) July
31, 1997 exceeds $2,000,000 and (ii) the most recent Recalculation Date
exceeds $2,000,000. Upon receipt of such written notice, Agent shall have 30
days to make the appropriate filings against such assets in order to maintain
the perfection of the Liens with respect to all such assets transferred. On
the first day following any such 30-day period (the "Recalculation Date"),
Company and its Subsidiaries may make such US/US Transfers, subject to the
restrictions set forth in clause (C) of this subsection 5.11. The
requirements of this subsection 5.11A shall not apply to any Asset Transfer
pursuant to subsection 6.7B(vi) or 6.7B(ix) and furthermore shall not apply
to any Asset Transfer involving the Proposed Closed Facilities or any
Discontinued Operations unless such transfers relate to a new location where
Collateral shall be located.
B. Company shall give Agent written notice of Asset Transfers among
Foreign Subsidiaries (describing the type and location of all assets
transferred) at such time, if any, that transfers relate to a location where
Collateral has not theretofore been located or the net aggregate book value of
the assets transferred in Asset Transfers among Foreign Subsidiaries (excluding
transfers of inventory in the ordinary course of business subject to the Lien of
Agent, Eurocurrency Administrative Agent or Eurocurrency Collateral Agent, as
the case may be) since (i) July 31, 1997, exceeds $2,000,000 and (ii) the most
recent Foreign Recalculation Date exceeds $2,000,000. Upon receipt of such
written notice, Agent shall have 90 days to make the appropriate filings against
such assets in order to maintain the perfection of the Liens with respect to all
such assets transferred. On the first day following any such 90-day period (the
"Foreign Recalculation Date"), Holding and its Subsidiaries may make such Asset
Transfers among Foreign Subsidiaries, subject to the restrictions set forth in
clause (C) of this subsecton 5.11. The requirements of this subsection 5.11A
shall not apply to any Asset Transfer pursuant to subsection 6.7B(vi) or
6.7B(ix) and furthermore shall not apply to any Asset Transfer involving the
Proposed Closed Facilities or any Discontinued Operations unless such transfers
relate to a new location where Collateral shall be located.
C. Holding and its Subsidiaries shall receive the prior written consent
of Requisite Lenders for any US/Foreign Transfer, or any Asset Transfer by a
Foreign Subsidiary to Holding or any Domestic Subsidiary. Notwithstanding the
foregoing, Holding and its Subsidiaries may ship raw materials to Nu-kote
International de Mexico, S.A. de C.V., in the ordinary course of business when
no Event of Default exists.
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5.12 Deposit Accounts
Holding and its Subsidiaries shall maintain all of their cash and deposit
accounts with one or more of the Lenders and the Eurocurrency Lenders or their
Affiliates, except for available funds aggregating up to $5,000,000 outstanding
at any time which may be maintained with financial institutions other than
Lenders and Eurocurrency Lenders or their Affiliates for xxxxx cash, payroll,
lockbox purposes, and similar uses in the ordinary course of business.
5.13 Additional Collateral
Within 120 days after the Closing Date, Holding and Company shall deliver
or cause to be delivered to Agent the following:
(i) A paid mortgagee policy of title insurance in the amount of
$1,500,000, $300,000, $5,000,000, $2,500,000, and the fair market
value of the Franklin, Tennessee, property, respectively,
insuring that the Lien in favor of the Agent upon the real
property of Holding and its Subsidiaries located at Bardstown,
Kentucky, Macedon, New York, Connellsville, Pennsylvania, Derry,
Pennsylvania, and Franklin, Tennessee, are first priority liens
upon such property, such mortgagee policy of title insurance to
have been issued at the Company's expense by a title insurance
company acceptable to the Agent, and shall contain such
endorsements as may be required by the Agent.
(ii) A survey of each parcel of the real property identified in (i)
above dated as of a current date and certified to the Agent by a
registered public surveyor acceptable to the Agent, showing (a) a
metes and bounds description of such property, (b) all recorded
or visible boundary lines, building locations, locations of
utilities, easements, rights of way, rights of access, building
or set-back lines, dedications, and natural and manufactured
objects affecting such property, (c) any encroachments upon or
protrusions from such property, (d) any area federally designated
as a flood hazard, and (e) such other matters as the Agent may
require, including copies of all recorded easements, rights of
way, restrictive covenants, leases, encumbrances, and other
documents and instruments filed of record affecting such property
as Agent may reasonably require.
(iii) Unconditional guarantees of payment and performance of the
Obligations and all obligations now or hereafter owing under the
Eurocurrency Loan Documents, Liens upon all of the issued and
outstanding shares, and Liens upon substantially all of the
assets of the Subsidiaries of Holding listed on SCHEDULE 5.13-A
hereto, together with supporting corporate authority documents
and such other similar items as Agent may reasonably require, all
upon terms and conditions satisfactory to Agent; PROVIDED that no
security or pledge agreements or other action contemplated by
this sentence shall be
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required to be entered into or taken to the extent required to
avoid (A) any violation of applicable law, (B) liability of
officers, directors or shareholders of Holding or any of its
Subsidiaries, (C) any material risk of any of the foregoing, or
(D) costs which Holding, the Agent, and the Eurocurrency
Administrative Agent shall determine to be excessive in
relation to the benefits that would be conferred by such security
or pledge agreements or action.
(iv) To the extent not heretofore delivered to Agent, the intercompany
notes required by subsection 6.3 of this Agreement, together with
such corporate authority documents relating thereto as Agent may
reasonably require.
5.14 Delivery of Xxxxx Shares
Within 5 Business Days after the Closing Date, Holding and Company shall
deliver or cause to be delivered to Agent a Lien upon the remaining 35% of the
shares of Xxxxx, upon terms satisfactory to Agent, together with supporting
corporate authority documents and such other similar items as Agent may
reasonably require.
SECTION 6. NEGATIVE COVENANTS
Holding and Company severally covenant and agree that, on and after the
Closing Date, so long as the Revolving Credit Commitments shall be in effect and
until payment in full of all of the Revolving Credit Loans and all other amounts
owing hereunder, unless Requisite Lenders shall otherwise give prior written
consent, such Person will perform all covenants in this Section 6 to be
performed by it (including, in the case of Company, covenants applicable to it
in its capacity as a Subsidiary of Holding) and cause each of its Subsidiaries
to comply with all covenants in this Section 6 applicable to such Subsidiary.
6.1 Indebtedness
Holding and Company will not, and will not permit any Subsidiary to,
directly or indirectly, create, incur, assume, guaranty, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness, except:
(i) Holding and its Subsidiaries may become and remain liable with
respect to the Obligations;
(ii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness in respect of (y) Capital Leases if such Capital
Leases would be permitted under subsection 6.6 and (z) Indebtedness
incurred to purchase, or to finance or refinance the purchase price of,
personal property (including, without limitation, fixtures but excluding
Inventory) used in the conduct of Holding's or any of its Subsidiaries'
business; PROVIDED that in the case of clause (z) above (a) at the time of
incurrence, no Event of Default, or Potential Event of Default has occurred
and is continuing or would result therefrom, (b) the documentation pursuant
to which such Indebtedness is incurred either does not contain any
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financial covenants or contains financial covenants less restrictive (to an
extent reasonably acceptable to Agent) than those contained in this
Agreement, (c) such documentation does not contain any "cross-default"
provision providing for a default on such Indebtedness solely upon the
occurrence of a default under any other Contractual Obligation of Holding
or any of its Subsidiaries (including this Agreement), other than a
Contractual Obligation between Holding or any of its Subsidiaries and the
holder of such Indebtedness or any of such holder's Affiliates, and (d) the
amount of such Indebtedness incurred is not greater than the fair market
value of (as determined in good faith by Company or the relevant Subsidiary
thereof), plus the delivered and installed cost and related expenses for,
any property so financed at the time of such acquisition;
(iii) Holding and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 6.4;
(iv) Company and its Subsidiaries may make and maintain intercompany
loans to or from Holding or any Subsidiary thereof permitted by
subsection 6.3;
(v) Company and its Subsidiaries may remain liable with respect to
(A) the existing Indebtedness listed on SCHEDULE 6.1 annexed to the
Original Credit Agreement and (B) any refinancings, refundings, renewals or
extensions thereof, PROVIDED that the amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renewal or extension;
(vi) Discontinued Operations may remain liable with respect to
Indebtedness for working capital and other general corporate purposes not
exceeding $1,000,000 in aggregate principal amount outstanding at any time;
(vii) Latin American Subsidiaries may become and remain liable with
respect to Indebtedness for working capital and other general corporate
purposes not exceeding $1,000,000 in aggregate principal amount outstanding
at any time;
(viii) Holding and its Subsidiaries may become and remain liable with
respect to Indebtedness under any Interest Hedge Agreements, comprised
solely of forward currency exchange, option and swap agreements with a term
not to exceed 90 days and the net hedged position not to exceed $20,000,000
in aggregate notional amount outstanding at any time, entered into with any
Lender or Eurocurrency Lender or Affiliate thereof;
(ix) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness not exceeding $3,000,000 in aggregate principal
amount outstanding at any time, incurred for the purpose of financing the
premiums for insurance policies;
(x) Holding and its Subsidiaries may become and remain liable with
respect to Indebtedness pursuant to the Eurocurrency Credit Agreements; and
(xi) Company and its Subsidiaries may become and remain liable to any
Lender with respect to Indebtedness in respect of cash management
facilities offered to Company and
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its Subsidiaries by any Lenders.
6.2 Liens
Holding and Company will not, and will not permit any Subsidiary to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any property or asset (including any document or instrument in
respect of goods or accounts receivable) of Holding, Company or any Subsidiary,
whether now owned or hereafter acquired, or any income or profits therefrom,
except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens created to secure the Indebtedness permitted pursuant to
subsection 6.1(ii); PROVIDED such Liens relate solely to the property
financed with such Indebtedness;
(iv) Liens existing on February 24, 1995 which secure the Indebtedness
permitted pursuant to subsection 6.1(v) (or are provided for on such date
under the documentation relating to such Indebtedness) and which are listed
on SCHEDULE 6.2 annexed to the Original Credit Agreement, and renewal of
such Liens in connection with any refinancing, refunding, renewal or
extension permitted by clause (B) of subsection 6.1(v), PROVIDED that no
such Lien is extended to cover any additional property or assets after
February 24, 1995 in connection with any refinancing, refunding, renewal or
extension contemplated by such clause (B) to subsection 6.1(v);
(v) Liens on assets of Discontinued Operations securing Indebtedness
permitted pursuant to subsection 6.1(vi);
(vi) Liens on assets of Latin American Subsidiaries securing
Indebtedness, permitted pursuant to subsection 6.1(vii);
(vii) Liens on insurance policies or the proceeds of insurance policies
to secure Indebtedness permitted by subsection 6.1(ix); and
(viii) Liens granted to the Eurocurrency Administrative Agent pursuant
to the Eurocurrency Loan Documents.
6.3 Investments
Holding and Company will not, and will not permit any Subsidiary to,
directly or indirectly, make or own any Investment in any Person, except:
(i) Company and its Subsidiaries may make and own Investments in Cash
Equivalents;
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(ii) Company may make and maintain intercompany loans to Holding to
the extent permitted by subsection 6.5;
(iii) Investments existing on July 31, 1997 and listed on SCHEDULE 6.3
hereto;
(iv) Company and its Subsidiaries may make and maintain Investments as
permitted by subsection 6.7B;
(v) Company and its Subsidiaries may make and maintain Investments in
(including intercompany loans to) Company and the Domestic Subsidiaries for
any purpose; provided, however, (A) such investment shall be in the form of
an intercompany loan, (B) Company or such Subsidiary making the loan, as
appropriate, shall maintain a ledger and record all such loans pursuant to
this subsection 6.3(v) and such ledger shall be available for inspection at
any Lender's request and (C) all such intercompany loans made by Company or
the Domestic Subsidiaries shall be evidenced by promissory notes which
shall be on terms and conditions satisfactory to Agent, including
collateral, and which shall be pledged to Agent pursuant to the Collateral
Documents;
(vi) Company and its Domestic Subsidiaries may make and maintain
Investments in (including intercompany loans to) Eurocurrency Borrowers for
any purpose; PROVIDED, HOWEVER, that (A) the aggregate principal amount of
all such Investments in all such Eurocurrency Borrowers shall not exceed
$15,000,000 outstanding at any time, (B) Company or any such Domestic
Subsidiary, as appropriate, shall maintain a ledger recording all such
Investments in and intercompany loans made pursuant to this
subsection 6.3(vi) and such ledger shall be available for inspection at any
Lender's request and (C) all intercompany loans made pursuant to this
subsection 6.3(vi) shall be evidenced by promissory notes which shall be on
terms and conditions satisfactory to Agent, including collateral, and which
shall be pledged to Agent pursuant to the Collateral Documents;
(vii) Company and its Domestic Subsidiaries may make and maintain
Investments in (including intercompany loans to) Latin American
Subsidiaries for any purpose; PROVIDED, HOWEVER, that (A) the aggregate
principal amount of all such Investments in all Latin American Subsidiaries
shall not exceed $3,000,000 outstanding at any time, (B) Company or any
such Domestic Subsidiary, as appropriate, shall maintain a ledger recording
all such Investments in and intercompany loans made pursuant to this
subsection 6.3(vii) and such ledger shall be available for inspection at
any Lender's request and (C) all intercompany loans made pursuant to this
subsection 6.3(vii) shall be evidenced by promissory notes which shall be
on terms and conditions satisfactory to Agent, including collateral, and
which shall be pledged to Agent pursuant to the Collateral Documents;
(viii) Xxxxx and Hardcopy Deutschland may make and maintain
Investments in (including intercompany loans to) their Subsidiaries and
Chinese operations for any purpose; PROVIDED, HOWEVER, that (A) the
aggregate principal amount of all such Investments shall not exceed
$5,000,000 outstanding at any time, (B) Xxxxx shall maintain a ledger
recording all such
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Investments in and intercompany loans made pursuant to this subsection
6.3(viii) and such ledger shall be available for inspection at any
Eurocurrency Lender's request, and (C) all intercompany loans made
pursuant to this subsection 6.3(vii) shall be evidenced by promissory notes
which shall be on terms and conditions satisfactory to Agent, including
collateral, and which shall be pledged to Agent pursuant to the Collateral
Documents;
(ix) Produktions and Pelikan Hardcopy may make and maintain
Investments in (including intercompany loans to) their Subsidiaries for any
purpose; PROVIDED, HOWEVER, that (A) the aggregate principal amount of all
such Investments shall not exceed $25,000,000 outstanding at any time,
(B) Produktions shall maintain a ledger recording all such Investments in
and intercompany loans made pursuant to this subsection 6.3(ix) and such
ledger shall be available for inspection at any Eurocurrency Lender's
request and (C) all intercompany loans made pursuant to this
subsection 6.3(ix) shall be evidenced by promissory notes which shall be on
terms and conditions satisfactory to Agent, including collateral, and which
shall be pledged to Agent pursuant to the Collateral Documents;
(x) In addition to Investments permitted by subsection 6.3(iii),
Pelikan Scotland may make and maintain Investments in (including
intercompany loans to) its Subsidiaries and the U.K. Subsidiaries for any
purpose; PROVIDED, HOWEVER, that (A) the aggregate principal amount of all
such Investments shall not exceed $5,000,000 outstanding at any time,
(B) Pelikan Scotland shall maintain a ledger recording all such Investments
in and intercompany loans made pursuant to this subsection 6.3(x) and such
ledger shall be available for inspection at any Eurocurrency Lender's
request and (C) all intercompany loans made pursuant to this
subsection 6.3(x) shall be evidenced by promissory notes which shall be on
terms and conditions satisfactory to Agent, including collateral, and which
shall be pledged to Agent pursuant to the Collateral Documents;
(xi) Xxxxx and Hardcopy Deutschland may make and maintain Investments
in (including intercompany loans to) Produktions, Pelikan Hardcopy and
Pelikan Scotland for any purpose; PROVIDED, HOWEVER, that (A) the aggregate
principal amount of all such Investments shall not exceed $20,000,000
outstanding at any time, (B) Xxxxx shall maintain a ledger recording all
such Investments made pursuant to this subsection 6.3(xi) and such ledger
shall be available for inspection at any Eurocurrency Lender's request and
(C) all Investments made pursuant to this subsection 6.3(xi) shall be
evidenced by promissory notes which shall be on terms and conditions
satisfactory to Agent, including collateral, which shall be pledged to
Agent pursuant to the Collateral Documents and shall be subordinated to the
debt evidenced by the Eurocurrency Credit Agreement to which the Person in
whom the Investment hereunder is being made is party such that no payments
shall be made on such intercompany indebtedness after the occurrence of a
Potential Event of Default or Event of Default under such Eurocurrency
Credit Agreement;
(xii) Produktions and Pelikan Hardcopy may make and maintain
Investments in (including intercompany loans to) Xxxxx, Hardcopy
Deutschland and Pelikan Scotland for any purpose; PROVIDED, HOWEVER, that
(A) the aggregate principal amount of all such Investments shall not exceed
$10,000,000 outstanding at any time, (B) Produktions shall maintain a
ledger
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recording all such Investments made pursuant to this subsection 6.3(xii)
and such ledger shall be available for inspection at any Eurocurrency
Lender's request and (C) all Investments made pursuant to this subsection
6.3(xii) shall be evidenced by promissory notes which shall be on terms
and conditions satisfactory to Agent, including collateral, and shall be
pledged to Agent pursuant to the appropriate Collateral Documents and, to
the extent such Investment is being made in Pelikan Scotland, shall
be subordinated to the debt evidenced by the U.K. Credit Agreement such
that no payments shall be made on such intercompany indebtedness after the
occurrence of a Potential Event of Default or Event of Default under the
U.K. Facility Agreement;
(xiii) Pelikan Scotland may make and maintain Investments in (including
intercompany loans to) Xxxxx, Hardcopy Deutschland, Produktions or Pelikan
Hardcopy for any purpose; PROVIDED, HOWEVER, that (A) the aggregate
principal amount of all such Investments shall not exceed $40,000,000
outstanding at any time, (B) Pelikan Scotland shall maintain a ledger
recording all such Investments made pursuant to this subsection 6.3(xiii)
and such ledger shall be available for inspection at any Eurocurrency
Lender's request and (C) all Investments made pursuant to this
subsection 6.3(xiii) shall be evidenced by promissory notes which shall be
on terms and conditions satisfactory to Agent, including collateral, and
shall be pledged to Agent pursuant to the appropriate Collateral Documents
and, to the extent such Investment is being made in Produktions or Pelikan
Hardcopy, shall be subordinated to the debt evidenced by the Swiss Facility
Agreement such that no payments shall be made on such intercompany
indebtedness after the occurrence of a Potential Event of Default or Event
of Default under the Swiss Facility Agreement;
(xiv) Xxxxx, Hardcopy Deutschland, Produktions, Pelikan Hardcopy and
Pelikan Scotland may make and maintain Investments in (including
intercompany loans to) Company for any purpose; PROVIDED, HOWEVER, that
(A) the aggregate principal amount of all such Investments shall not exceed
$30,000,000 outstanding at any time, (B) any Eurocurrency Borrower making
any such Investments shall maintain a ledger recording all such Investments
made pursuant to this subsection 6.3(xiv) and such ledger shall be
available for inspection at any Eurocurrency Lender's request, (C) all
Investments made by Produktions, Pelikan Hardcopy or Pelikan Scotland
pursuant to this subsection 6.3(xiv) shall be evidenced by promissory notes
which shall be on terms and conditions satisfactory to Agent, including
collateral, and shall be pledged to Agent pursuant to the Collateral
Documents and shall be subordinated to the debt evidenced by this Agreement
such that no payments shall be made on such intercompany indebtedness after
the occurrence of a Potential Event of Default or Event of Default under
this Agreement and (D) all Investments made by Xxxxx or Hardcopy
Deutschland pursuant to this subsection 6.3(xiv) shall be evidenced by
promissory notes which shall be on terms and conditions satisfactory to
Agent, shall be pledged to Agent pursuant to the Collateral Documents, and
shall be subordinated to the debt evidenced by this Agreement such that no
payments shall be made on such intercompany indebtedness after the
occurrence of a Potential Event of Default or Event of Default under this
Agreement;
Notwithstanding anything in this Agreement to the contrary, in no event shall
the aggregate amount of Investments made after February 24, 1995 by Holding,
Company and the Domestic Subsidiaries in
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Foreign Subsidiaries, permitted pursuant to this subsection 6.3 exceed
$30,000,000 in aggregate principal amount outstanding at any time, and in no
event shall the aggregate amount of Investments made on or after April 1,
1997, by Holding and its Subsidiaries in MIT exceed $6,000,000 in aggregate
principal amount outstanding at any time.
6.4 Contingent Obligations
Holding and Company will not, and will not permit any Subsidiary to,
directly or indirectly, create or become or be liable with respect to any
Contingent Obligation except:
(i) Contingent Obligations in respect of the Obligations;
(ii) guaranties resulting from endorsement of negotiable instruments
for collection in the ordinary course of business;
(iii) guaranties by Holding, Company or any Domestic Subsidiary in the
ordinary course of business of Operating Leases and Capital Leases of
Holding, Company or such Domestic Subsidiary permitted by subsection 6.6;
(iv) guaranties by Holding or its Subsidiaries in the ordinary course
of business of Operating Leases and Capital Leases of any Foreign
Subsidiary permitted by subsection 6.6;
(v) guaranties by Holding and its Subsidiaries of loans or advances
to employees for moving, travel and entertainment expenses, drawing
accounts and similar expenditures made in the ordinary course of business;
(vi) Contingent Obligations in respect of interest rate or foreign
currency protection agreements or hedging arrangements permitted pursuant
to subsection 6.1(viii);
(vii) obligations to insurers in respect of workers' compensation and
other insurance coverage incurred in the ordinary course of business;
(viii) Contingent Obligations in respect of the Eurocurrency Credit
Agreements;
(ix) guarantees, product warranties or indemnities issued by Company
or its Subsidiaries in the ordinary course of business in connection with
the sale of Inventory, services or assets;
(x) Contingent Obligations in respect of existing litigation set
forth on Schedule 4.6 attached hereto;
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(xi) Contingent Obligations in respect of Indebtedness permitted
pursuant to subsection 6.1(vii) and (viii); and
(xii) Contingent Obligations in respect of surety, appeal, performance
or return-of-money bonds not to exceed $1,000,000 in the aggregate
outstanding at any time.
6.5 Restricted Junior Payments
Holding and Company will not, and will not permit any Domestic
Subsidiary to, directly or indirectly, declare, order, pay, make or set apart
any sum (excluding any foreign law requirement to maintain a statutory
reserve or the like) for any Restricted Junior Payment except:
(i) Holding may declare and pay any dividend or make any
distribution in respect of its stock required or permitted by the terms
of Holding's Rights Agreement, dated as of May 19, 1994, and amended as
of November 15, 1994, between Holding and Chemical Bank, as Rights
Agent, and the Series A Junior Participating Preferred Stock issuable
upon the exercise of any preferred share purchase right, as said Rights
Agreement and Series A Junior Participating Preferred Stock may be
supplemented from time to time;
(ii) In addition to clause (i) above of this subsection 6.5,
Company may declare and pay dividends or otherwise make distributions,
loans or advances to Holding of up to an aggregate amount of $6,000,000
to permit Holding to purchase or cancel any stock options or settle any
stock appreciation rights held by, or distribute any amounts under any
deferred compensation plan or arrangement in respect of, any employee or
director of Holding or any of its Subsidiaries upon termination of
employment or other service, or to purchase any of its stock held by any
such employee or director;
(iii) Company may declare and pay dividends or otherwise make
distributions, loans or advances to Holding in amounts sufficient to
cover reasonable and necessary expenses incurred by Holding in
connection with registration, public offerings and exchange listing of
equity securities;
(iv) Company may declare and pay dividends or otherwise make
distributions, loans or advances to Holding in amounts sufficient to pay
tax liabilities of Holding;
(v) Company may declare and pay dividends or otherwise make
distributions, loans or advances to Holding in amounts sufficient to
allow Holding to pay other business and operating expenses incurred in
the ordinary course of business; and
(vi) Company may make (a) payments (including prepayments) on
Existing Seller Notes and (b) payments of amounts due under the
Non-Competition Agreements;
PROVIDED, HOWEVER, that immediately prior to and immediately after giving
effect to any Restricted Junior Payment permitted by clauses (i) and (ii) of
this subsection 6.5 and clause (vi) of this
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subsection 6.5 relating to voluntary prepayments on Existing Seller Notes, no
Event of Default or Potential Event of Default exists. Holding and Company
will not, nor will they permit any of Domestic Subsidiary to, deposit any
funds for the purpose of making any Restricted Junior Payment with a trustee,
paying agent or registrar or other payment intermediary more than three
Business Days prior to the date such payment is due.
6.6 Financial Covenants
A. CONSOLIDATED FUNDED DEBT TO CONSOLIDATED EBITDAR
Holding and its Subsidiaries shall not permit the ratio of (i)
Consolidated Funded Debt as of any such date of determination to (ii)
Consolidated EBITDAR (calculated as of any such date of determination on a
cumulative basis for the period of four consecutive fiscal quarters ending on
or before such date of determination, except for the quarters ending
September 30, 1997, and December 31, 1997, which shall be calculated on an
annualized basis beginning April 1, 1997), as of the end of any fiscal
quarter listed below, to exceed the following:
Date Maximum Ratio Permitted
---- -----------------------
9/30/97 15.3 to 1.0
12/31/97 7.4 to 1.0
3/31/98 5.2 to 1.0
6/30/98 4.0 to 1.0
9/30/98 3.6 to 1.0
B. MINIMUM INTEREST COVERAGE RATIO
Holding and its Subsidiaries will not permit the Interest Coverage Ratio
as of the last day of any fiscal quarter listed below (calculated as of any
such date of determination on a cumulative basis beginning April 1, 1997,
until and including March 31, 1998, and thereafter for the period of four
consecutive fiscal quarters ending on or before such date of determination to
be less than the following:
Date Minimum Ratio Permitted
---- -----------------------
9/30/97 0.86 to 1.0
12/31/97 1.73 to 1.0
3/31/98 2.39 to 1.0
6/30/98 2.95 to 1.0
9/30/98 3.23 to 1.0
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C. MINIMUM CONSOLIDATED TANGIBLE NET WORTH
Holding and its Subsidiaries shall not permit Consolidated Tangible Net
Worth as of the last day of any fiscal quarter listed below to be less than
the following:
Date Minimum Permitted Amount
---- -------------------------
9/30/97 $17,000,000
12/31/97 18,500,000
3/31/98 22,500,000
6/30/98 24,500,000
9/30/98 25,500,000
Provided that to the extent Restructuring Charges exceed $15,000,000 in
Fiscal Year 1998, the minimum required Consolidated Tangible Net Worth at
September 30, 1997, December 31, 1997, and March 31, 1998, shall be reduced
by such excess amount.
D. MAXIMUM CONSOLIDATED GAAP CAPITAL EXPENDITURES
Holding and its Subsidiaries shall not permit Consolidated GAAP Capital
Expenditures to exceed the following amounts, calculated quarterly on a
cumulative basis beginning April 1, 1997:
Date Maximum Permitted Amount
Since April 1, 1997
---- -------------------------
9/30/97 $ 5,300,000
12/31/97 7,100,000
3/31/98 9,000,000
6/30/98 11,700,000
9/30/98 14,500,000
The foregoing Maximum Permitted Amount shall be reduced by all Investments by
Holdings and its Subsidiaries in MIT on or after April 1, 1997, in excess of
$5,000,000.
E. MAXIMUM RESTRUCTURING CHARGE
Holding and its Subsidiaries shall not permit expenditures on and after
April 1, 1997, for Restructuring Charges to exceed $20,000,000.
F. CONSOLIDATED FUNDED DEBT TO CONSOLIDATED NET CURRENT ASSETS
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Holding and its Subsidiaries shall not permit the ratio of (i)
Consolidated Funded Debt to (ii) Consolidated Net Current Assets, as of the
end of any month, to be greater than 1.0 to 1.0.
G. MINIMUM EBITDAR
Holding and its Subsidiaries shall not permit Consolidated EBITDAR
(calculated on a cumulative basis, beginning April 1, 1997, until and
including March 31, 1998, and thereafter for the period of twelve consecutive
months ending on or before such date of determination) to, as of the dates
set forth below, be less than the following:
Date Minimum Permitted Amount
---- -------------------------
9/30/97 $ 4,737,000
10/31/97 6,695,000
11/30/97 8,782,000
12/31/97 14,671,000
1/31/98 16,293,000
2/28/98 19,213,000
3/31/98 26,956,000
4/30/98 28,469,000
5/31/98 30,034,000
6/30/98 34,195,000
7/31/98 35,126,000
8/31/98 36,152,000
9/30/98 37,490,000
10/31/98 38,081,000
11/30/98 38,649,000
Provided that, notwithstanding the foregoing, a failure of Consolidated
EBITDAR to exceed the foregoing amounts in only one of the first two months
of any calendar quarter shall not constitute an Event of Default if
Consolidated EBITDAR exceed the foregoing amounts for the other of the first
two months of any calendar quarter. A failure in the third month of any
quarter shall constitute an Event of Default.
H. CURRENT RATIO
Holding and its Subsidiaries shall not permit the Current Ratio as of
the last day of any fiscal
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quarters ending September 30, 1997, December 31, 1997, and March 31, 1998, to
be less than 1.5 to 1.0, or any fiscal quarter thereafter beginning with the
fiscal quarter ending June 30, 1998, to be less than 2.0 to 1.0.
6.7 Restriction on Fundamental Changes
A. Other than as permitted by subsection 6.7B, neither Holding,
Company nor any Subsidiary may, without the consent of Requisite Lenders,
acquire or create any Subsidiaries or convey, sell, lease, sublease or
transfer any of its assets to any of its Subsidiaries.
B. Neither Holding, Company nor any Subsidiary will enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, exchange,
lease, sub-lease, transfer or otherwise dispose of, in one transaction or a
series of related transactions, all or any substantial part of its business,
property or fixed assets or all or any portion of the stock or other evidence
of beneficial ownership of, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or substantially all the business,
property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person except:
(i) Holding may be merged or consolidated with or into
Company, or all or substantially all of its business, property or assets
may be conveyed, sold, leased, transferred or otherwise disposed of, in
one transaction or a series of transactions, to Company and Holding
thereafter may be liquidated, wound up or dissolved; PROVIDED that, in
the case of such a merger or consolidation, Company shall be the
continuing or surviving corporation;
(ii) Company or a Subsidiary thereof may sell, lease,
license, exchange or otherwise dispose of assets or rights in Asset Sale
transactions for cash or Cash Equivalent consideration only so long as
the Net Cash Proceeds thereof are applied as provided in subsection
2.4(A)(ii); PROVIDED that (A) any Asset Sale is made for at least the
fair market value of such assets (as determined in good faith by Company
or such Subsidiary), (B) the aggregate Net Cash Proceeds of Asset Sale
transactions since July 31, 1997, with respect to assets located in the
United Kingdom shall not exceed 10% of the Pounds Sterling equivalent of
the net book value, determined as of July 31, 1997, of all assets of
Company and its Subsidiaries located in the United Kingdom on July 31,
1997, (C) the aggregate Net Cash Proceeds of Asset Sales transactions
since July 31, 1997, with respect to assets located in Switzerland shall
not exceed 10% of the Swiss Franc equivalent of the net book value,
determined as of July 31, 1997, of all assets of Company and its
Subsidiaries located in Switzerland on July 31, 1997, (D) the aggregate
Net Cash Proceeds of Asset Sales transactions since July 31, 1997, with
respect to assets located in Germany shall not exceed 10% of the German
Xxxx equivalent of the net book value, determined as of July 31, 1997,
of all assets of Company and its Subsidiaries located in Germany on July
31, 1997, (E) Asset Sale transactions involving assets located in the
United States may be made so long as the aggregate Net Cash Proceeds of
such Asset Sale transactions since July 31, 1997, shall not exceed
$20,000,000, (F) subject to subsection 2.4A(ii) no sale of the shares of
MIT and no Asset Sale shall be made with respect to MIT unless consented
to by all Lenders, and (G) with respect to Asset Sale transactions not
otherwise referred to in clauses (B), (C), (D), (E) or (F) above or not
otherwise expressly
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permitted by this subsection 6.7B, Company receives the prior written
consent of Requisite Lenders for any such Asset Sale or series of
related Asset Sales involving the fair market value of assets (as
determined in good faith by Company or such Subsidiary) or sales price
in excess of $250,000; PROVIDED, FURTHER, that the restrictions on Asset
Sale transactions set forth in the foregoing PROVISO shall not apply to
any Asset Sale transactions involving (1) the Proposed Closed
Facilities, (2) any Discontinued Operations or (3) any capital stock or
treasury stock of Holding, or any rights, options or warrants to acquire
same; PROVIDED, HOWEVER in no event may any stock of any Subsidiary that
is not a Discontinued Operation be sold;
(iii) A Domestic Subsidiary may be merged or consolidated
with or into Company or another Domestic Subsidiary, or be liquidated,
wound up or dissolved; PROVIDED, HOWEVER, that in the case of such a
merger or consolidation of a Material Domestic Subsidiary, (i) Company
or another Material Domestic Subsidiary shall be the continuing or
surviving corporation and (ii) another Subsidiary which becomes a
Material Domestic Subsidiary and complies with the requirements of
subsection 5.10A shall be the continuing or surviving corporation;
(iv) A Foreign Subsidiary may be merged or consolidated
with or into another Foreign Subsidiary; PROVIDED, HOWEVER, that (x) if
any capital stock of either such Foreign Subsidiary shall have
previously been required to be pledged to Collateral Agent or
Eurocurrency Administrative Agent, such Foreign Subsidiary shall be the
surviving corporation in such merger or consolidation or the same
proportion of the surviving corporation's capital stock shall be
similarly pledged to Collateral Agent or Eurocurrency Administrative
Agent, as applicable, and (y) a Foreign Subsidiary not part of
Discontinued Operations may not be merged or consolidated with another
Foreign Subsidiary that is part of Discontinued Operations unless the
former Subsidiary or another Subsidiary which is not a part of
Discontinued Operations is the surviving or continuing corporation. Any
Foreign Subsidiary the capital stock of which is not required to be
pledged to Collateral Agent or Eurocurrency Collateral Agent may be
liquidated, wound up or dissolved;
(v) Holding or Company may create one or more new
Domestic Subsidiaries thereof; PROVIDED such Domestic Subsidiary shall
comply with subsection 5.10;
(vi) Any of Holding and its Subsidiaries may sell, lease,
consign, transfer or otherwise dispose of Inventory to any Person in the
ordinary course of business;
(vii) Any of Holding and its Subsidiaries may acquire
additional capital stock of an existing Subsidiary thereof from such
Subsidiary; PROVIDED that (i) if such Subsidiary is a Domestic
Subsidiary and any previously outstanding capital stock of such
Subsidiary shall have been pledged to Collateral Agent to secure the
Obligations and the Eurocurrency Guaranty Obligations, 100% of such
additional capital stock shall be similarly pledged to Collateral Agent,
(ii) if such Subsidiary is a Foreign Subsidiary and any previously
outstanding capital stock of such Subsidiary shall have been pledged to
the Collateral Agent to secure the Obligations and the Eurocurrency
Guaranty Obligations, 100% of such additional stock shall be similarly
pledged to Collateral Agent, and (iii) if such Subsidiary is a Foreign
Subsidiary and
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any previously outstanding capital stock of such Subsidiary shall have
been pledged to Eurocurrency Administrative Agent to secure the
obligations under the relevant Eurocurrency Credit Agreement, 100% of
such additional stock shall be similarly pledged to the Eurocurrency
Administrative Agent;
(viii) Investments permitted by subsection 6.3;
(ix) Any of Holding and its Subsidiaries may dispose of
property that is obsolete, worn out or otherwise no longer needed in its
business, including abandonment of trademarks, patents, copyrights and
other intellectual property no longer economically practicable to
maintain; and
(x) Holding and its Subsidiaries may enter into, and
perform, any transactions permitted by subsection 6.10 or 6.13.
Upon any disposition of property or assets in compliance with this subsection
6.7 to Persons other than Holding or its Subsidiaries, Lenders will cause
Collateral Agent to, and Collateral Agent will, take such action as is
necessary to evidence the release of the Liens of Lenders on such property or
assets, including delivering to Holding, Company or any Subsidiary, as
appropriate, appropriate releases and termination statements.
6.8 Sales and Leasebacks
Holding and its Subsidiaries will not directly or indirectly, become or
remain liable (unless indemnified against such liability by a Person other
than Holding or a Subsidiary thereof) as lessee or as guarantor or other
surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property whether now owned or hereafter acquired, (i) that
Holding or its Subsidiaries has sold or transferred or is to sell or transfer
to any other Person, or (ii) that Holding or its Subsidiaries intends to use
for substantially the same purpose as any other property that has been or is
to be sold or transferred by Holding, Company or any Subsidiary to any Person
in connection with such lease (a "Sale/leaseback"); PROVIDED that Company and
its Subsidiaries may enter into sale/leaseback arrangements if permitted by
subsection 6.6.
6.9 Sale or Discount of Receivables
Holding and its Subsidiaries will not, directly or indirectly, sell or
discount notes or accounts receivable held by any such Person; PROVIDED that
the foregoing shall not be construed to restrict or prohibit compromises,
settlements, waivers, substitutions or other modifications or agreements with
respect to such notes or accounts receivable.
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6.10 Transactions with Shareholders, Affiliates and Subsidiaries
Holding and its Subsidiaries will not, directly or indirectly, enter
into or permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or inventory or the
rendering of any service) with any holder of 5% or more of any class of
equity securities of Holding or Company or with any Affiliate of Holding or
Company or of any such holder or with any Subsidiary of Holding, as the case
may be, on terms that are less favorable to Holding or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons
who are not such a holder or Affiliate or Subsidiary; PROVIDED that the
foregoing restriction shall not apply to (i) Indebtedness and Investments
permitted by subsections 6.1 or 6.3, (ii) Contingent Obligations permitted by
subsection 6.4, (iii) payments permitted under subsection 6.5, (iv)
transactions with Holding or a Subsidiary thereof permitted by subsection
6.7, (v) any consulting, management, stock option, stock appreciation right,
or other employment, or deferred compensation agreement or arrangement with
an employee or director of Holding or any of its Subsidiaries that is
approved by a majority of the non-employee members of the board of directors
of Holding or its stockholders, (vi) transactions permitted by subsection
6.11, (vii) the payment of transaction expenses in connection with this
Agreement and the transactions related hereto and thereto, (viii) the payment
by any Subsidiary of royalties for the use of products, trademarks of other
intellectual property rights, guaranty fees, and fees for technical
assistance, corporate administrative support and other services, (ix) the
payment by Holding or any Subsidiary of any amount pursuant to or in respect
of any bylaw or charter provision or agreement providing for indemnification
or reimbursement of any officer, director, employee or other agent of Holding
or any of its Subsidiaries, and (x) payments of customary director fees and
out-of-pocket expense reimbursement. For purposes of this subsection 6.10,
(A) any transaction shall be deemed to have satisfied the standard set forth
in the preceding sentence if (i) such transaction is approved by a majority
of the Disinterested Directors of the Board of Directors of Holding, the
Company or the applicable Subsidiary or (ii) a nationally recognized expert
with expertise in appraising the terms and conditions of the type of
transaction for which approval is required delivers to Holding, the Company
or the applicable Subsidiary (which shall promptly forward a copy to the
Agent) a written opinion stating that such transaction is fair to Holding,
the Company or the applicable Subsidiary from a financial point of view and
(B) "DISINTERESTED DIRECTOR" shall mean, with respect to any Person and
transaction, a member of the Board of Directors of such Person who does not
have any material direct or indirect financial interest in or with respect to
such transaction.
6.11 Disposal of Subsidiary Stock
Except as permitted by subsection 6.7 or as required by the Collateral
Documents and except for Permitted Encumbrances, neither Holding, Company nor
any Subsidiary will,
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity securities of (or warrants, rights or options to acquire shares
or other equity securities of) any of its Subsidiaries other than to
Holding or any of its Subsidiaries if the Liens in favor of Agent,
Eurocurrency Administrative Agent, or Eurocurrency Collateral Agent, as
the case may be, are preserved and ratified, except to qualify directors
if necessary or appropriate under applicable law; or
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(ii) permit any of its Subsidiaries directly or
indirectly to sell, assign, pledge or otherwise encumber or dispose of
any shares of capital stock or other securities of (or warrants, rights
or options to acquire shares or other securities of) such Subsidiary
other than to Holding or any of its Subsidiaries if the Liens in favor
of Agent, Eurocurrency Administrative Agent, or Eurocurrency Collateral
Agent, as the case may be, are preserved and ratified, except to
Company, another Subsidiary or to qualify directors if required by
applicable law.
Notwithstanding the foregoing, Holding and Company may take such action as is
necessary to cause MIT to be a direct or indirect Subsidiary of Holding or a
Domestic Subsidiary if the Liens thereon in favor of Agent are preserved and
ratified.
6.12 Conduct of Business
Holding and its Subsidiaries will not engage in any business other than
the business they were engaged in on February 24, 1995, or business similar
or related to such business, and other lines of business consented to by
Agent and Requisite Lenders. The Subsidiaries of Holding identified on
SCHEDULE 5.13-B hereto shall not engage in any business or acquire any assets.
6.13 Restructuring and Affiliate Reorganizations
Notwithstanding anything else contained herein to the contrary, in order
to effect the restructuring or discontinuation of certain operations at the
Proposed Closed Facilities and the transfer or other disposition, in whole or
in part, of the property and assets relating thereto, Holding and its
Subsidiaries may merge, consolidate, or liquidate, wind-up and dissolve, or
convey, sell, exchange, assign, lease, sub-lease, transfer or otherwise
dispose of, in one transaction or series of related transactions including,
without limitation, but not with respect to capital stock of Holding, by way
of dividend or distribution on or with respect to its capital stock, all or
any portion of its business, property or assets or all or any portion of the
stock or other evidence of beneficial ownership of any Affiliate, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all of the business, property or fixed assets of, or stock or
other evidence of beneficial ownership of, any Affiliate, and may engage in
Asset Transfers as permitted hereto.
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SECTION 7. GUARANTY OF HOLDING
Holding hereby consents to and confirms its guaranty of all Obligations.
In furtherance of the foregoing, Holding hereby agrees as follows:
7.1 Guaranty by Holding
As consideration for Lenders agreeing to enter into this Agreement and
extend the Revolving Credit Commitments hereunder, Holding hereby
unconditionally and irrevocably guaranties the due and punctual payment when
due (whether by required prepayment, declaration, demand or otherwise)
(including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. 362(a))
of all Obligations of Company (including, without limitation, interest which,
but for the filing of a petition in bankruptcy with respect to Company, would
accrue on such Obligations). For purposes of this Section 7, Holding is
referred to as a "Guarantor" and the obligations of Holding under this
subsection 7.1 are referred to as this "Guaranty".
7.2 Terms of Guaranty
The Guarantor agrees that the Obligations of Company may be extended or
renewed, and the Revolving Credit Loans repaid and reborrowed in whole or in
part, without notice or further assent from it, and that it will remain bound
upon this Guaranty notwithstanding any extension, renewal or other alteration
of any such Obligation or repayment and reborrowing of the Revolving Credit
Loans.
The Guarantor waives presentation of, demand of, payment from and
protest of any Obligation of Company and also waives notice of protest for
nonpayment. The obligations of the Guarantor under this Guaranty shall not
be affected by, and the Guarantor hereby waives its rights (to the extent
permitted by law) in connection with:
(a) the failure of Agent, Collateral Agent or any Lender to assert
any claim or demand or to enforce any right or remedy against Holding,
Company or any Material Domestic Subsidiary under the provisions of this
Agreement or any other agreement or otherwise,
(b) any extension or renewal of any provision thereof,
(c) any increase in the amount of the Obligations,
(d) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Agreement (subject to subsection 10.7)
or any instrument executed pursuant hereto,
(e) the release of any of the security held by Collateral Agent,
Agent or any Lender for the Obligations of Holding, Company or any
Subsidiary,
(f) the failure of Collateral Agent, Agent or any Lender to
exercise any right or
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remedy against any other guarantor of the Obligations of Company,
(g) Collateral Agent, Agent or any Lender taking and holding
security or collateral for the payment of this Guaranty, any other
guaranties of the Obligations or other liabilities of Company and the
Obligations guarantied hereby, and exchanging, enforcing, waiving and
releasing any such security or collateral,
(h) Collateral Agent, Agent or any Lender applying any such
security or collateral and directing the order or manner of sale thereof
as Collateral Agent in its discretion may determine, or
(i) Collateral Agent, Agent or any Lender settling, releasing,
compromising, collecting or otherwise liquidating the Obligations and
any security or collateral therefor in any manner determined by
Collateral Agent, Agent, or such Lender.
The Guarantor further agrees that this Guaranty constitutes a guaranty
of payment when due and not of collection and waives any right to require
that any resort be had by Collateral Agent, Agent or any other Person to any
of the security held for payment of the Obligations of Company or to any
balance of any deposit account or credit on the books of Collateral Agent,
Agent or any other Person in favor of Company or any other Person.
The obligations of the Guarantor under this Guaranty shall not be
subject to any reduction, limitation, impairment or termination for any
reason, including, without limitation, any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense
or set-off, counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality or unenforceability of the Obligations, discharge
of Company from the Obligations in a bankruptcy or similar proceeding or
otherwise. Without limiting the generality of the foregoing, the obligations
of the Guarantor under this Guaranty shall not be discharged or impaired or
otherwise affected by the failure of Collateral Agent, Agent or any Lender to
assert any claim or demand or to enforce any remedy under this Agreement or
any other agreement, by any waiver or modification of any provision thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the Obligations of Company, or by any other act or thing or omission or delay
to do any other act or thing that may or might in any manner or to any extent
vary the risk of the Guarantor or would otherwise operate as a discharge of
the Guarantor as a matter of law or equity.
Collateral Agent may, at its election, foreclose on any security held by
Collateral Agent by one or more judicial or nonjudicial sales, or exercise
any other right or remedy Collateral Agent may have against Holding, Company
or any Subsidiary or any security without affecting or impairing in any way
the liability of the Guarantor hereunder except to the extent the Obligations
have been paid. The Guarantor waives any defense arising out of such
election by Collateral Agent, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy
of the Guarantor against Company or any security, so long as Collateral Agent
have acted in a commercially reasonable manner.
The Guarantor further agrees that this Guaranty shall continue to be
effective or be reinstated,
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as the case may be, if at any time payment, or any part thereof, of principal
of or interest on any Obligation of Company is rescinded or must otherwise be
restored by Agent, Collateral Agent or any Lender upon the bankruptcy or
reorganization of Company or otherwise.
The Guarantor further agrees, in furtherance of the foregoing and not in
limitation of any other right that Agent, Collateral Agent or any Lender may
have at law or in equity against the Guarantor by virtue hereof, upon the
failure of Company to pay any of its Obligations when and as the same shall
become due (whether by required prepayment, declaration, demand or
otherwise), the Guarantor will forthwith pay, or cause to be paid, in cash,
to Agent an amount equal to the sum of the unpaid principal amount of such
Obligations, accrued and unpaid interest on such Obligations and all other
Obligations of Company to Agent, Collateral Agent or such Lender.
So long as any of the Obligations of Company shall remain outstanding
hereunder, Guarantor hereby irrevocably waives any right of subrogation,
contribution, indemnity or otherwise against Company that may arise out of or
be caused by this Guaranty, all rights and/or claims against Company which
may arise against Company by reason of this Guaranty, any right to enforce
any remedy that Lenders now have or may hereafter have against Company and
any benefit of, and any right to participate in, any security now or
hereafter held by Lenders.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon any failure of Company
to pay its Obligations when due (whether by required prepayment, declaration,
demand or otherwise) and consequent acceleration of the Obligations pursuant
to Section 8, each Lender, upon the consent of Agent and Requisite Lenders,
is hereby authorized by Guarantor at any time or from time to time, without
notice to Guarantor or to any other Person, any such notice being hereby
expressly waived to the extent permitted by applicable law, to set off and to
appropriate and to apply any and all deposits (general or special, including,
not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time owing by that Lender to or for the credit or the
account of Guarantor against and on account of the obligations and
liabilities of Guarantor to Lenders under this Guaranty, including but not
limited to, all such obligations and liabilities with respect to all claims
of any nature or description arising out of or connected with this Agreement,
this Guaranty or the Letters of Credit or any of the other Domestic Loan
Documents, irrespective of whether or not Lenders or Agent, with respect to
any Obligation owed under the Letters of Credit or this Agreement, shall have
made any demand hereunder. Each Lender and Agent agrees promptly to notify
Guarantor after any such set-off and application is made by such Lender or
Agent.
Notwithstanding anything contained in this Section 7 to the contrary,
this Guaranty shall not be effective or in full force and effect until the
Closing Date.
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SECTION 8. EVENTS OF DEFAULT
If on or after the Closing Date, any of the following conditions or
events ("Events of Default") shall occur and be continuing:
8.1 Failure to Make Payments when Due
Failure to pay any installment of principal of any Revolving Credit Loan
made hereunder or any Eurocurrency Loan made under any Eurocurrency Credit
Agreement when due, whether at stated maturity, by acceleration, by notice of
prepayment or otherwise; or failure to pay any interest on any Revolving
Credit Loan made hereunder or any Eurocurrency Loan made under any
Eurocurrency Credit Agreement or any other amount due under this Agreement
(including, without limitation, any payment with respect to reimbursement of
amounts drawn under Letters of Credit) or any Eurocurrency Credit Agreement
within three (3) days after the date due; or
8.2 Default in Other Agreements
Failure of Holding, Company or any Subsidiary (excluding Discontinued
Operations) to pay when due (x) any principal or interest on any Indebtedness
(other than Indebtedness referred to in subsection 8.1) in an individual
principal amount of $1,000,000 or more or items of Indebtedness with an
aggregate principal amount of $1,000,000 or more, or (y) any Contingent
Obligation in an individual principal amount of $1,000,000 or more or
Contingent Obligations with an aggregate principal amount of $1,000,000 or
more, in each case beyond the end of any period prior to which the obligee is
prohibited from accelerating payment thereunder; or
Breach or default of Holding or Company or any Subsidiary (excluding
Discontinued Operations) with respect to any other material term of (x) any
evidence of any Indebtedness in an individual principal amount of $1,000,000
or more or items of Indebtedness with an aggregate principal amount of
$1,000,000 or more or any Contingent Obligation in an individual principal
amount of $1,000,000 or more or Contingent Obligations with an aggregate
principal amount of $1,000,000 or more, or (y) any loan agreement, mortgage,
indenture or other agreement relating thereto, with respect to Indebtedness
with an aggregate principal amount of $1,000,000 or more, if, in the case of
either clause (x) or clause (y) of this paragraph, the effect of such
failure, default or breach is then to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation (or a trustee on behalf
of such holder or holders) then to cause, that Indebtedness or Contingent
Obligation to become or be declared due prior to its stated maturity (or the
stated maturity of any underlying obligation, as the case may be); or
8.3 Breach of Certain Covenants
Failure of Holding or Company to perform or comply with any term or
condition contained in subsections 2.5, 5.2 or 5.6 or Section 6 hereunder or
to the extent such subsections are incorporated into Section 4 of the
Eurocurrency Guaranties; or
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8.4 Breach of Warranty
Any representation, warranty, certification or other statement made by
Holding, Company or any Subsidiary in any Loan Document or in any statement
or certificate at any time given by Holding, Company or any Subsidiary in
writing pursuant hereto or in connection herewith shall be false in any
material respect on the date as of which made; or
8.5 Other Defaults Under Agreement or Loan Documents
Holding, Company or any Subsidiary shall default in the performance of
or compliance with any term contained in this Agreement or the other Loan
Documents other than those referred to above in subsections 8.1, 8.3 or 8.4
and such default shall not have been remedied or waived within 20 days after
receipt by Holding or Company or any Subsidiary, as the case may be, of
notice from Agent or Requisite Lenders with respect to Holding or Company or
any Subsidiary, of any such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Holding or Company or any of the
Subsidiaries (excluding Discontinued Operations) in an involuntary case
under the Bankruptcy Code or any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, which decree or order is
not stayed; or any other similar relief shall be granted under any
applicable Federal or state law; or
(ii) an involuntary case is commenced against Holding, Company or any
Subsidiary (excluding Discontinued Operations) under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect;
or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Holding or Company
or any Subsidiary (excluding Discontinued Operations), or over all or a
substantial part of its property, shall have been entered; or the
involuntary appointment of an interim receiver, trustee or other
custodian of Holding or Company or any Subsidiary (excluding
Discontinued Operations) for all or a substantial part of its property;
or the issuance of a warrant of attachment, execution or similar process
against any substantial part of the property of Holding or Company or
any Subsidiary (excluding Discontinued Operations) and the continuance
of any such event in clause (ii) for 30 days unless dismissed, bonded or
discharged; or
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8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Holding or Company or any Subsidiary (excluding Discontinued
Operations) shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case,
under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Holding or any of its Subsidiaries
(excluding Discontinued Operations) shall make any assignment for the
benefit of creditors; or
(ii) the general inability or failure of Holding or Company or any
Subsidiary, or the admission by Holding or Company or any Subsidiary in
writing of its general inability, to pay its debts as such debts become
due; or the Board of Directors of Holding or Company or any Subsidiary
(or any committee thereof) adopts any resolution to approve or otherwise
authorizes any of the actions referred to in clause (i) or this clause
(ii); or
8.8 Judgments and Attachments
Any money judgment, writ or warrant of attachment, or similar process
involving in any individual case an amount in excess of $1,000,000 (exclusive
of any amount which is fully and adequately covered by insurance and with
respect to which the insurer has not disputed in writing its coverage, it
being understood that a reservation of rights is not to be deemed a dispute)
shall be entered or filed against Holding or Company or any Subsidiary
(excluding Discontinued Operations) or any of their respective assets and
shall remain undischarged, unvacated, unbonded or unstayed for a period of 60
days or in any event later than five days prior to the date of any proposed
sale thereunder; or
8.9 Dissolution
Except as permitted by Subsection 6.7, any order, judgment or decree
shall be entered against Holding or Company or any Subsidiary decreeing the
dissolution or split up of Holding or Company or any Subsidiary (excluding
Discontinued Operations) and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
8.10 ERISA
(i) Holding or Company or any of their respective ERISA
Affiliates fails to make full payment when due of all amounts which,
under the provisions of any Pension Plan or Section 412 of the Code,
Holding or Company or any of their respective ERISA Affiliates is
required to pay as contributions thereto;
(ii) Any accumulated funding deficiency occurs or exists,
whether or not waived, with respect to any Pension Plan;
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(iii) The actuarial present value of all benefit
liabilities under all Pension Plans exceeds the fair market value of the
assets of such Pension Plans by an amount which would result in a
material adverse effect on the business or financial condition of
Holding and its Subsidiaries, taken as a whole, if all such Pension
Plans were terminated;
(iv) (A) Any Pension Plan maintained by Holding or
Company or any of their respective ERISA Affiliates shall be terminated
within the meaning of Title IV of ERISA, or (B) a trustee shall be
appointed by an appropriate United States district court to administer
any Pension Plan, or (C) the PBGC (or any successor thereto) shall
institute proceedings to terminate any Pension Plan or to appoint a
trustee to administer any Pension Plan, or (D) Holding or Company or any
of their respective ERISA Affiliates shall withdraw (under Section 4063
of ERISA) from a Pension Plan, or (E) any Termination Event resulting in
any liability of Company or any ERISA Affiliate of Company or (F)
Holding or Company or any of their respective ERISA Affiliates enters
into any transaction which has as its principal purpose the evasion of
liability under subtitle D of Title IV of ERISA; or (G) Company or any
of its ERISA Affiliates engages in any transaction in connection with
which Company or any of its ERISA Affiliates is subject to either a
civil penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Internal Revenue Code;
which events set forth in clauses (i), (ii) or (iv) above would have either
individually or in the aggregate, a material adverse effect on the business
or financial condition of Holding and its Subsidiaries, taken as a whole; or
8.11 Withdrawal Liability Under Multiemployer Plan
Holding or Company or any of their respective ERISA Affiliates as
employer under a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and such employer shall have incurred
a withdrawal liability that is not subject to contest in an amount which
would have a material adverse effect on the business or financial condition
of Holding and its Subsidiaries taken as a whole; or
8.12 Invalidity of Guaranties
(i) Any guaranty of the Obligations, including the
Holding Guaranty, for any reason, other than the satisfaction in full of
all Obligations, ceases to be in full force and effect or is declared to
be null and void, or any guarantor, including Holding, denies that it
has any further liability, including, without limitation, with respect
to future advances by Lenders, under any such guaranty or gives notice
to such effect, except as to any guarantor that is merged, consolidated,
liquidated, wound up, dissolved, sold or otherwise disposed of as
permitted by subsection 6.7; or
(ii) Any guaranty of the obligations under the
Eurocurrency Loan Documents, for any reason, other than the satisfaction
in full of such obligations, ceases to be in full force and effect or is
declared to be null and void, or any guarantor denies that it has any
further liability, including, without limitation, with respect to future
advances by Eurocurrency Lenders, under
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any such guaranty or gives notice to such effect, except as to any
guarantor that is merged, consolidated, liquidated, wound up, dissolved,
sold or otherwise disposed of as permitted by subsection 6.7; or
8.13 Change of Control
(A) Except as otherwise permitted by subsection 6.7B(i), Holding shall
cease to own and control at least 100% of the common stock and 100% of the
voting power of Company entitled to vote for an election of the board of
directors of Company; or (B) individuals who on February 24, 1995 were
members of the board of directors of Holding (together with any new directors
whose election to such board of directors or whose nomination for election by
the stockholders of Holding was approved by a vote of a majority of the
directors then still in office who were either directors on February 24, 1995
or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of such board of directors then
in office; or (C) a "person" or "group" (within the meaning of Section 13(d)
of the Exchange Act), becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of more than 30% of the total issued and
outstanding common stock of Holding; or
8.14 Impairment of Collateral
(A) A judgment creditor of Holding or Company or any Subsidiary shall
obtain possession of any material portion of the Collateral by any means,
including, without limitation, levy, distraint, replevin or self-help, (B)
any substantial portion of the Collateral shall be taken by eminent domain or
condemnation, (C) any of the Collateral Documents or the Eurocurrency
Security Documents shall cease for any reason to be in full force and effect,
or any party thereto shall purport in writing to disavow its obligations
thereunder or shall declare in writing that it does not have any further
obligations thereunder or shall contest the validity or enforceability
thereof or Lenders shall cease to have a valid and perfected first priority
security interest (or a comparable interest under any law governing any
Eurocurrency Security Document or Company Pledge Agreement with respect to
the capital stock of any Foreign Subsidiary) to the extent provided for
therein in any material Collateral covered thereby except as to any
Collateral Document or the Eurocurrency Security Document that is a guaranty
of a guarantor that is merged, consolidated, liquidated, wound up, dissolved,
sold or otherwise disposed of as permitted by subsection 6.7, and except as
to any Collateral that is conveyed, sold, exchanged, leased, subleased,
transferred or otherwise disposed of as permitted by this Agreement or the
Collateral Document or the Eurocurrency Security Document relating thereto,
or (D) Lenders' or Eurocurrency Lenders' security interests or liens on any
material portion of the Collateral under the Collateral Documents or the
Eurocurrency Security Documents, as appropriate, shall become otherwise
impaired or unenforceable, except as to any Collateral that is conveyed,
sold, exchanged, leased, subleased, transferred or otherwise disposed of as
permitted by this Agreement or the Collateral Document or the Eurocurrency
Security Document relating thereto, and except in each case under the
foregoing clauses (A) through (D) as to any Collateral consisting of deposit
accounts; or
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8.15 Eurocurrency Credit Agreement
An Event of Default shall occur and be continuing under any Eurocurrency
Credit Agreement; or
8.16 ERISA Lien
Holding or Company or any of their respective ERISA Affiliates shall
fail to make required contributions when due under Section 412 of the
Internal Revenue Code which results in the imposition of a Lien under Section
412 of the Internal Revenue Code to secure such unpaid contributions in an
aggregate amount in excess of $1,000,000;
THEN (i) upon the occurrence of any Event of Default described in the
foregoing subsections 8.6 or 8.7 with respect to Holding, Company or any
Subsidiary, each of (a) the unpaid principal amount of and accrued interest
on the Revolving Credit Loans, (b) an amount equal to the maximum amount that
may at any time be drawn under all Letters of Credit then outstanding
(whether or not any beneficiary under any Letter of Credit shall have
presented or be entitled to present, the drafts and other documents required
to draw under the Letter of Credit), and (c) all other Obligations, shall
automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Holding and its Subsidiaries, and the obligation of each
Lender to make any Revolving Credit Loan or to issue any Letter of Credit
shall thereupon terminate and (ii) upon the occurrence and during the
continuance of any other Event of Default (including any Event of Default
described in the foregoing subsections 8.6 or 8.7 with respect to any Foreign
Subsidiary), Requisite Lenders may, by written notice to Company, declare all
or any portion of the amounts described in clause (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable,
together with accrued interest thereon, and the obligation of each Lender to
make any Revolving Credit Loan or to issue any Letter of Credit shall
thereupon terminate. So long as any Letter of Credit shall remain
outstanding, any amounts described in clause (b) above with respect to
Letters of Credit, when received by the Issuing Lender, shall be held by the
Issuing Lender, pursuant to such documentation as the Issuing Lender shall
request, as cash collateral for the obligation of Company to reimburse the
Issuing Lender in the event of any drawing under such Letters of Credit, and
so much of such funds shall at all times remain on deposit as cash collateral
as aforesaid as shall equal the maximum amount available at any time for
drawing under all Letters of Credit (the "Maximum Available Amount");
PROVIDED that in the event of cancellation or expiration of any Letter of
Credit or any reduction in the Maximum Available Amount, the Issuing Lender
shall apply the difference between the cash collateral held by the Issuing
Lender immediately prior to such cancellation, expiration or reduction and
the Maximum Available Amount immediately after such cancellation, expiration
or reduction first to the payment of any outstanding Obligations, and SECOND
to the payment to whomsoever shall be lawfully entitled to receive such funds.
Notwithstanding anything contained in the foregoing paragraph, if at any
time within 60 days after acceleration of the maturity of any Revolving
Credit Loan, Holding or Company shall pay all arrears of interest and all
payments on account of the principal which shall have become due otherwise
than by acceleration (with interest on principal and, to the extent permitted
by law, on overdue interest,
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at the rates specified in this Agreement) and all Events of Default and
Potential Events of Default (other than non-payment of principal of and
accrued interest on the Revolving Credit Loans and payments of amounts
referred to clauses (a), (b), and (c) above, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived
pursuant to subsection 10.7, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul the acceleration and its
consequences and return to Company any amounts held pursuant to the cash
collateral arrangement referred to above as cash collateral in respect of the
amounts described in clause (b) above; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon.
SECTION 9. AGENT
9.1 Appointment
NationsBank is hereby appointed sole administrative Agent hereunder by
each Lender and notwithstanding anything contained herein to the contrary,
any Lender designated as "Co-Agent" or "Syndication Agent" shall not have any
authority to act as Agent hereunder or in any other agency capacity. Each
Lender hereby authorizes Agent to act hereunder and under the other
instruments and agreements referred to herein (including, without limitation,
the Collateral Documents to which Agent is party as Collateral Agent) as its
agent hereunder and thereunder. Agent agrees to act as such upon the express
conditions contained in this Section 9 and in such Collateral Documents. The
provisions of this Section 9 are solely for the benefit of Agent and Lenders,
and neither Holding nor any of its Subsidiaries shall have any rights as a
third party beneficiary of any of the provisions of this Section 9, except
with respect to subsections 9.2D, 9.5, 9.6 and 9.7, and provided that Holding
and its Subsidiaries shall be entitled to rely on the appointment of any
Agent or Collateral Agent pursuant hereto and on the exercise of powers and
other actions by such Agent or Collateral Agent hereunder and under the other
instruments and agreements referred to herein (including, without limitation,
such Collateral Documents). In performing its functions and duties under
this Agreement, Agent shall act solely as agent of Lenders and does not
assume and shall not be deemed to have assumed any fiduciary or similar
obligation towards or relationship of agency or trust with or for Holding or
any of its Subsidiaries.
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9.2 Powers; General Immunity
A. DUTIES SPECIFIED. Each Lender irrevocably authorizes Agent to take
such action on such Lender's behalf and to exercise such powers hereunder and
under the other instruments and agreements referred to herein (including,
without limitation, the Collateral Documents) as are specifically delegated
to Agent, by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the
Collateral Documents, and it may perform such duties by or through its agents
or employees. The duties of Agent shall be mechanical and administrative in
nature; Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose
upon Agent any obligations in respect of this Agreement or the other
instruments and agreements referred to herein except as expressly set forth
herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement,
any other Domestic Loan Document or Letters of Credit, or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents in
connection herewith or therewith furnished or made by Agent to Lenders or by
or on behalf of Holding or any of its Subsidiaries to Agent or any Lender or
be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained
herein or therein or as to the use of the proceeds of the Revolving Credit
Loans or the Letters of Credit or of the existence or possible existence of
any Event of Default or Potential Event of Default. Anything contained in
this Agreement to the contrary notwithstanding, Agent shall not have any
liability arising from confirmations of the amount of outstanding Revolving
Credit Loans.
C. EXCULPATORY PROVISIONS. Neither Agent nor any of its officers,
directors, employees or agents shall be liable to Lenders for any action
taken or omitted hereunder or in connection herewith (including, without
limitation, any act or omission under the Collateral Documents) unless caused
by its or their gross negligence or willful misconduct. If Agent shall
request instructions from Lenders with respect to any act or action
(including the failure to take an action) in connection with this Agreement,
Agent shall be entitled to refrain from such act or taking such action unless
and until Agent shall have received instructions from Requisite Lenders, or
unless Agent shall be required by the terms of this Agreement or any
Collateral Document so to act or take such action. Without prejudice to the
generality of the foregoing, (i) Agent shall be entitled to rely, and shall
be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by
the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Holding or any of its Subsidiaries), accountants, experts and
other professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against Agent as a result of Agent acting or
(where so instructed) refraining from acting under this Agreement or the
other instruments and agreements referred to herein in accordance with the
instructions of Requisite Lenders. Agent shall be entitled to refrain from
exercising any power, discretion or authority vested in it under this
Agreement or the other
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instruments and agreements referred to herein unless and until it has
obtained the instructions of Requisite Lenders.
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Revolving Credit Loans,
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and
functions delegated to it hereunder and the term "Lender" or any similar term
used in any Loan Document shall, unless the context clearly otherwise
indicates, include Agent in its individual capacity. Each of Agent and its
Affiliates may accept deposits from, lend money to and generally engage in
any kind of banking, trust, financial advisory or other business with Holding
or any Affiliate of Holding as if it were not performing the duties specified
herein, and may accept fees and other consideration from Holding or any of
its Subsidiaries for services in connection with this Agreement and otherwise
without having to account for the same to Lenders, except as required by
subsection 2.3.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holding and its
Subsidiaries in connection with the making of the Revolving Credit Loans
hereunder and has made and shall continue to make its own appraisal of the
creditworthiness of Holding and its Subsidiaries. Agent shall not have any
duty or responsibility either initially or on a continuing basis to make any
such investigation or any such appraisal on behalf of Lenders or to provide
any Lender with any credit or other information with respect thereto whether
coming into their possession before the making of the Revolving Credit Loans
or any time or times thereafter, and Agent shall not have any responsibility
with respect to the accuracy of or the completeness of the information
provided to Lenders.
9.4 Right to Indemnity
Each Lender, proportionately to its Pro Rata Share of the Revolving
Credit Commitments, severally agrees to indemnify Agent to the extent Agent
shall not have been reimbursed by Holding or its Subsidiaries, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
disbursements and reasonable counsel fees) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against
Agent in performing its duties hereunder in its capacity as Agent, in any way
relating to or arising out of this Agreement; PROVIDED that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or willful misconduct. If any
indemnity furnished to Agent for any purpose shall, in the opinion of Agent,
be insufficient or become impaired, Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished.
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9.5 Registered Persons Treated as Owner
Agent and Holding and its Subsidiaries may deem and treat the Persons
listed as Lenders in the Register as the owner of the corresponding Revolving
Credit Loan listed therein for all purposes hereof unless and until an
assignment is made pursuant to subsection 10.2 and a written notice of the
assignment or transfer thereof shall have been filed with Agent, and recorded
in the Register, and a copy thereof shall have been delivered to Holding.
Any request, authority or consent of any person or entity who, at the time of
making such request or giving such authority or consent, is listed in the
Register as a Lender shall be conclusive and binding on any subsequent
holder, transferee or assignee of the corresponding Revolving Credit Loan.
9.6 Collateral Documents; Appointment of Collateral Agent; Successor
Collateral Agent
Each Lender and Agent hereby appoints NationsBank as Collateral Agent,
and authorizes Collateral Agent, as such agent, to act as such under the
Collateral Documents to which Collateral Agent is party or which are entered
into in favor of Collateral Agent. Each Lender and Agent hereby further
authorizes Collateral Agent to enter into such Collateral Documents on behalf
of and for the benefit of Lenders and Agent and agrees to be bound by the
terms of such Collateral Documents; PROVIDED that, subject to the third
sentence of this subsection 9.6, Collateral Agent shall not enter into or
consent to any amendment, modification, termination or waiver (x) of any
Collateral Document that releases any guarantor or Collateral not otherwise
permitted under this Agreement or such Collateral Document, without the prior
written consent of Lenders required by the fifth sentence of subsection 10.7,
and (y) of any other provision contained in any Collateral Document without
the prior written consent of Agent and Requisite Lenders. Each Lender and
Agent agrees that no Lender or Agent shall have any right individually to
realize upon the security granted by such Collateral Documents, it being
understood and agreed that such rights and remedies may be exercised by
Collateral Agent for the benefit of Lenders and Agent in accordance with the
terms of such agreements. Each Lender and Agent hereby authorize Collateral
Agent, and Collateral Agent hereby agrees, to release Collateral as permitted
or required under this Agreement or such Collateral Documents and to execute
and deliver any certificate, agreement, instrument or other document
necessary or appropriate to effect or evidence such release of Collateral,
and each Lender, Agent and Collateral Agent agree that a certificate
executed, by Collateral Agent evidencing such release of Collateral shall be
conclusive evidence of such release as to any third party. Collateral Agent
shall at all times be the same Person that is Agent. Written notice of
resignation by Agent pursuant to subsection 9.7 shall also constitute notice
of resignation as Collateral Agent; removal of Agent pursuant to subsection
9.7 shall also constitute removal as Collateral Agent; and appointment of a
successor Agent pursuant to subsection 9.7 shall also constitute appointment
of a successor Collateral Agent.
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9.7 Successor Agents
Agent may resign at any time by giving written notice thereof to Lenders
and Company, and Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Agent and signed by Requisite Lenders. Upon any such notice of resignation
or any such removal, Requisite Lenders shall have the right, upon five days
notice to Company, to appoint a successor Agent. If no successor Agent shall
have been so appointed by Requisite Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or Requisite Lenders' removal of the retiring Agent, then upon
five days' notice to Company the retiring Agent may, on behalf of Lenders,
appoint a successor Agent which shall be a Lender, or a commercial bank
organized under the laws of the United States of America or of any State
thereof, or any Affiliate of such bank, having a combined capital and surplus
of at least $500,000,000. Upon the acceptance of any appointment as an Agent
hereunder by a successor Agent, that successor Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of
the retiring or removed Agent, and the retiring or removed Agent shall be
discharged from its duties and obligations as Agent under this Agreement.
After any retiring or removed Agent's resignation or removal hereunder as
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. The resignation by Collateral Agent, removal of Collateral Agent
and appointment of successor Collateral Agent shall be as provided in the
final two sentences of subsection 9.6.
SECTION 10. MISCELLANEOUS
10.1 Representation of Lenders
Each Lender hereby represents that (a) it is a commercial lender or
financial institution, (b) it will make any Revolving Credit Loan for its own
account, (c) subject to subsection 10.2, the disposition of evidence of
Indebtedness held by that Lender shall at all times be within its exclusive
control, and (d) its participation as a Lender hereunder and extension of
credit in respect hereof will not require registration or qualification under
any securities laws.
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10.2 Assignments and Participations in Revolving Credit Loans; Letters
of Credit
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Notwithstanding the provisions of subsection 10.1, each Lender may
assign its rights and obligations under this Agreement and further may
assign, or sell participations in, all or any part of any Revolving Credit
Loan or Revolving Credit Loans made by it or its Commitments or any other
interest herein or in its participation in the Letters of Credit to another
bank or other entity; PROVIDED that (i) no participation or assignment shall,
without the consent of Company, require Company to file a registration
statement or similar document with the Securities and Exchange Commission or
any other regulatory authority or apply to qualify the Revolving Credit Loans
under the blue sky laws of any state; (ii) in the case of an assignment, such
assignment shall (a) be assigned to (x) with the prior written consent of
Agent (which consent shall not be unreasonably withheld), an Eligible
Assignee with the giving of notice to Company and Agent (EXCEPT that if any
such assignment, is made without the consent of Company, Company shall not be
required to pay any amounts to such assignee pursuant to subsections 2.6, 2.7
or 2.8 hereof in excess of the amounts that it would have been required to
pay thereunder to the assigning Lender), or (y) any other Person approved by
Agent and, unless an Event of Default has occurred and is continuing,
Company, which such approvals shall not be unreasonably withheld, and (b) be
assigned pursuant to an assignment agreement substantially in the form of
EXHIBIT VII annexed hereto, (c) if made to a Person other than a Lender, be
in an amount (x) such that the Dollar Equivalent of the assigning Lender's
Revolving Credit Commitment and the commitments under the Eurocurrency Credit
Agreements being assigned is in an aggregate minimum amount of $5,000,000 or
(y) equal to 100% of the assigning Lender's Revolving Credit Commitment and
commitments under the Eurocurrency Credit Agreements if the Dollar Equivalent
of such Lender's Revolving Credit Commitment and commitments under the
Eurocurrency Credit Agreements is less than $5,000,000 in the aggregate, and
(d) unless such assignee is an Eligible Assignee to which the Agent has
provided its prior written consent (which consent shall not be unreasonably
withheld), be on a pro rata basis with the Eurocurrency Credit Agreements so
that the Pro Rata Share of such assignee under this Agreement shall be equal
to the Proportion (as defined in the Eurocurrency Credit Agreements) of such
assignee under the Eurocurrency Credit Agreements, PROVIDED that
notwithstanding anything herein to the contrary, an assignment may be on a
non-pro rata basis with the Eurocurrency Credit Agreements with the consent
of Agent and, unless an Event of Default has occurred and is continuing,
Company, which consent by Company shall not be unreasonably withheld; and
(iii) in the case of a participation, (A) the Lender so participating out its
Revolving Credit Loan shall remain a Lender hereunder and the Person
acquiring such participation shall not become a Lender hereunder, (B) such
Lender's obligations hereunder shall remain unchanged and it shall remain
solely responsible for the performance thereof, (C) all loan parties and
Agent shall continue to deal solely with such Lender in connection with the
relevant Revolving Credit Loan and other related transactions contemplated
hereby, (D) such Lender shall be solely responsible for any withholding taxes
or any filing or reporting requirements relating to such participation and
shall hold harmless Holding, Company, each Subsidiary and Agent and their
respective successors, permitted assigns, employees, officers, directors and
representatives against the same, and (E) the holder of any such
participation, other than an Affiliate of such Lender, shall not be entitled
to require such Lender to take or omit to take any action hereunder except
action directly affecting the extension of the final maturity of the
principal amount of a Revolving Credit Loan or Revolving Credit Commitment or
a reduction of the principal amount of or the decrease in the rate of
interest payable on the Revolving Credit Loans or any fees related thereto.
Each Lender making an assignment described in clause (ii)(a)(y) of the first
proviso in the immediately preceding sentence shall pay to Agent a fee in the
amount of $3,000. In the case of an assignment authorized under this
subsection 10.2, the assignee shall have, to the extent of such
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assignment, the same rights, benefits and obligations as it would if it were
a Lender hereunder, including, without limitation, the right to be considered
a Lender for purposes of the definition of the "Requisite Lenders" and the
obligation to fund Revolving Credit Loans directly to Agent pursuant to
subsection 2.1C, and the assigning Lender shall be relieved of its
obligations hereunder with respect to its Revolving Credit Commitment to the
extent assigned. Company hereby acknowledges and agrees that such assignee
of any Lender shall for all purposes hereunder be considered to be such a
"Lender". In the event of an assignment hereunder the Revolving Credit
Commitments hereunder shall be modified to reflect the Revolving Credit
Commitment of such assignee. Assignments pursuant to this subsection 10.2
shall not be deemed effective hereunder until (i) Agent shall have been paid
any fee required pursuant to this subsection in relation to such assignment
and (ii) if any such assignment occurs while any Revolving Credit Loan is
outstanding, such assignment shall have been recorded by Agent in the
Register as provided in subsection 2.1D. Agent shall no later than five
Business Days following receipt of notice thereof, record assignments
pursuant to this subsection 10.2 in the Register. Each Lender may furnish
any information concerning Holding or any of its Subsidiaries in the
possession of that Lender from time to time to assignees and participants
(including prospective assignees and participants), subject to subsection
10.17.
Notwithstanding the preceding provisions of this subsection 10.2, any
Lender may pledge or assign all or any portion of its rights under this
Agreement to a Federal Reserve Bank as security for borrowings therefrom;
PROVIDED no such pledge or assignment shall release any such Lender from its
obligations hereunder.
Upon its receipt of an assignment agreement substantially in the form of
EXHIBIT VII annexed hereto executed by Lender making the assignment and the
assignee and the Revolving Credit Notes subject to such assignment, Company
shall, within three Business Days after its receipt of such assignment
agreement, execute and deliver to Agent in exchange for the surrendered
Revolving Credit Note a new Revolving Credit Note payable to the order of
such assignee in amount equal to the Revolving Credit Commitment assigned to
such assignee pursuant to such assignment agreement and a new Revolving
Credit Note to the assigning Lender in an amount equal to the portion of the
Revolving Credit Commitment retained by such assigning Lender hereunder, if
any. Such new Revolving Credit Notes shall be (i) in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Revolving
Credit Note, (ii) dated the effective date of such assignment agreement and
(iii) otherwise be in substantially the form of EXHIBIT VIII annexed hereto.
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10.3 Expenses
Whether or not the transactions contemplated hereby shall be
consummated, Holding and Company jointly and severally agree to pay promptly
(i) all reasonable costs of furnishing all opinions by counsel for Holding
and its Subsidiaries (including, without limitation, any opinions reasonably
requested by Agent as to any legal matters arising hereunder), and of
Holding's and its Subsidiaries' performance of and compliance with all
agreements and conditions contained herein on its part to be performed or
complied with, (ii) the reasonable fees, expenses and disbursements of
counsel to Agent in connection with the negotiation, preparation, execution
and administration of this Agreement, the other Domestic Loan Documents, the
Revolving Credit Loans hereunder, and any amendments and waivers hereto,
(iii) all the actual costs and expenses of creating and perfecting Liens in
favor of Lenders contemplated by this Agreement and the other Domestic Loan
Documents, including filing and recording fees and expenses, recording or
similar taxes, reasonable fees and expenses of counsel for providing such
opinions as Agent may reasonably request and reasonable fees and expenses of
legal counsel to Agent, (iv) all reasonable accountable out-of-pocket
expenses (including travel and due diligence expenses) incurred by Agent in
connection with the negotiation and closing of this Agreement, (v) all other
actual and reasonable accountable out-of-pocket expenses incurred by Agent in
connection with the making of the Revolving Credit Loans hereunder and the
issuance of the Letters of Credit and other extensions of credit hereunder,
and (vi) all costs and expenses (including reasonable attorneys' fees and
costs of settlement) incurred by Agent or any Lender in connection with any
work-out or collection of any portion of the Obligations or the enforcement
of any Loan Documents.
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10.4 INDEMNITY
IN ADDITION TO THE PAYMENT OF EXPENSES PURSUANT TO SUBSECTION 10.3,
WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE CONSUMMATED,
HOLDING AND COMPANY JOINTLY AND SEVERALLY AGREE TO INDEMNIFY, PAY AND HOLD
AGENT AND LENDERS, AND THE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND
AFFILIATES OF LENDERS (COLLECTIVELY CALLED THE "INDEMNITEES") HARMLESS FROM
AND AGAINST, ANY AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, AND OUT-OF-POCKET COSTS,
EXPENSES AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH
INDEMNITEES) IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
PROCEEDING COMMENCED OR THREATENED, WHETHER OR NOT SUCH INDEMNITEE SHALL BE
DESIGNATED A PARTY THERETO, THAT MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST THAT INDEMNITEE, IN ANY MANNER RELATING TO OR ARISING OUT OF, THIS
AGREEMENT OR THE OTHER DOMESTIC LOAN DOCUMENTS, LENDERS' AGREEMENT TO MAKE
THE REVOLVING CREDIT LOANS AND OTHER EXTENSIONS OF CREDIT AND LENDERS'
AGREEMENTS TO PURCHASE PARTICIPATIONS THEREIN AS PROVIDED HEREIN, OR THE USE
OR INTENDED USE OF THE PROCEEDS OF ANY OF THE REVOLVING CREDIT LOANS OR OTHER
EXTENSIONS OF CREDIT HEREUNDER OR IN ANY WAY RELATING TO OR RESULTING FROM
THE ACTIONS OR ASSETS OF HOLDING, COMPANY OR ANY OF THEIR RESPECTIVE
SUBSIDIARIES (THE "INDEMNIFIED LIABILITIES"); PROVIDED THAT NEITHER HOLDING
NOR COMPANY SHALL HAVE ANY OBLIGATION HEREUNDER TO ANY LENDER OR ANY OF ITS
RELATED INDEMNITEES WITH RESPECT TO INDEMNIFIED LIABILITIES ARISING FROM THE
FRAUD, GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR WILLFUL BREACH OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OF SUCH LENDER OR ANY OF ITS RELATED
INDEMNITEES, ALL AS DETERMINED BY A FINAL JUDGMENT OF A COURT OF COMPETENT
JURISDICTION (OR A SETTLEMENT TANTAMOUNT TO SUCH A FINAL JUDGMENT). TO THE
EXTENT THAT THE UNDERTAKING TO INDEMNIFY, PAY AND HOLD HARMLESS SET FORTH IN
THE IMMEDIATELY PRECEDING SENTENCE MAY BE UNENFORCEABLE BECAUSE IT IS
VIOLATIVE OF ANY LAW OR PUBLIC POLICY, HOLDING AND COMPANY SHALL EACH
CONTRIBUTE THE MAXIMUM PORTION THAT IT IS PERMITTED TO PAY AND SATISFY UNDER
APPLICABLE LAW, TO THE PAYMENT AND SATISFACTION OF ALL INDEMNIFIED
LIABILITIES INCURRED BY THE INDEMNITEES OR ANY OF THEM.
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10.5 Set Off
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default and consequent acceleration of the Obligations pursuant to
Section 8, each Lender, Eurocurrency Lender, and all Affiliates thereof, upon
the consent of Agent and Requisite Lenders, is hereby authorized by Company
at any time or from time to time, without notice to Company, or to any other
Person, any such notice being hereby expressly waived to the extent permitted
by applicable law, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured but not
including trust accounts) and any other Indebtedness at any time held or
owing by that Person to or for the credit or the account of Company, against
and on account of the obligations and liabilities of Company to Lenders under
this Agreement or the Eurocurrency Credit Agreements or with respect to the
Letters of Credit, including, but not limited to, all such obligations and
liabilities with respect to all claims of any nature or description arising
out of or connected with this Agreement or with respect to the Letters of
Credit or any other Loan Document, irrespective of whether or not that Lender
shall have made any demand hereunder and although said obligations and
liabilities, or any of them, may be contingent or unmatured. Each Lender and
Agent agrees promptly to notify Holding and Company after any such set-off
and application is made by such Lender or Agent.
10.6 Ratable Sharing
Lenders each agree among themselves that if any of them shall, through
the exercise of any right of counterclaim, set-off, banker's lien or
otherwise or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of
the aggregate amount of principal and interest then due with respect to the
Revolving Credit Loans and the amounts payable in respect of the Letters of
Credit held by that Lender, or amounts due to that Lender in respect of
facility fees or commitment fees hereunder (collectively, the "Aggregate
Amounts Due" to such Lender), which is greater than the proportion received
by any other Lender in respect to the Aggregate Amounts Due to such other
Lender, then the Lender receiving such proportionately greater payment shall
(y) notify each other Lender and Agent of such receipt and (z) purchase
participations (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in the Aggregate Amounts Due to the other Lenders so
that all such recoveries of Aggregate Amounts Due shall be shared by Lenders
in proportion to the Aggregate Amounts Due them; PROVIDED that if all or part
of such proportionately greater payment received by such purchasing Lender is
thereafter recovered from such Lender, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to that
Lender to the extent of such recovery, but without interest. Each of Holding
and Company expressly consents to the foregoing arrangement and agrees that
any holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies
owing by Holding or Company to that holder.
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10.7 Amendments and Waivers
To the extent not otherwise expressly provided, no amendment,
modification, termination or waiver of any provision of this Agreement, or
consent to any departure by Holding or any of its Subsidiaries therefrom,
shall in any event be effective without the written concurrence of Requisite
Lenders, Holding and Company; except that any amendment, modification,
termination, or waiver that (i) changes the amount of the Revolving Credit
Commitments or the principal amount of the Revolving Credit Loans or extends
the scheduled maturity thereof; (ii) changes any Lender's Pro Rata Share, the
definition of "Requisite Lenders", or any provision of this Agreement
expressly requiring the approval or concurrence of all Lenders; (iii) extends
the dates on which interest is or fees are payable hereunder, or the maximum
duration of Interest Periods; (iv) changes the provisions contained in
subsections 8.1 or 10.7; or (v) reduces any interest rates payable on the
Revolving Credit Loans or any fees (other than administrative fees) payable
hereunder, each shall be effective only if evidenced by a writing signed by
or on behalf of all Lenders, Agent, Holding and Company; PROVIDED, HOWEVER,
that (A) SCHEDULE 1.1 annexed hereto and the Revolving Credit Commitments and
Pro Rata Shares set forth therein shall be amended from time to time to give
effect to the Revolving Credit Commitment and Pro Rata Share of each new
Lender that becomes a party to this Agreement at the time such Lender becomes
a Lender and (B) any amendment, modification or waiver that changes any
administrative fees, or the times at which such fees are payable, hereunder
shall be effective only if evidenced by a writing signed by or on behalf of
Holding, Company and each Lender affected thereby. For the purposes of
subsection 2.2C, no waiver of any Event of Default and no amendment to this
Agreement shall operate as a cure of any Event of Default unless stated in
writing in such waiver or amendment. To the extent not otherwise expressly
provided, any amendment, modification, termination or waiver of any of the
provisions contained in Section 3 shall be effective only if evidenced by a
writing signed by or on behalf of Agent, Requisite Lenders, Holding and
Company. No amendment, modification, termination or waiver of any provision
of Section 9 hereof shall be effective without the written concurrence of
Agent, Requisite Lenders, Holding and Company. No amendment, modification,
termination, or waiver of any Loan Document that releases any guarantor or
releases any Collateral under a Loan Document not otherwise permitted under
this Agreement or such Loan Document (including but not limited to, as
permitted pursuant to subsection 6.7 or 9.6 of this Agreement) shall be
effective unless evidenced by a writing signed by or on behalf of Lenders
having 80% or more of the combined aggregate amount of the Revolving Credit
Commitments or, in the case of the Revolving Credit Commitments have been
terminated, the outstanding principal amount of the Revolving Credit Loans,
if any, made thereunder. Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Holding or any of its Subsidiaries shall
entitle Holding and Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this subsection 10.7 shall be
binding upon Holding and Company, and each of their respective Subsidiaries.
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10.8 Notices
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing
and may be personally served, telecopied, telexed or sent by United States
mail or courier service and shall be deemed to have been given when delivered
in person, on receipt of telecopy or telex or four Business Days after
depositing it in the United States mail, registered or certified, with
postage prepaid and properly addressed; PROVIDED that notices to Agent shall
not be effective until received. For the purposes hereof, the addresses of
the parties hereto (until notice of a change thereof is delivered as provided
in this subsection 10.8) shall be as set forth under each party's name on the
signature pages hereof.
10.9 Survival of Warranties and Certain Agreements
A. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, and the making of the
Revolving Credit Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements set forth in subsections 2.6, 2.7G, 2.7H, 2.8, 10.3,
10.4 and 10.5, the agreements of Holding set forth in Section 7 (to the
extent set forth therein) and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.5, 10.6 and 10.17 shall survive the payment of the
Revolving Credit Loans and the reimbursement obligations under the Letters of
Credit and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative
No failure or delay on the part of any party hereto in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege. All rights and remedies existing under this Agreement
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.11 Severability
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
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10.12 Obligations Several; Independent Nature of Lenders' Rights
The obligation of each Lender hereunder is several, and no Lender shall
be responsible for the obligation or commitment of any other Lender
hereunder. Nothing contained in this Agreement and no action taken by
Lenders pursuant hereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of entity.
The amounts payable at any time hereunder to each Lender shall be a separate
and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.13 Headings
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.14 Applicable Law
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.15 Successors and Assigns
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and permitted assigns of Lenders. The
terms and provisions of this Agreement shall inure to the benefit of any
permitted assignee of the Revolving Credit Loans, and in the event of such
assignment, the rights and privileges herein conferred upon Lenders shall
automatically extend to and be vested in such assignee, all subject to the
terms and conditions hereof. Neither Holding's or any of its Subsidiaries'
rights nor any interest therein hereunder may be assigned without the written
consent of all Lenders. Lenders rights of assignment are subject to
subsection 10.2.
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10.16 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY OF THE PARTIES HERETO
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OBLIGATION MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN DALLAS,
TEXAS AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH OF THE PARTIES
HERETO ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS
AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT OR
SUCH OBLIGATION; PROVIDED THAT SUCH PARTIES RETAIN ANY RIGHTS TO APPEAL SUCH
JUDGMENT. ALL PARTIES TO THIS AGREEMENT IRREVOCABLY WAIVE ALL RIGHT TO TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OBLIGATION. Each of Holding and Company designates and
appoints Nu-kote International, Inc. with offices at 00000 Xxxxxxx Xxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000, and such other Persons as may hereafter be
selected by Holding and Company irrevocably agreeing in writing to so serve,
as its agent to receive on its behalf service of all process in any such
proceedings in any such court, such service being hereby acknowledged by
Holding and Company to be effective and binding service in every respect. A
copy of any such process so served shall be mailed by registered mail to
Holding and Company at its address provided in the applicable signature page
hereto, except that unless otherwise provided by applicable law, any failure
to mail such copy shall not affect the validity of service of process. If
any agent appointed by Holding and Company refuses to accept service, Holding
and Company hereby agree that service upon it by registered mail shall
constitute sufficient notice. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of
Agent, Collateral Agent or any Lender to bring proceedings against Holding
and each of its Subsidiaries in the courts of any other jurisdiction.
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10.17 Confidentiality
Lenders shall take normal and reasonable precautions to maintain the
confidentiality of all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as such by Holding
or any of its Subsidiaries but may, in any event, make disclosures reasonably
required by any bona fide assignee or participant (or prospective assignee or
participant) in connection with the contemplated assignment of any of the
Revolving Credit Commitments or Revolving Credit Loans or participations
therein or as required or requested by any governmental agency or
representative thereof or as required pursuant to legal process; PROVIDED
that (a) such assignee or participant agrees to comply with the provisions of
this subsection 10.17, (b) such prospective assignee or participant shall
have executed a confidentiality agreement substantially in the form of
EXHIBIT V annexed hereto, (c) unless specifically prohibited by applicable
law or court order, each Lender shall notify Company of any requirement or
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Lender by such governmental agency) and any requirement pursuant to
legal process of or for disclosure of such information, and (d) in no event
shall any Lender be obligated or required to return any materials furnished
by Holding and its Subsidiaries.
10.18 Interest and Charges
It is not the intention of any parties to this Agreement to make an
agreement in violation of the laws of any applicable jurisdiction relating to
usury. Regardless of any provision in any Loan Documents, no Lender shall
ever be entitled to receive, collect or apply, as interest on the
Obligations, any amount in excess of the Maximum Amount. If any Lender or
participant ever receives, collects or applies, as interest, any such excess,
such amount which would be excessive interest shall be deemed a partial
repayment of principal and treated hereunder as such; and if principal is
paid in full, any remaining excess shall be paid to Company. In determining
whether or not the interest paid or payable, under any specific contingency,
exceeds the Maximum Amount, Company and Lenders shall, to the maximum extent
permitted under Applicable Law, (a) characterize any nonprincipal payment as
an expense, fee or premium rather than as interest, (b) exclude voluntary
prepayments and the effect thereof, and (c) amortize, prorate, allocate and
spread in equal parts, the total amount of interest throughout the entire
contemplated term of the Obligations so that the interest rate is uniform
throughout the entire term of the Obligations; provided, however, that if the
Obligations are paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period
of existence thereof exceeds the Maximum Amount, Lenders shall refund to
Company the amount of such excess or credit the amount of such excess against
the total principal amount of the Obligations owing, and, in such event,
Lenders shall not be subject to any penalties provided by any laws for
contracting for, charging or receiving interest in excess of the Maximum
Amount. This Section shall control every other provision of all agreements
pertaining to the transactions contemplated by or contained in the Loan
Documents.
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10.19 Amendment, Restatement, Extension, Renewal and Increase
This Agreement is a renewal, extension, amendment and restatement and,
as such, except for the "Obligations" as defined in the First Restatement
(which shall survive and shall be renewed, extended, increased and restated
by the terms of this Agreement), all other terms and provisions of this
Agreement supersede in their entirety the First Restatement. All Liens
created under the Collateral Documents shall remain valid, binding and
enforceable Liens against the Persons which granted such Liens.
10.20 Counterparts; Effectiveness
This Agreement and any amendments, waivers, consents, or supplements may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but
one and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt
of written or telephonic notification of such execution and authorization of
delivery thereof by Holding, Company and Agent.
Holding and Company hereby acknowledge and agree that on and after the
Closing Date, each reference in the Loan Documents to the "Credit Agreement",
"thereunder", "thereof' and words of like import referring to the Credit
Agreement shall mean and be a reference to this Agreement.
10.21 Waivers
Holding and Company each hereby expressly acknowledge and agree that, as
of the Closing Date, neither of them has any setoffs, counterclaims,
adjustments, recoupments, defenses, claims or actions of any character,
whether contingent, non-contingent, liquidated, unliquidated, fixed, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured,
known or unknown, against any Lender, the Agent, the Documentation Agent, or
the Collateral Agent or any grounds or cause for reduction, modification or
subordination of the Obligations or any liens or security interests of any
Lender, the Agent, the Documentation Agent, or the Collateral Agent. To the
extent Holding or the Company possesses, as of the Closing Date, any such
setoffs, counterclaims, adjustments, recoupments, claims, actions, grounds or
causes, each of Holding and the Company hereby waives, and hereby releases
each Lender, the Agent, the Documentation Agent, or the Collateral Agent
from, any and all of such setoffs, counterclaims, adjustments, recoupments,
claims, actions, grounds and causes, such waiver and release being with full
knowledge and understanding of the circumstances and effects of such waiver
and release and after having consulted counsel with respect thereto. Company
hereby acknowledges that it is indebted to Lenders with respect to Revolving
Credit Loans in the principal amount of $92,000,000 on the date hereof and
that Letters of Credit in the aggregate amount of $275,000 are outstanding on
the date hereof.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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-106-
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
NU-KOTE INTERNATIONAL, INC.,
as Borrower
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
Nu-kote International, Inc.
Suite 690, LB 21
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Treasurer
NU-KOTE HOLDING, INC.,
as Guarantor
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
Xx-xxxx Xxxxxxx, Xxx.
Xxxxx 000, XX 21
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Treasurer
NATIONSBANK OF TEXAS, N.A.
as a Lender and as
Administrative Agent and
Collateral Agent
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx, XX
Senior Vice President
BARCLAYS BANK PLC,
as a Lender and as Documentation Agent
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
Barclays Bank PLC
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
COMMERZBANK AKTIENGESELLSCHAFT
ATLANTA AGENCY
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
Commerzbank Aktiengesellschaft
Atlanta Agency
Promenade Two, Suite 3500
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
CREDIT LYONNAIS, NEW YORK BRANCH
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
Credit Lyonnais
1301 Avenue of the Xxxxxxxx,
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
The First National Bank of Chicago
One First Xxxxxxxx Xxxxx, Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
SOCIETE GENERALE
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
Societe Generale
Xxxxxxxx Xxxx Center, Suite 4800
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
FIRST AMERICAN NATIONAL BANK
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
First American National Bank
4th & Union Street AA-0310,
10th Floor
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
DEUTSCHE BANK, A.G., NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
Deutsche Bank, A.G., New York Branch
and/or Cayman Islands Branch
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
ABN AMRO BANK, N.V.
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Notice Address:
ABN AMRO Bank, N.V.
00 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
SCHEDULE 1.1
LENDER'S ORIGINAL COMMITMENTS
AND PRO RATA SHARES
NATIONSBANK OF TEXAS, N.A.
Revolving Credit Loan Commitment: $24,716,667.00
Pro Rata Share of Revolving Credit Commitment: 24.7166667%
BARCLAYS BANK PLC
Revolving Credit Loan Commitment: $14,000,000.00
Pro Rata Share of Revolving Credit Commitment: 14.00%
COMMERZBANK AKTIENGESELLSCHAFT ATLANTA AGENCY
Revolving Credit Loan Commitment: $10,000,000.00
Pro Rata Share of Revolving Credit Commitment: 10.00%
CREDIT LYONNAIS, NEW YORK BRANCH
Revolving Credit Loan Commitment: $6,550,000.00
Pro Rata Share of Revolving Credit Commitment: 6.55%
THE FIRST NATIONAL BANK OF CHICAGO
Revolving Credit Loan Commitment: $10,000,000.00
Pro Rata Share of Revolving Credit Commitment: 10.00%
SOCIETE GENERALE
Revolving Credit Loan Commitment: $9,850,000.00
Pro Rata Share of Revolving Credit Commitment: 9.85%
DEUTSCHE BANK, A.G., NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
Revolving Credit Loan Commitment: $10,000,000.00
Pro Rata Share of Revolving Credit Commitment: 10.00%
ABN AMRO BANK, N.V.
Revolving Credit Loan Commitment: $6,550,000.00
Pro Rata Share of Revolving Credit Commitment: 6.55%
FIRST AMERICAN NATIONAL BANK
Revolving Credit Loan Commitment: $8,333,333.00
Pro Rata Share of Revolving Credit Commitment: 8.3333333%
