EXHIBIT 10(t)(iv)
WAIVER AGREEMENT & LEASE AMENDMENT
WAIVER AGREEMENT AND LEASE AMENDMENT (the "Waiver Agreement"), made as of
this 7th day of June, 1999, between INK (AL) QRS 12-21, INC., an Alabama
corporation ("Landlord"), with an address c/o W.P. Xxxxx & Co., Inc., 00
Xxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and QMS INC., a Delaware
corporation ("Tenant"), with an address at Xxx Xxxxxx Xxxx, Xxxxxx, Xxxxxxx
00000.
WITNESSETH
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WHEREAS, Landlord and Tenant entered into a Lease Agreement made as of the
18th day of February, 1997, (the "Lease Agreement"), for certain property
located in Mobile County, Alabama (the "Leased Premises");
WHEREAS, the Lease Agreement provides for the payment of rents by Tenant to
Landlord and for Tenant's compliance with certain financial covenants;
WHEREAS, Tenant desires to exercise a purchase option (the "Purchase
Option") Tenant has to re-acquire QMS Europe B.V. and QMS Australia Pty Ltd
(together the "Affiliated Companies");
WHEREAS, Tenant desires to enter into certain strategic and financial
relationships (the "Minolta Transaction") with Minolta Co., Ltd. ("Minolta") as
attached hereto as Exhibit A;
WHEREAS, Tenant intends to enter into a certain banking relationship (the
"Debt Transaction") by July 31, 1999 (the "Credit Facility");
WHEREAS, Tenant anticipates the Tenant will not be in compliance with a
certain financial covenant because of the Minolta Transaction and/or the Debt
Transaction;
WHEREAS, Tenant prepaid certain rent in the amount of $1,300,000 (the
"Prepaid Rent") pursuant to a Waiver Agreement dated December 8, 1997, and was
to have such Prepaid Rent applied to future rent payments due on December 1,
1998 through September 7, 1999;
WHEREAS, Tenant and Landlord subsequently agreed that the Prepaid Rent was
to be applied to the rent payments due from Tenant on December 1, 1999; March 1,
2000; and June 1, 2000; and the balance of $32,968.75 applied against the rent
payment due from Tenant on September 1, 2000.
In consideration of the rents and provisions herein stipulated to be paid
and performed, Landlord and Tenant hereby covenant and agree as follows:
1. Prepaid Rent
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Tenant shall provide Landlord with a security deposit in the amount of
$1,300,000 (the "Security Deposit"). The prepaid Rent shall be applied
to fund the Security Deposit.
The Security Deposit shall be released back to Tenant at such time as
Tenant achieves a credit rating of BB or Ba2 from S&P ("Required
Rating") or Xxxxx'x, respectively, so long as, if at the time Tenant
achieves the Required Rating Tenant has a split credit rating, the
split is not greater than one notch. For example, if Tenant's credit
ratings are BB and Ba1, the Security Deposit shall not be released. If
the latter is Baa3 and the former remains BB, the Security Deposit
shall be released to Tenant.
Tenant shall continue to pay rent in accordance with the Lease
Agreement, including the periods for which the Prepaid Rent was
previously to be applied (i.e., December 1, 1999; March 1, 2000; and
June 1, 2000; and the partial payment due on September 1, 2000).
2. Financial Covenant (Exhibit G) Amendments.
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A) Upon full execution of this Waiver Agreement and the attached
lender consent form, Paragraph 6 of the financial covenants
specified in Exhibit G of the Lease Agreement shall be modified
as follows:
From the date hereof until December 31, 1999; Tenant's Debt to
Equity Ratio ("the Ratio") shall not exceed of 1.25:1.00. From
January 1, 2000 through December 31, 2001, Tenant's Ratio shall
not exceed 1.0:1.0. From January 1, 2002 through December 31,
2002, Tenant's Ratio shall not exceed .75:1.00. Thereafter,
Tenant's Ratio shall not exceed .50:1.0. If Tenant's Ratio
exceeds the applicable ratios during the applicable time period,
an Event of Default shall exist under the Lease Agreement. This
test shall be a quarterly test. That is, on the last day of each
quarter during the above time periods, Tenant must be in
compliance with the related ratio.
B) The following covenant shall be added as Section 9 to Exhibit G:
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"9.
If Minolta, its affiliates, related parties, successors or
assigns, together or individually, acquire or control more than
66.6% of Tenant's outstanding common stock, an Event of Default
shall exist under the Lease Agreement."
3. Execution of Counterparts.
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This Waiver Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts each of
which, when so executed, shall be deemed an original, but all
counterparts shall constitute but one and the same instrument.
4. Other.
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A) This Waiver Agreement is conditional upon (a) the consummation of
the Minolta Transaction, excluding the Tender Offer described
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therein, by no later than June 18, 1999; (b) the consummation of
the Tender Offer described in the Minolta Transaction no later
than October 1, 1999; and (c) Lessee's receipt of fully-executed
documents associated therewith.
B) Tenant represents and warrants that all loans, credit facilities
and similar borrowings of Affiliated Companies ("Affiliate
Borrowings") are and will remain non recourse to Tenant.
C) Tenant, shall no later than 30 days from the date hereof, shall
provide Landlord with executed copies of all documentation
associated to the Minolta Transaction and Affiliated Borrowings.
D) Tenant will pay all costs of Landlord's counsel within five days
of receipt of invoice.
Additionally, not later than 30 days following Tenant's closing of the
Debt Transaction, Tenant shall provide Landlord with copies of all
documents associated therewith.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Waiver Agreement
to be duly executed as of the day and year first above written.
LANDLORD:
INK (AL) QRS 12-21, INC. an Alabama
corporation
By: /s/ [ILLEGIBLE]
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Title: First Vice President
TENANT:
QMS, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Title: President
CONSENT
Creditanstalt Bankverein, an Austrian banking corporation, as Assignee,
pursuant to the Assignment of Rentals and Leases dated February 18, 1997,
recorded in Real Property Book 4441, page 0693, in the records in the Office of
the Judge of Probate for Mobile County, Alabama, does hereby consent to terms
and conditions of the Waiver Agreement made as of June 7, 1999, between INK (AL)
QRS 12-21, Inc. and QMS, Inc.
Consent given this 7 day of June, 1999.
CREDITANSTALT BANKVEREIN
By: /s/ Xxxxx Xxxx
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Title: VP
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Xxxxx Xxxx
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/s/ Xxxx X. Xxxxxxxx
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Associate
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Xxxx X. Xxxxxxxx
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EXHIBIT A
as of 99/06/17 15:07
Summary of Terms
1. Proposed Acquisition Credit Facility - Term Loan
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Borrower: QMS Inc., a Delaware corporation
Lender: Minolta Co., Ltd., a Japanese corporation or affiliate
("Minolta")
Amount: $12,800,000
Term: Four (4) year
Amortization: Year 1: No amortization
Year 2 - 4: Equal monthly installments (355,500 x 35 +
357,500 x 1)
Purpose: To finance the acquisition of QMS Europe B.V. ("BV") and
QMS Australia Pty. Ltd. ("Australia"), to pay fees and
expenses and to refinance existing Foothill Capital
Corporation Credit Facility.
Security: Pledge of capital stock of BV and Australia
Interest: Thirty (30) day LIBOR + 2.50% payable monthly in arrears
Intercreditor issues: Pari pasu with secured working capital facility which
facility shall be on terms reasonably acceptable to
Minolta
Change of Control: Mandatory prepayment upon change of the control of
Borrower (other than Minolta)
Closing: Conditioned upon and simultaneous with acquisition of BV
and Australia
2. Proposed Purchase of Common Stock
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Issue: Common stock, par value $.01 per share, of QMS, Inc.
Purchaser: Minolta Co., Ltd. or wholly-owned subsidiary
Amount: 19.9% of outstanding QMS common stock (approximately 2.129
million shares)
Purchase Price: $5.75 per share (aggregate price of approximately $12.24
million)
Purpose: To finance acquisition of BV and Australia and to pay
related fees and expenses and to refinance existing
Foothill Capital Corporation Credit Facility
Closing: Conditioned upon and simultaneous with acquisition of BV
and Australia
Shareholder rights: Amendment of Rights Plan to exclude Minolta from
definition of "Acquiring Person"
Board of Directors: 2 Minolta designees to be added upon closing
3. Proposed Tender Offer
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Purchaser: Minolta Co., Ltd or wholly-owned subsidiary
Securities: Common stock, par value $.01 per share, of QMS, Inc.
Price: To be determined but not less than $6.25 per share
Amount: Number of shares necessary for Minolta to own 51% of shares on a
fully-diluted basis (approximately 5.43 million) or such other
amount reasonably determined by Minolta
Board of Directors: 9 directors: 5 designated by Minolta
2 members of management
2 outside directors
