FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is
dated as of August 31, 1998 and entered into by and among XXXX GRAPHIC
SYSTEMS, INC., a corporation organized under the laws of the State of
Delaware ("COMPANY") and whose registered office is at 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000, XXXX GRAPHIC SYSTEMS LIMITED (Company Number
3212468), a company organized under the laws of England ("XXXX UK") and whose
registered office is at Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx XX0 0XX, XXXX
SYSTEMES GRAPHIQUES NANTES, S.A., a SOCIETE ANONYME organized under the laws
of the Republic of France ("XXXX FRANCE") and whose registered office is at
00, xxx xx Xxxxxx, 00000 Xxxxxx, XXXX GRAPHIC SYSTEMS JAPAN CORPORATION, a
corporation organized under the laws of Japan ("XXXX JAPAN"; and together
with Company, Xxxx UK and Xxxx France, the "BORROWERS") and whose registered
office is at Mitsuya Xxxxxxxxx Xxxxxxxx, 00-00 Xxxxxxxxx 0-Xxxxx, Xxxxxx-Xx,
Xxxxx 000, THE FINANCIAL INSTITUTIONS ACTING AS LENDERS AND LISTED ON THE
SIGNATURE PAGES HEREOF, THE FINANCIAL INSTITUTIONS ACTING AS INDEMNIFYING
LENDERS AND LISTED ON THE SIGNATURE PAGES HEREOF, BANKERS TRUST COMPANY, as
administrative agent for the Lenders (in such capacity, "ADMINISTRATIVE
AGENT") and whose registered office is at One Bankers Trust Plaza, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and CREDIT SUISSE FIRST BOSTON
("CSFB"), as syndication agent for Lenders (in such capacity, "SYNDICATION
AGENT") and whose offices are at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
and, for purposes of Section 4 hereof, the Credit Support Parties (as defined
in Section 4 hereof) listed on the signature pages hereof, and is made with
reference to that certain Amended and Restated Multicurrency Credit Agreement
dated as of January 29, 1998, by and among Borrowers, Lenders, Indemnifying
Lenders, Administrative Agent, Syndication Agent and certain other parties
(the "CREDIT AGREEMENT"). Capitalized terms used herein without definition
shall have the same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Borrower and Lenders desire to amend the Credit
Agreement to permit each of Company and its Subsidiaries to change its Fiscal
Year-end from September 30 to December 31; and
WHEREAS, Borrowers and Lenders also desire to amend the Credit
Agreement to (i) amend certain of the defined terms contained therein, (ii)
amend certain of the financial covenants contained therein, and (iii) make
certain other amendments, all as more specifically set forth herein:
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto
agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1
1.1 AMENDMENTS TO SECTION 1: PROVISIONS RELATING TO DEFINED
TERMS.
A. Amendments to Existing Definitions. Subsection 1.1 of the
Credit Agreement is hereby amended as follows: the definitions "Applicable Base
Rate Margin", "Applicable Offshore Rate Margin", "Consolidated Adjusted EBITDA"
and "Fiscal Year" are each hereby amended by deleting each definition in its
entirety and substituting the following therefor:
"'APPLICABLE BASE RATE MARGIN' means, as of any date of
determination, a percentage per annum as set forth below opposite
the applicable Consolidated Leverage Ratio:
CONSOLIDATED LEVERAGE RATIO APPLICABLE BASE RATE MARGIN
--------------------------- ---------------------------
greater than or equal to 6.75:1.00 1.75%
less than 6.75:1.00 1.50%
but greater than or equal to 5.75:1.00
less than 5:75:1.00 1.25%
but greater than or equal to 4.50:1.00
less than 4.50:1.00 1.00%
but greater than or equal to 3.50:1.00
less than 3.50:1.00 0.75%
but greater than or equal to 3.00:1.00
less than 3.00:1.00 0.50%
but greater than or equal to 2.50:1.00
less than 2.50:1.00 0.25%
but greater than or equal to 2.00:1.00
less than 2.00:1.00 0.00%
; PROVIDED that until adjusted in accordance with the provisions of
subsection 2.2A, the Applicable Base Rate Margin shall be 1.75% per annum
effective on the First Amendment Effective Date.
`APPLICABLE OFFSHORE RATE MARGIN' means, as of any date of
determination, a percentage per annum as set forth below opposite
the applicable Consolidated Leverage Ratio:
CONSOLIDATED LEVERAGE RATIO APPLICABLE OFFSHORE RATE MARGIN
--------------------------- -------------------------------
greater than or equal to 6.75:1.00 2.75%
2
CONSOLIDATED LEVERAGE RATIO APPLICABLE OFFSHORE RATE MARGIN
--------------------------- -------------------------------
less than 6.75:1.00 2.50%
but greater than or equal to 5.75:1.00
less than 5:75:1.00 2.25%
but greater than or equal to 4.50:1.00
less than 4.50:1.00 2.00%
but greater than or equal to 3.50:1.00
less than 3.50:1.00 1.75%
but greater than or equal to 3.00:1.00
less than 3.00:1.00 1.50%
but greater than or equal to 2.50:1.00
less than 2.50:1.00 1.25%
but greater than or equal to 2.00:1.00
less than 2.00:1.00 1.00%
; PROVIDED that until adjusted in accordance with the provisions of
subsection 2.2A, the Applicable Offshore Rate Margin shall be 2.75% per
annum effective on the First Amendment Effective Date.
`CONSOLIDATED ADJUSTED EBITDA' means, for any period, (a)
the sum, without duplication, of the amounts for such period of
(i) Consolidated Net Income, (ii) Consolidated Interest Expense,
(iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, (vi)
expenses related to the RGS Customer Notes, (vii) for any period
including December 31, 1998 only, salary and workforce reductions
in an amount not to exceed $6,500,000, which reductions shall take
place no later than December 31, 1998, and (viii) other non-cash
items reducing Consolidated Net Income LESS (b) the sum, without
duplication, of the amounts for such period of (i) income related
to the RGS Customer Notes and (ii) other non-cash items increasing
Consolidated Net Income, all of the foregoing determined on a
consolidated basis for Company and its Subsidiaries in conformity
with GAAP.
`FISCAL YEAR' means the fiscal year of Company and its
Subsidiaries ending on September 30 of each calendar year;
PROVIDED that, upon due and proper authorization by the boards of
directors of Company and its Subsidiaries, Company and its
Subsidiaries may change their Fiscal Year-end from September 30 to
December 31 commencing with the fifteen-month Fiscal Year ending
December 31, 1999."
3
B. AMENDMENTS TO EXISTING DEFINITIONS. Subsection 1.1 of the
Credit Agreement is hereby further amended as follows:
(i) by deleting the "." at the end of the definition of
"CONSOLIDATED INTEREST EXPENSE" and substituting the following
therefor:
"; PROVIDED FURTHER that with respect to discounts
relating to sales of Accounts, which sales are off-balance
sheet and non-recourse to Company and its Subsidiaries, such
discounts shall be included in the definition of `Consolidated
Interest Expense' for purposes of this Agreement."
(ii) by (x) deleting the reference to "and" immediately prior to
clause (iii) of the proviso contained therein and (y) deleting the
"." at the end of the definition of "ASSET SALE" and substituting
the following therefor:
", and (iv) the sale of Accounts, notes and other
evidences of Indebtedness, whether secured or unsecured, which
sale is non-recourse to Company and its Subsidiaries, in each
case in the ordinary course of business and consistent with the
past practices of Company and its Subsidiaries as part of a
governmental sponsored or private agency export credit program."
(iii) by adding the following sentence to the end of the
definition of "INVESTMENT":
"The definition of `Investment' shall not include any
Indebtedness or Accounts that are current assets and that arose
from sales of goods and services in the ordinary course of
business and consistent with the past practices of Company and its
Subsidiaries."
C. ADDITION OF NEW DEFINITIONS. Subsection 1.1 of the Credit
Agreement is hereby further amended by adding thereto the following definitions
which shall be inserted in proper alphabetical order:
"'ACCOUNT' means, with respect to any Person, all present and
future rights of such Person to payment for goods sold or leased
or for services rendered (except those evidenced by instruments or
chattel paper), whether now existing or hereafter arising and
wherever arising, and whether or not they have been earned by
performance.
`ELIGIBLE ACCOUNTS RECEIVABLE VALUE' means, with respect to a
Person, the book value of all Accounts of such Person which may be
properly classified as accounts receivable in conformity with GAAP
LESS customary reserves for returns, discounts, deductions,
claims, credits, charges or other customary allowances in
conformity with GAAP.
4
`ELIGIBLE INVENTORY VALUE' means, with respect to a Person, the
gross book value of all Inventory of such Person which may be
properly classified as inventory in conformity with GAAP LESS
customary reserves for damaged, obsolete or worn-out goods, goods
returned by customers or other customary allowances in conformity
with GAAP.
`FIRST AMENDMENT EFFECTIVE DATE' means the date on which that
certain First Amendment to Credit Agreement dated as of August 31,
1998 by and among Borrowers, Lenders, Indemnifying Lenders,
Administrative Agent and Syndication Agent becomes effective in
accordance with its terms, which date shall be no later than
September 18, 1998.
`INVENTORY' means, with respect to any Person, all goods,
merchandise and other personal property which are held by such
Person for sale or lease, including those held for display or
demonstration, including without limitation raw materials, works
in progress, finished goods and spare parts.
`YEAR 2000 PROBLEM' means any significant risk that computer
hardware, software or equipment containing embedded microchips
essential to the business or operations of Company or any of its
Subsidiaries will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as
effectively and reliably as in the case of times or time periods
occurring before January 1, 2000, including the making of accurate
leap year calculations."
1.2 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS
AND LOANS.
Subsection 2.2A of the Credit Agreement is hereby amended by
deleting the reference to "the Applicable Base Rate Margin, the Applicable
Offshore Rate Margin and" contained in the last sentence of such subsection
2.2A.
1.3 AMENDMENTS TO SECTION 6: BORROWERS' AFFIRMATIVE COVENANTS.
Section 6 of the Credit Agreement is hereby amended by adding at
the end of said Section 6 a new subsection 6.11 as follows:
"6.11 YEAR 2000 COVENANT.
Each Borrower has reviewed, or will expeditiously review,
its operations and those of its Subsidiaries with a view to
assessing whether its businesses, or the businesses of any of its
Subsidiaries, will be vulnerable to a Year 2000 Problem or to the
effects of a Year 2000 Problem suffered by any of Company's or any
of its Subsidiaries' major commercial counter-parties. Each
Borrower shall take all actions necessary and commit adequate
resources
5
to assure that its computer-based and other systems (and those
of all Subsidiaries) are able to effectively process data,
including dates before, on and after January 1, 2000, without
experiencing any Year 2000 Problem that could cause a Material
Adverse Effect. At the request of Administrative Agent, each
Borrower will provide Administrative Agent with assurances and
substantiations (including without limitation the results of
internal or external audit reports prepared in the ordinary
course of business) reasonably acceptable to Administrative
Agent as to the capability of each Borrower and its
Subsidiaries to conduct its and their businesses and operations
before, on and after January 1, 2000 without experiencing a
Year 2000 Problem causing a Material Adverse Effect. Each
Borrower represents and warrants that it has a reasonable basis
to believe that no Year 2000 Problem will cause a Material
Adverse Effect."
1.4 AMENDMENTS TO SECTION 7: BORROWERS' NEGATIVE COVENANTS.
A. INDEBTEDNESS. Subsection 7.1(ix) of the Credit Agreement
is hereby amended by deleting the reference to "$7,500,000" contained therein
and substituting "$25,000,000" therefor.
B. CONTINGENT OBLIGATIONS. Subsection 7.4 of the Credit
Agreement is hereby amended as follows:
(i) by deleting the reference to "$10,000,000" contained in
clause (iii) of said subsection 7.4 and substituting "$20,000,000"
therefor; and
(ii) by (x) deleting the reference to "and" immediately prior to
subclause (c) contained therein and (y) deleting the ";" at the
end of clause (ix) of said subsection 7.4 and adding the following
therefor:
"; and (d) may become and remain liable with respect to the
sale of Accounts, notes and other evidences of Indebtedness,
whether secured or unsecured, which sale is non-recourse to
Company and its Subsidiaries, in each case in the ordinary course
of business and consistent with the past practices of Company and
its Subsidiaries as part of a government sponsored or private
agency export credit program, so long as such liability relates
only to interest rate changes between the time of the origination
of such Indebtedness and its repayment and to Company's and its
Subsidiaries' title to the Indebtedness being sold, its or their
authority to enter into sale transactions, and other
representations and warranties (other than with respect to the
obligor's repayment of Indebtedness) as are customary for such
sale transactions;"
C. RESTRICTED JUNIOR PAYMENTS. Subsection 7.5 of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting the
following therefor:
6
"7.5 RESTRICTED JUNIOR PAYMENTS.
No Borrower shall nor shall any Borrower permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make
or set apart any sum for any Restricted Junior Payment; PROVIDED
that (i) Company may make payments of regularly scheduled interest
in respect of the Senior Subordinated Notes, in accordance with
the terms of and to the extent required by, and subject to the
subordination provisions contained in, the Senior Subordinated
Note Indenture; (ii) Company may make repurchases of Senior
Subordinated Notes in an aggregate amount not to exceed
$25,000,000 (including principal, interest, premiums, fees and
other expenses) so long as (x) no Event of Default or Potential
Event of Default shall have occurred and be continuing or shall be
caused thereby and (y) the Consolidated Leverage Ratio, after
giving PRO FORMA effect to such repurchases and any Indebtedness
incurred in connection therewith, for the immediately preceding
four consecutive Fiscal Quarter period prior to such date of
determination does not exceed 3.00:1.00; and (iii) so long as (x)
no Event of Default or Potential Event of Default shall have
occurred and be continuing or shall be caused thereby and (y) the
Consolidated Leverage Ratio for the immediately preceding four
consecutive Fiscal Quarter period prior to such date of
determination does not exceed 3.00:1.00, Company may make
Restricted Junior Payments to Holdings (X) in an aggregate amount
not to exceed $500,000 in any Fiscal Year (PROVIDED that, in the
event Company changes its Fiscal Year-end from September 30 to
December 31, then for such fifteen-month Fiscal Year such
aggregate amount shall not exceed $625,000) in order to permit
Holdings to pay general administrative costs and expenses, (Y) in
an aggregate amount not to exceed in the aggregate $1,000,000 in
any Fiscal Year (PROVIDED that, in the event Company changes its
Fiscal Year-end from September 30 to December 31, then for such
fifteen-month Fiscal Year such aggregate amount shall not exceed
$1,250,000; PROVIDED FURTHER that the unused portion of such
$1,000,000 (or $1,250,000 for such fifteen-month Fiscal Year) may
be carried forward to the succeeding Fiscal Year, but only to an
aggregate amount not to exceed $2,000,000 of such Restricted
Junior Payments for any given Fiscal Year (or $2,500,000 for such
fifteen-month Fiscal Year)) or $5,000,000 during the term of this
Agreement PLUS the net cash proceeds of any issuance of Holdings
Common Stock to Management Investors and other officers and
employees of Company and its Subsidiaries in accordance with the
terms of the Stockholders Agreement and the Management Investment
Incentive Plan, which net cash proceeds have been contributed to
Company, and (Z) in an amount necessary to permit Holdings to
discharge the consolidated tax liabilities of Holdings, Company
and Company's Subsidiaries, in each case so long as Holdings
applies the amount of any such Restricted Junior Payment for such
purpose."
7
D. MINIMUM FIXED CHARGE RATIO. Subsection 7.6A of the Credit
Agreement is hereby amended by deleting the table contained therein in its
entirety and substituting the following therefor:
" PERIOD MINIMUM FIXED CHARGE RATIO
--------------- --------------------------
September 30, 1998 0.80:1.00
December 31, 1998 0.80:1.00
March 31, 1999 0.95:1.00
June 30, 1999 1.20:1.00
September 30, 1999 1.20:1.00
December 31, 1999 1.40:1.00
March 31, 2000 1.40:1.00
June 30, 2000 1.40:1.00
September 30, 2000 1.40:1.00
December 31, 2000 1.50:1.00
March 31, 2001 1.50:1.00
June 30, 2001 1.50:1.00
September 30, 2001 1.50:1.00
December 31, 2001 1.50:1.00
March 31, 2002 1.50:1.00
June 30, 2002 1.50:1.00
September 30, 2002 1.50:1.00
December 31, 2002 1.50:1.00"
E. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Subsection 7.6B of
the Credit Agreement is hereby amended by deleting the table contained therein
in its entirety and substituting the following therefor:
MAXIMUM CONSOLIDATED
" PERIOD LEVERAGE RATIO
------------- --------------------
September 30, 1998 9.75:1.00
December 31, 1998 9.00:1.00
March 31, 1999 7.75:1.00
June 30, 1999 6.10:1.00
September 30, 1999 6.10:1.00
December 31, 1999 5.35:1.00
March 31, 2000 4.75:1.00
June 30, 2000 4.75:1.00
September 30, 2000 4.75:1.00
December 31, 2000 4.75:1.00
March 31, 2001 4.75:1.00
June 30, 2001 4.75:1.00
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MAXIMUM CONSOLIDATED
" PERIOD LEVERAGE RATIO
------------- --------------------
September 30, 2001 4.75:1.00
December 31, 2001 4.75:1.00
March 31, 2002 4.75:1.00
June 30, 2002 4.75:1.00
September 30, 2002 4.75:1.00
December 31, 2002 4.75:1.00"
F. MINIMUM CONSOLIDATED ADJUSTED EBITDA. Subsection 7.6C of
the Credit Agreement is hereby amended by deleting the table contained therein
in its entirety and substituting the following therefor:
MINIMUM CONSOLIDATED
" PERIOD ADJUSTED EBITDA
----------- --------------------
September 30, 1998 $30,000,000
December 31, 1998 $36,000,000
March 31, 1999 $44,000,000
June 30, 1999 $60,000,000
September 30, 1999 $60,000,000
December 31, 1999 $75,000,000
March 31, 2000 $75,000,000
June 30, 2000 $75,000,000
September 30, 2000 $75,000,000
December 31, 2000 $75,000,000
March 31, 2001 $80,000,000
June 30, 2001 $80,000,000
September 30, 2001 $80,000,000
December 31, 2001 $80,000,000
March 31, 2002 $80,000,000
June 30, 2002 $80,000,000
September 30, 2002 $80,000,000
December 31, 2002 $80,000,000
; PROVIDED that, for purposes of this subsection 7.6C only, (i) with respect to
the Fiscal Quarter ended on September 30, 1998, Consolidated Adjusted EBITDA
shall be for the
9
immediately preceding one Fiscal Quarter period; (ii) with respect to the
Fiscal Quarter ended on December 31, 1998, Consolidated Adjusted EBITDA shall
be for the immediately preceding two-consecutive Fiscal Quarter period; (iii)
with respect to the Fiscal Quarter ended on March 31, 1999, Consolidated
Adjusted EBITDA shall be for the immediately preceding three-consecutive
Fiscal Quarter period; and (iv) for each subsequent Fiscal Quarter after the
Fiscal Quarter ended on March 31, 1999, Consolidated Adjusted EBITDA shall be
for the immediately preceding four-consecutive Fiscal Quarter period ending
as of the last day of any Fiscal Quarter occurring during any of the periods
set forth above."
G. MINIMUM CONSOLIDATED NET WORTH. Subsection 7.6D of the
Credit Agreement is hereby amended by deleting the table set forth therein in
its entirety and substituting the following therefor:
MINIMUM CONSOLIDATED
" PERIOD NET WORTH
------------- --------------------
September 30, 1998 $72,000,000
December 31, 1998 $62,000,000
March 31, 1999 $55,000,000
June 30, 1999 $55,000,000
September 30, 1999 $65,000,000
December 31, 1999 $70,000,000
March 31, 2000 $65,000,000
June 30, 2000 $67,000,000
September 30, 2000 $72,000,000
December 31, 2000 $74,000,000
March 31, 2001 $76,000,000
June 30, 2001 $78,000,000
September 30, 2001 $80,000,000
December 31, 2001 $85,000,000
March 31, 2002 $85,000,000
June 30, 2002 $85,000,000
September 30, 2002 $85,000,000
December 31, 2002 $85,000,000"
H. MINIMUM ASSET COVERAGE. Subsection 7.6 is hereby amended
by adding immediately after subsection 7.6D the following:
"E. MINIMUM ASSET COVERAGE. Company shall not permit
the sum of (x) 85% of the Eligible Accounts Receivable Value of Company
and its Subsidiaries PLUS (y) 65% of the Eligible Inventory Value of
Company and its Subsidiaries to be less than the product of (a) 1.10
MULTIPLIED BY (b) the aggregate
10
principal amount of all outstanding Loans and Letters of Credit, in
each case as of the last day of the Fiscal Quarter for which such
determination is being made."
I. RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND
ACQUISITIONS. Subsection 7.7 of the Credit Agreement is hereby amended by (a)
deleting the reference to "$30,000,000 for any given Fiscal Year" contained in
clause (iii) and substituting "$30,000,000 for any given Fiscal Year (PROVIDED
that, in the event Company changes its Fiscal Year-end from September 30 to
December 31, then for such fifteen-month Fiscal Year such aggregate amount shall
not exceed $37,500,000)" therefor, and (b) deleting the reference to "$5,000,000
for any given Fiscal Year" contained in clause (v) and substituting "$5,000,000
for any given Fiscal Year (PROVIDED that, in the event Company changes its
Fiscal Year-end from September 30 to December 31, then for such fifteen-month
Fiscal Year such aggregate amount shall not exceed $6,250,000)" therefor.
J. CONSOLIDATED CAPITAL EXPENDITURES. Subsection 7.8 of the
Credit Agreement is hereby amended by deleting the table contained therein in
its entirety and substituting the following therefor:
MAXIMUM CONSOLIDATED
" FISCAL YEAR CAPITAL EXPENDITURES
------------------- ----------------------
Fiscal Year 1998 $27,500,000
Fiscal Year 1999 $20,000,000
Fiscal Year 2000 and each
Fiscal Year thereafter $20,000,000
; PROVIDED that, in the event Company changes its Fiscal Year-end from
September 30 to December 31, then for such fifteen-month Fiscal Year the
Maximum Consolidated Capital Expenditures Amount shall not exceed
$25,000,000."
G. FISCAL YEAR. Subsection 7.14 is hereby amended by deleting
it in its entirety and substituting the following therefor:
"7.14 FISCAL YEAR.
None of Company nor any of its Subsidiaries shall change
its Fiscal Year-end from September 30 or December 31, as the case
may be, without giving 60 days notice to Administrative Agent and
Lenders of such change."
1.5 AMENDMENTS TO EXHIBITS.
ATTACHMENT I to EXHIBIT VI to the Credit Agreement is hereby
amended as follows:
(i) by deleting the reference to "$7,500,000" set forth in Item
A.14 of said ATTACHMENT I to EXHIBIT VI and substituting
"$25,000,000" therefor;
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(ii) by deleting the reference to "$10,000,000" set forth in
Item C.2 of said ATTACHMENT I to EXHIBIT VI and substituting
"$20,000,000" therefor;
(iii) by (x) deleting the reference to "$500,000" set forth in
Item D.7 of said ATTACHMENT I to EXHIBIT VI and substituting
"$500,000(1)" therefor, and (y) adding the following text of such
footnote 1 at the bottom of the appropriate page of said
ATTACHMENT I to EXHIBIT VI:
"(1) In the event that Company changes its Fiscal Year-end
from September 30 to December 31, then such maximum permitted
amount shall be $625,000";
(iv) by adding (x) footnote 2 [2] immediately after the
reference to "(for the four-Fiscal Quarter period ending
__________, _______)" set forth in the introductory line of Item G
of said ATTACHMENT I to EXHIBIT VI and (y) the following text of
such footnote 2 at the bottom of the appropriate page of said
ATTACHMENT I to EXHIBIT VI:
"(2) With respect to (i) the Fiscal Quarter ended on
September 30, 1998, Consolidated Adjusted EBITDA shall be for the
immediately preceding one Fiscal Quarter period; (ii) the Fiscal
Quarter ended on December 31, 1998, Consolidated Adjusted EBITDA
shall be for the immediately preceding two-consecutive Fiscal
Quarter period; (iii) the Fiscal Quarter ended on March 31, 1999,
Consolidated Adjusted EBITDA shall be for the immediately
preceding three-consecutive Fiscal Quarter period; and (iv) each
subsequent Fiscal Quarter after the Fiscal Quarter ended on March
31, 1999, Consolidated Adjusted EBITDA shall be for the
immediately preceding four-consecutive Fiscal Quarter period
ending as of the last day of any Fiscal Quarter.";
(v) by (x) adding the following as the new line 7 to Item G of
said ATTACHMENT I to EXHIBIT VI:
"7. Salary and workforce reductions (for any
period including December 31, 1998 only and
not to exceed $6,500,000): $___________";
(y) renumbering the original lines 7 through 11 as new lines 8 through
12; and (z) deleting the parenthetical contained in the original line 10
(the new line 11) in its entirety and substituting the following
therefor: "((1+2+3+4+5+6+7+8)-(9+10))";
(vi) by (x) deleting the reference to "$30,000,000" set forth in
Item I.2 of said ATTACHMENT I to EXHIBIT VI and substituting
"$30,000,0003" therefor, and (y) adding the following text of such
footnote 3 at the bottom of the appropriate page of said
ATTACHMENT I to EXHIBIT VI:
"(3) In the event that Company changes its Fiscal Year-end
from September 30 to December 31, then such maximum permitted
amount shall be $37,500,000";
(vii) by (x) deleting the reference to "$5,000,000" set forth in
Item I.6 of said ATTACHMENT I to EXHIBIT VI and substituting
"$5,000,000(4)" therefor, and
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(y) adding the following text of such footnote 4 at the bottom
of the appropriate page of said ATTACHMENT I to EXHIBIT VI:
"(4) In the event that Company changes its Fiscal Year-end
from September 30 to December 31, then such maximum permitted
amount shall be $6,250,000"; and
(viii) by adding immediately after Item J of said ATTACHMENT I to
EXHIBIT VI the following:
"K. MINIMUM ASSET COVERAGE (as of ___________, _______).
1. Eligible Accounts Receivable Value:
$___________
2. 85% of Eligible Accounts Receivable Value
(0.85 x Item K.1):
$___________
3. Eligible Inventory Value:
$___________
4. 65% of Eligible Inventory Value (0.65 x
Item K.3):
$___________
5. Aggregate principal amount of all outstand-
ing Loans and Letters of Credit:
$___________
6. Product of 1.10 MULTIPLIED BY Item K.5:
$___________
7. Sum of Item K.3 PLUS Item K.4 (Item K.7
may not exceed Item K.6):
$___________"
SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FIRST AMENDMENT
EFFECTIVE DATE"):
A. BORROWER DOCUMENTS. On or before the First Amendment
Effective Date, each Borrower shall deliver to Lenders (or to Administrative
Agent for Lenders) the following, each, unless otherwise noted, dated the First
Amendment Effective Date:
13
1. Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Amendment,
certified as of the First Amendment Effective Date by its corporate
secretary or an assistant secretary as being in full force and effect
without modification or amendment;
2. Signature and incumbency certificates of their
respective officers executing this Amendment; and
3. Six executed copies of this Amendment.
B. EXECUTION OF AMENDMENT BY REQUISITE LENDERS. On or before
the First Amendment Effective Date, Requisite Lenders shall have executed and
delivered copies of this Amendment to Administrative Agent.
C. FEES. On or before the First Amendment Effective Date,
Company shall pay to Administrative Agent, for distribution to each Lender who
executes this Amendment on or before the First Amendment Effective Date in
proportion to that Lender's Pro Rata share of the Revolving Loan Commitments, an
amendment fee equal to 0.250% of the Revolving Loan Commitments.
D. OTHER PROCEEDINGS. On or before the First Amendment
Effective Date, all corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by Administrative Agent,
acting on behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Administrative Agent and such counsel, and Administrative Agent and
such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent may reasonably request.
SECTION 3. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, each Borrower
represents and warrants to each Lender that the following statements are true,
correct and complete:
A. CORPORATE POWER AND AUTHORITY. Each Borrower has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under,
the Credit Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of each Borrower.
C. NO CONFLICT. The execution and delivery by each Borrower
of this Amendment and the performance by each Borrower of the Amended Agreement
do not
14
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to such Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of such Borrower or any of
its Subsidiaries or any order, judgment or decree of any court or other
agency of government binding on such Borrower or any of its Subsidiaries,
(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 such
Borrower or any of its Subsidiaries, (iii) result in or require the creation
or imposition of any Lien upon any of the properties or assets of such
Borrower or any of its Subsidiaries (other than Liens created under any of
the Loan Documents in favor of Agent on behalf of Lenders), or (iv) require
any approval of stockholders or any approval or consent of any Person under
any Contractual Obligation of such Borrower or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by
each Borrower of this Amendment and the performance by such Borrower of the
Amended Agreement 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.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by each Borrower and are the
legally valid and binding obligations of such Borrower, enforceable against
such Borrower in accordance with their respective terms, except 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.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM
CREDIT AGREEMENT. The representations and warranties contained in Section 5
of the Credit Agreement are and will be true, correct and complete in all
material respects on and as of the Amendment Effective 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 they were true, correct and complete in all material respects on
and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is
continuing or will result from the consummation of the transactions
contemplated by this Amendment that would constitute an Event of Default or a
Potential Event of Default.
SECTION 4. ACKNOWLEDGEMENT AND CONSENT
Company is a party to certain Guaranties and each Borrower is a
party to certain Collateral Account Agreements, Security Agreements, Pledge
Agreements, Trademark Security Agreements, Patent Security Agreements and
Mortgages pursuant to which such Borrower has created Liens in favor of
Administrative Agent on certain Collateral to secure the Obligations.
Holdings is a party to a Guaranty and certain Security Agreements and Pledge
Agreements pursuant to which Holdings has (i) guarantied the Obligations and
(ii) created Liens in favor of Administrative Agent on certain Collateral to
secure its
15
obligations under the Guaranty. Each Borrower and Holdings are collectively
referred to herein as the "CREDIT SUPPORT PARTIES", and all such Guaranties
and Collateral Documents referred to above are collectively referred to
herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment
and consents to the amendment of the Credit Agreement effected pursuant to
this Amendment. Each Credit Support Party hereby confirms that each Credit
Support Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guarantee or secure, as the case may be,
to the fullest extent possible the payment and performance of all
"Obligations," "Guarantied Obligations" and "Secured Obligations," as the
case may be (in each case as such terms are defined in the applicable Credit
Support Document), including without limitation the payment and performance
of all such "Obligations," "Guarantied Obligations" or "Secured Obligations,"
as the case may be, in respect of the Obligations of the Borrowers now or
hereafter existing under or in respect of the Amended Agreement.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in
the Amended Agreement and the Credit Support Documents to which it is a party
or otherwise bound are true, correct and complete in all material respects on
and as of the First Amendment Effective 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 they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Credit Support Party (other than the Borrowers)
acknowledges and agrees that (i) notwithstanding the conditions to
effectiveness set forth in this Amendment, such Credit Support Party is not
required by the terms of the Credit Agreement or any other Loan Document to
consent to the amendments to the Credit Agreement effected pursuant to this
Amendment and (ii) nothing in the Credit Agreement, this Amendment or any
other Loan Document shall be deemed to require the consent of such Credit
Support Party to any future amendments to the Credit Agreement.
SECTION 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(i) On and after the First Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring
to the Credit Agreement, and each reference in the other Loan
Documents to the "Credit Agreement", "thereunder", "thereof"
16
or words of like import referring to the Credit Agreement shall
mean and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right,
power or remedy of any Agent or any Lender under, the Credit
Agreement or any of the other Loan Documents.
B. FEES AND EXPENSES. Each Borrower acknowledges that all
costs, fees and expenses as described in subsection 10.2 of the Credit Agreement
incurred by Administrative Agent and its counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of the Borrowers.
C. HEADINGS. Section and subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
17
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized
as of the date first written above.
XXXX GRAPHIC SYSTEMS, INC.,
as a Borrower
By: ______________________
Title: ___________________
XXXX GRAPHIC SYSTEMS LIMITED,
as a Borrower
By: ______________________
Title: ___________________
XXXX SYSTEMES GRAPHIQUES NANTES S.A.,
as a Borrower
By: ______________________
Title: ___________________
XXXX GRAPHIC SYSTEMS JAPAN CORPORATION,
as a Borrower
By: ______________________
Title: ___________________
GGS HOLDINGS, INC.,
as a Credit Support Party
By: ______________________
Title: ___________________
18
LENDERS:
BANKERS TRUST COMPANY,
as Administrative Agent and as a Lender
By: _________________________
Title: ______________________
19
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent and as a Lender
By: ______________________________
Title:____________________________
By: ______________________________
Title: ___________________________
00
XXX XXXX XX XXXX XXXXXX,
as a Lender
By:_____________________________
Title: _________________________
21
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION, as a Lender
By: ______________________________
Title: ___________________________
00
XXX XXXX XX XXX XXXX,
as a Lender
By: ______________________________
Title: ___________________________
23
NATIONSBANK, N.A.,
as a Lender
By: ______________________________
Title: ___________________________
24
CREDIT AGRICOLE INDOSUEZ,
as a Lender
By: _______________________________
Title: ____________________________
By: _______________________________
Title: ____________________________
25
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as a Lender and
as an Indemnifying Lender
By: _______________________________
Title: ____________________________
26
THE FIRST NATIONAL BANK OF CHICAGO,
as a Lender
By: ______________________________
Title: ___________________________
27
THE FUJI BANK, LIMITED,
as a Lender
By: ______________________________
Title: ___________________________
28
XXXXXX TRUST AND SAVINGS BANK,
as a Lender
By: _____________________________
Title: __________________________
00
XXX XXXXXXXXXX XXXX XX XXXXX TRUST COMPANY,
as a Lender and as an
Indemnifying Lender
By: ______________________________
Title: ___________________________
30
LASALLE NATIONAL BANK,
as a Lender
By: _______________________________
Title: ____________________________
31
NATIONAL BANK OF CANADA, A CANADIAN CHARTERED
BANK, as a Lender
By: _______________________________
Title: ____________________________
By: _______________________________
Title: ____________________________
32
THE SANWA BANK, LIMITED, CHICAGO BRANCH,
as a Lender
By: _______________________________
Title: ____________________________
33
GENERAL ELECTRIC CAPITAL CORPORATION, as a
Lender
By: ________________________________
Title: _____________________________
00
XXXXXXXX XXXXXXXXXXX XXXX XXX, XXXXXX BRANCH,
as a Lender
By: _______________________________
Title: Manager and Vice President
NATIONAL WESTMINSTER BANK PLC,
NEW YORK BRANCH, as a Lender
By: _______________________________
Title: Manager and Vice President
35
BARCLAYS BANK PLC,
as a Lender
By: _________________________________
Title: ______________________________
00
XXXXXXXX XXXX XX, XXX XXXX AND GRAND CAYMAN
BRANCHES, as a Lender
By: _________________________________
Title: ______________________________
By: _________________________________
Title: ______________________________
37
CIBC INC., as a Lender and
as an Indemnifying Lender
By: _________________________________
Title: ______________________________
38
SECOND AMENDMENT TO CREDIT AGREEMENT
AND
LIMITED WAIVER
This SECOND AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER
(this "AMENDMENT") is dated as of January 12, 1999 and entered into by and among
XXXX GRAPHIC SYSTEMS, INC., a corporation organized under the laws of the State
of Delaware ("COMPANY") and whose registered office is at 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000, XXXX GRAPHIC SYSTEMS LIMITED (Company Number 3212468),
a company organized under the laws of England ("XXXX UK") and whose registered
office is at Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx XX0 0XX, XXXX SYSTEMES
GRAPHIQUES NANTES, S.A., a SOCIETE ANONYME organized under the laws of the
Republic of France ("XXXX FRANCE") and whose registered office is at 00, xxx xx
Xxxxxx, 00000 Xxxxxx, XXXX GRAPHIC SYSTEMS JAPAN CORPORATION, a corporation
organized under the laws of Japan ("XXXX JAPAN"; and together with Company, Xxxx
UK and Xxxx France, the "BORROWERS") and whose registered office is at Mitsuya
Xxxxxxxxx Xxxxxxxx, 00-00 Xxxxxxxxx 0-Xxxxx, Xxxxxx-Xx, Xxxxx 000, THE FINANCIAL
INSTITUTIONS ACTING AS LENDERS AND LISTED ON THE SIGNATURE PAGES HEREOF, THE
FINANCIAL INSTITUTIONS ACTING AS INDEMNIFYING LENDERS AND LISTED ON THE
SIGNATURE PAGES HEREOF, BANKERS TRUST COMPANY, as administrative agent for the
Lenders (in such capacity, "ADMINISTRATIVE AGENT") and whose registered office
is at One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and
CREDIT SUISSE FIRST BOSTON ("CSFB"), as syndication agent for Lenders (in such
capacity, "SYNDICATION AGENT") and whose offices are at 00 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, and, for purposes of Section 5 hereof, the Credit Support
Parties (as defined in Section 5 hereof) listed on the signature pages hereof,
and is made with reference to that certain Amended and Restated Multicurrency
Credit Agreement dated as of January 29, 1998, by and among Borrowers, Lenders,
Indemnifying Lenders, Administrative Agent, Syndication Agent and certain other
parties, as amended by that certain First Amendment dated as of August 31, 1998
(as so amended, the "CREDIT AGREEMENT"). Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
RECITALS
WHEREAS, Borrower and Lenders desire to amend the Credit
Agreement to include a borrowing base with respect to Revolving Loans; and
WHEREAS, Borrowers and Lenders also desire to amend the Credit
Agreement to (i) amend certain of the defined terms contained therein, (ii)
amend certain of the financial covenants contained therein, and (iii) make
certain other amendments, all as more specifically set forth herein:
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO RECITALS.
The Recitals to the Credit Agreement are hereby amended by
deleting the reference to "$175,000,000" contained in the second recital and
substituting "up to $175,000,000" therefor.
1.2 AMENDMENTS TO SECTION 1: PROVISIONS RELATING TO DEFINED TERMS.
A. AMENDMENTS TO EXISTING DEFINITIONS. Subsection 1.1 of the
Credit Agreement is hereby amended as follows: the definitions "Applicable Base
Rate Margin", "Applicable Offshore Rate Margin", "Commitment Fee Percentage",
"Consolidated Leverage Ratio", "Eligible Accounts Receivable Value", "Eligible
Inventory Value", "Inventory" and "Maximum Revolving Loan Commitments" are each
hereby amended by deleting each definition in its entirety and substituting the
following therefor:
"APPLICABLE BASE RATE MARGIN" means, as of any date of
determination, a percentage per annum as set forth below opposite the
applicable Consolidated Leverage Ratio:
CONSOLIDATED LEVERAGE RATIO APPLICABLE BASE RATE MARGIN
greater than or equal to 4.00:1.00 2.25%
less than 4.00:1.00 2.00%
but greater than or equal to 3.50:1.00
less than 3.50:1.00 1.75%
but greater than or equal to 3.00:1.00
less than 3.00:1.00 1.50%
; PROVIDED that until adjusted in accordance with the provisions of
subsection 2.2A, the Applicable Base Rate Margin shall be 2.25% per
annum effective on the Second Amendment Effective Date.
2
"APPLICABLE OFFSHORE RATE MARGIN" means, as of any date of
determination, a percentage per annum as set forth below opposite the
applicable Consolidated Leverage Ratio:
CONSOLIDATED LEVERAGE RATIO APPLICABLE OFFSHORE RATE MARGIN
greater than or equal to 4.00:1.00 3.25%
less than 4.00:1.00 3.00%
but greater than or equal to 3.50:1.00
less than 3.50:1.00 2.75%
but greater than or equal to 3.00:1.00
less than 3.00:1.00 2.50%
; PROVIDED that until adjusted in accordance with the provisions of
subsection 2.2A, the Applicable Offshore Rate Margin shall be 3.25% per
annum effective on the Second Amendment Effective Date.
"COMMITMENT FEE PERCENTAGE" means, as of any date of
determination, 0.500% per annum.
"CONSOLIDATED LEVERAGE RATIO" means, as at any date of
determination, the ratio of (x) Consolidated Total Debt, as of the last
day of the Fiscal Quarter for which such determination is being made,
to (y) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period
ending as of the last day of the Fiscal Quarter for which such
determination is being made.
"ELIGIBLE ACCOUNTS RECEIVABLE" means the aggregate amount of
all Accounts of all Borrowers deemed by Administrative Agent in the
exercise of its Permitted Discretion to be eligible for inclusion in
the calculation of the Borrowing Base. In determining the amount to be
so included, the face amount of such Accounts shall be reduced by the
amount of all returns, discounts, deductions, claims, credits, charges,
or other allowances. Unless otherwise approved in writing by
Administrative Agent, an Account shall not be an Eligible Account
Receivable if:
(a) it arises out of a sale made by a Borrower to an
Affiliate; or
(b) the goods giving rise to such Account have been
shipped, delivered and invoiced, and title has passed, to the
account debtor and such Account is classified by a Borrower in
accordance with its past practices and procedures as an
"account receivable not yet due" (collectively, the "EXTENDED
PAYMENT ACCOUNTS"), but only to the extent (1) the aggregate
amount of all such Extended Payment Accounts of all Borrowers
exceeds 20% of all Accounts of all Borrowers or (2) final
payment on such an Extended Payment Account shall not be
received by such Borrower within 270 days after shipment and
delivery of the goods giving rise to such Extended Payment
Account; or
(c) it is unpaid more than 90 days after the original
payment due date; or
3
(d) it is from the same account debtor or its
Affiliate and fifty percent (50%) or more of all Accounts from
that account debtor (and its Affiliates) are ineligible under
(c) above; or
(e) when aggregated with all other Accounts of an
account debtor, such Account exceeds 25% in face value of all
Accounts of all Borrowers then outstanding, but only to the
extent of such excess, unless such excess is supported by an
irrevocable letter of credit satisfactory to Administrative
Agent (as to form, substance and issuer) and assigned to
Administrative Agent; or
(f) the account debtor for such Account is a creditor
of any Borrower, has or has asserted a right of setoff against
such Borrower, or has disputed its liability or otherwise has
made any claim with respect to such Account or any other
Account which has not been resolved, in each case to the
extent of the amount owed by such Borrower to such account
debtor, the amount of such actual or asserted right of setoff,
or the amount of such dispute or claim, as the case may be; or
(g) the account debtor is (or its assets are) the
subject of any of the events described in subsection 8.6 or
8.7; or
(h) (1) such Account is not payable in Dollars, an
Offshore Currency or any other freely convertible or
exchangeable currency or (2) the account debtor for such
Account is located outside the United States, the EU or Japan,
except to the extent (x) the aggregate amount of such Accounts
of all Borrowers which do not comply with sub-clause (2) above
does not exceed 20% of the aggregate amount of all Accounts of
all Borrowers, or (y) such Account is supported by an
irrevocable letter of credit, a guaranty or any other
financing arrangement, in each case satisfactory to
Administrative Agent (as to form, substance and issuer) and
assigned to Administrative Agent; or
(i) the sale to the account debtor is on a
xxxx-and-hold, guarantied sale, sale-and-return, sale on
approval or consignment basis or made pursuant to any other
written agreement providing for repurchase or return; or
(j) Administrative Agent determines by its own credit
analysis that collection of such Account is uncertain or that
such Account may not be paid; or
(k) the account debtor is any federal, state, local,
provincial, or other comparable or similar governmental
authority, agency or instrumentality; PROVIDED that if the
account debtor is the United States of America, the UK, France
or Japan, or any department, agency or instrumentality
thereof, such Account shall not be ineligible solely as a
result of this clause (k) if the applicable Loan Party duly
assigns its rights to payment of such Account to
Administrative Agent pursuant to the Assignment of Claims Act
of 1940, as amended (31 U.S.C. xx.xx. 3727 et seq.) or the
comparable law, code or regulation in the UK, France or Japan,
as the case may be; or
4
(l) such Account does not comply with all
requirements of all applicable laws, rules, regulations and
orders of any governmental authority, including without
limitation the Federal Consumer Credit Protection Act, the
Federal Truth in Lending Act, Regulation Z of the Board of
Governors of the Federal Reserve System and all Environmental
Laws; or
(m) such Account arises as a result of any progress
billing or such Account is subject to any adverse security
deposit, progress payment or other similar advance made by or
for the benefit of the applicable account debtor; or
(n) the goods giving rise to such Account are subject
to any Secured Customer Financing Arrangement or Customer
Financing Note Guaranty; or
(o) it is not subject to a valid and perfected First
Priority Lien in favor of Administrative Agent or does not
otherwise conform to the representations and warranties
contained in the Loan Documents; PROVIDED that no Account
which is otherwise an Eligible Account Receivable shall be
excluded under this clause (o) solely as a result of (i) in
the case of Xxxx UK and Xxxx France, the account debtor for
such Account is located in a jurisdiction other than that of
the UK or France so long as such account debtor is in the EU;
and (ii) in the case of Xxxx Japan, such Account is not
subject to a perfected Lien in favor of Administrative Agent
solely because (x) no notification of Administrative Agent's
security interest in such Account has been provided to the
account debtor or (y) Administrative Agent has not taken
possession of any drafts or checks related to such Account; or
(p) it is an Account with a customer credit balance
that is unpaid more than 90 days after the original payment
date for which a debit balance exists; or
(q) it is not owned solely by a Borrower or such
Borrower does not have good, valid and marketable title
thereto;
PROVIDED that Administrative Agent, in the exercise of its Permitted
Discretion, may impose additional restrictions (or eliminate the same)
to the standards of eligibility set forth in this definition.
"ELIGIBLE INVENTORY" means the aggregate amount of Inventory
of all Borrowers deemed by Administrative Agent in the exercise of its
Permitted Discretion to be eligible for inclusion in the calculation of
the Borrowing Base. In determining the amount to be so included, such
Inventory shall be valued at the lower of cost or market, on a basis
consistent with Borrowers' current and historical accounting practice.
Unless otherwise approved in writing by Administrative Agent, an item
of Inventory shall not be included in Eligible Inventory if:
5
(a) it is not owned solely by a Borrower or such
Borrower does not have good, valid and marketable title
thereto; or
(b) it is not located in the United States, the UK,
France or Japan; or
(c) other than finished goods constituting Inventory
subject to a Secured Customer Financing Arrangement which are
in the process of being installed by a Borrower for a period
which does not exceed six months ("SPECIFIED FINISHED GOODS"),
it consists of goods or Inventory (including consigned goods
or Inventory) not located on property owned or leased by any
Borrower or in a contract warehouse; PROVIDED that such goods
or Inventory (other than consigned goods or Inventory) shall
not be excluded under this clause (c) if such goods are
located on property owned or leased by any Borrower or in a
contract warehouse, in each case that is subject to a
Collateral Access Agreement executed by any applicable
mortgagee, lessor or contract warehouseman, as the case may
be, and such goods are segregated or otherwise separately
identifiable from goods of others, if any, stored on the
premises; or
(d) it is not subject to a valid and perfected First
Priority Lien in favor of Administrative Agent except, with
respect to Inventory stored at sites described in clause (c)
above, for Liens for unpaid rent or normal and customary
warehousing charges; PROVIDED that no Inventory which is
otherwise Eligible Inventory shall be excluded under this
clause (d) solely as a result of, in the case of Xxxx UK and
Xxxx France, Specified Finished Goods are being installed in a
jurisdiction other than that of the UK or France so long as
they are being installed in the EU; or
(e) it consists of goods returned or rejected by any
Borrower's customers, or goods (other than Specified Finished
Goods) in transit to third parties (other than to warehouse
sites covered by a Collateral Access Agreement); or
(f) it consists of raw materials constituting
Inventory which are sub-assemblies or works in process or
other partially manufactured goods constituting Inventory; or
(g) it is not first-quality goods, is obsolete or
slow moving, or is not accountable due to loss or shrinkage or
valuation capitalization, or does not otherwise conform to the
representations and warranties contained in the Loan
Documents; or
6
(h) it consists of Inventory to be included in
finished goods and such Inventory has been assigned to
specific contracts with customers who have made advance
payments with respect to such Inventory on such contracts;
PROVIDED that Administrative Agent, in the exercise of its Permitted
Discretion, may impose additional restrictions (or eliminate the same)
to the standards of eligibility set forth in this definition.
"INVENTORY" means, with respect to a Person, all goods,
merchandise and other personal property which are held by such Person
for sale or lease, including those held for display or demonstration or
out on lease or consignment or to be furnished under a contract of
service, including without limitation (but without duplication) raw
materials, components, works in process, finished goods (including
without limitation all completed offset newspaper press systems, insert
web offset press systems and commercial web offset printing presses, or
accessories thereto, and other related goods and merchandise, in each
case constituting finished goods which are held for sale or lease by
such Person, including those held for display or demonstration), spare
parts (including without limitation all components, goods, merchandise
or spare parts relating to press equipment held for sale or lease by
such Person in connection with the servicing, maintenance or repair of
finished goods sold or leased by such Person), or other materials used
or consumed, or to be used or consumed, in the business of such Person;
PROVIDED that "Inventory" shall not include any materials or other
items that would otherwise constitute "Equipment".
"MAXIMUM REVOLVING LOAN COMMITMENTS" means, as of any date of
determination, (x) for any Borrower, the Dollar Equivalent of the
Revolving Loan Commitments available to such Borrower as set forth in
the most recent Notice of Allocation delivered by Borrowers to
Administrative Agent pursuant to subsection 2.1A(i)(b), and (y) for all
Borrowers, (1) for the period from and including the Effective Date to
but excluding January 1, 2001, the Dollar Equivalent of $200,000,000
LESS the aggregate amount of all reductions made to all Revolving Loan
Commitments pursuant to subsections 2.4A(ii) and 2.4.A(iii), (2) for
the period from and including January 1, 2001 to but excluding January
1, 2002, the Dollar Equivalent of $175,000,000 LESS the aggregate
amount of all reductions made to all Revolving Loan Commitments
pursuant to subsections 2.4A(ii) and 2.4.A(iii), and (3) for the period
from and including January 1, 2002 through and including the Commitment
Termination Date, the Dollar Equivalent of $150,000,000 LESS the
aggregate amount of all reductions made to all Revolving Loan
Commitments pursuant to subsections 2.4A(ii) and 2.4.A(iii)."
B. AMENDMENTS TO EXISTING DEFINITIONS. Subsection 1.1 of the
Credit Agreement is hereby further amended by deleting the reference to
"$175,000,000" contained in the definition of "Letters of Credit Suballocation"
and substituting "the Maximum Letter of Credit Amount" therefor.
7
C. ADDITION OF NEW DEFINITIONS. Subsection 1.1 of the Credit
Agreement is hereby further amended by adding thereto the following definitions
which shall be inserted in proper alphabetical order:
"BORROWING BASE" means, as at any date of determination, an
aggregate amount equal to:
(i) eighty-five percent (85%) of Eligible Accounts
Receivable of all Borrowers, PLUS
(ii) sixty-five percent (65%) of Eligible Inventory
of all Borrowers, PLUS
(iii) fifty percent (50%) of Eligible Equipment of
all Borrowers, PLUS
(iv) fifty percent (50%) of Eligible Real Property of
all Borrowers, PLUS
(v) fifty percent (50%) of Eligible Intellectual
Property of all Borrowers, MINUS
(vi) the aggregate amount of reserves, if any,
established by Administrative Agent in the exercise of its
Permitted Discretion against Eligible Accounts Receivable,
Eligible Inventory, Eligible Equipment, Eligible Real Property
and Eligible Intellectual Property of Borrowers;
PROVIDED that Administrative Agent, in the exercise of its Permitted
Discretion, may (a) increase or decrease reserves against Eligible
Accounts Receivable, Eligible Inventory, Eligible Equipment, Eligible
Real Property and Eligible Intellectual Property of Borrowers and (b)
reduce the advance rates provided in this definition, or restore such
advance rates to any level equal to or below the advance rates in
effect as of the Second Amendment Effective Date.
"BORROWING BASE CERTIFICATE" means a certificate substantially
in the form of EXHIBIT XXVI annexed hereto delivered by Borrowers
pursuant to subsection 6.1(xx). Borrowers shall complete such Borrowing
Base Certificate based on the respective Dollar, Sterling, Franc, Xxxx
or Yen amounts reflected for Accounts, Inventory, Equipment, Real
Property Assets or Intellectual Property on Borrowers' financial books
and records and shall, in addition, provide the Dollar Equivalent of
such Sterling, Franc, Xxxx or Yen amounts as of the date of such
Borrowing Base Certificate. For purposes of determining compliance with
the provisions of this Agreement, Administrative Agent shall utilize
the Dollar Equivalent of such Sterling, Franc, Xxxx or Yen amounts.
"BTCC RECEIVABLES PURCHASE AGREEMENTS" means that certain
receivables purchase agreement, dated as of November 27, 1998, entered
into by and between BT Commercial Corporation and Company, and any and
all related agreements, including without limitation any related put
agreements, executed and delivered in connection with such receivables
purchase agreement.
8
"CONTRIBUTED ACCOUNTS" means the Accounts, as set forth on
SCHEDULE 1.1(B) annexed hereto, purchased by BT Commercial Corporation
from Company and which Contributed Accounts, with a face value of not
less than $35,000,000, shall be purchased by Stonington Equity Sub from
BT Commercial Corporation and contributed by Stonington Equity Sub to
Company as the Stonington 1999 Equity Contribution, in each case
pursuant to the BTCC Receivables Purchase Agreements.
"ELIGIBLE EQUIPMENT" means the aggregate amount of all
Equipment of all Borrowers deemed by Administrative Agent in the
exercise of its Permitted Discretion to be eligible for inclusion in
the calculation of the Borrowing Base. In determining the amount to be
so included, such Equipment shall be valued at the liquidation value of
such Equipment. Unless otherwise approved in writing by Administrative
Agent, an item of Equipment shall not be included in Eligible Equipment
if:
(a) it is not owned solely by a Borrower or such
Borrower does not have good, valid and marketable title
thereto; or
(b) it is not located in the United States, the UK,
France or Japan; or
(c) it is not subject to a valid and perfected First
Priority Lien in favor of Administrative Agent; or
(d) it is not first-quality goods, is obsolete or
slow moving, or does not otherwise conform to the
representations and warranties contained in the Loan
Documents;
PROVIDED that Administrative Agent, in the exercise of its Permitted
Discretion, may impose additional restrictions (or eliminate the same)
to the standards of eligibility set forth in this definition.
"ELIGIBLE INTELLECTUAL PROPERTY" means the aggregate amount of
all Intellectual Property of all Borrowers deemed by Administrative
Agent in the exercise of its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the
amount to be so included, such Intellectual Property shall be valued at
fair market value. Unless otherwise approved in writing by
Administrative Agent, an item of Intellectual Property shall not be
included in Eligible Intellectual Property if:
(a) it is not owned solely by a Borrower or such
Borrower does not have good, valid and marketable title
thereto; or
(b) it is not subject to a valid and perfected First
Priority Lien in favor of Administrative Agent, or does not
otherwise conform to the representations and warranties
contained in the Loan Documents;
9
PROVIDED that Administrative Agent, in the exercise of its Permitted
Discretion, may impose additional restrictions (or eliminate the same)
to the standards of eligibility set forth in this definition.
"ELIGIBLE REAL PROPERTY" means the aggregate amount of all
Real Property Assets of all Borrowers deemed by Administrative Agent in
the exercise of its Permitted Discretion to be eligible for inclusion
in the calculation of the Borrowing Base. In determining the amount to
be so included, such Real Property Assets shall be valued at fair
market value. Unless otherwise approved in writing by Administrative
Agent, an item of Real Property Assets shall not be included in
Eligible Real Property Assets if:
(a) it is not owned solely by a Borrower or such
Borrower does not have good, valid and marketable title
thereto; or
(b) it is not located in the United States, the UK,
France or Japan; or
(c) it is not subject to a valid and perfected First
Priority Lien in favor of Administrative Agent, or does not
otherwise conform to the representations and warranties
contained in the Loan Documents;
PROVIDED that Administrative Agent, in the exercise of its Permitted
Discretion, may impose additional restrictions (or eliminate the same)
to the standards of eligibility set forth in this definition.
"EQUIPMENT" means, with respect to a Person, all equipment in
all of its forms, all parts thereof and all accessions thereto owned or
held by such Person, including without limitation all equipment, parts
and accessions relating to the manufacture, production, servicing,
maintenance or repair of press systems, printing presses and related
finished goods and spare parts; PROVIDED that "Equipment" shall not
include any materials or other items that would otherwise constitute
"Inventory".
"EU" means the European Union.
"INTELLECTUAL PROPERTY" means, with respect to a Person, any
trademarks, servicemarks, tradenames, tradesecrets, business names,
logos, patents, licenses and copyrights, any applications thereof, any
registration and franchise rights and interest relating thereto, and
any other intellectual property of any type, and any goodwill
associated with any of the foregoing, owned or held by such Person.
"INVESTMENT AGREEMENT" means that certain Investment Agreement
dated as of January 12, 1999 entered into by and between Stonington
Equity Sub and Holdings.
10
"MAXIMUM LETTER OF CREDIT AMOUNT" means, as of any date of
determination, for all Borrowers, (1) for the period from and including
the Effective Date to but excluding January 1, 2001, the Dollar
Equivalent of $175,000,000 LESS the aggregate amount of all reductions
made to all Revolving Loan Commitments pursuant to subsections 2.4A(ii)
and 2.4.A(iii), (2) for the period from and including January 1, 2001
to but excluding January 1, 2002, the Dollar Equivalent of $150,000,000
LESS the aggregate amount of all reductions made to all Revolving Loan
Commitments pursuant to subsections 2.4A(ii) and 2.4.A(iii), and (3)
for the period from and including January 1, 2002 through and including
the Commitment Termination Date, the Dollar Equivalent of $125,000,000
LESS the aggregate amount of all reductions made to all Revolving Loan
Commitments pursuant to subsections 2.4A(ii) and 2.4.A(iii).
"PERMITTED DISCRETION" means Administrative Agent's good faith
judgment based upon any factor which it believes in good faith: (i)
will or could adversely affect the value of any Collateral, the
enforceability or priority of Administrative Agent's Liens thereon or
the amount which Administrative Agent and Lenders would be likely to
receive (after giving consideration to delays in payment and costs of
enforcement) in the liquidation of such Collateral; (ii) suggests that
any collateral report or financial information delivered to
Administrative Agent by any Person on behalf of any Loan Party is
incomplete, inaccurate or misleading in any material respect; (iii)
materially increases the likelihood of a bankruptcy, reorganization or
other insolvency proceeding involving any Borrower or any of its
Subsidiaries or any of the Collateral; or (iv) creates or reasonably
could be expected to create a Potential Event of Default or Event of
Default. In exercising such judgment, Administrative Agent may consider
such factors already included in or tested by the definition of
Eligible Accounts Receivable, Eligible Inventory, Eligible Equipment,
Eligible Real Property and Eligible Intellectual Property, as well as
any of the following: (i) the financial and business climate of any
Borrower's industry and general macroeconomic conditions, (ii) changes
in collection history and dilution with respect to any such Borrower's
Accounts, (iii) changes in demand for, and pricing of, any such
Borrower's Inventory, (iv) changes in any concentration of risk with
respect to such Accounts, Inventory, Equipment, Real Property Assets or
Intellectual Property, and (v) any other factors that change the credit
risk of lending to any Borrower on the security of such Accounts,
Inventory, Equipment, Real Property Assets or Intellectual Property,
including without limitation any foreign exchange risks or
uncertainties. The burden of establishing lack of good faith shall be
on Borrowers.
"SECOND AMENDMENT EFFECTIVE DATE" means the date on which that
certain Second Amendment to Credit Agreement dated as of January 12,
1999 by and among Borrowers, Lenders, Indemnifying Lenders,
Administrative Agent and Syndication Agent becomes effective in
accordance with its terms, which date shall be no later than January
13, 1999.
"STONINGTON 1999 EQUITY CONTRIBUTION" means the equity
contribution by Stonington Equity Sub to Company through Holdings of
the Contributed Accounts.
"STONINGTON EQUITY SUB" means Stonington Financing Inc.,
a Delaware corporation and an Affiliate of Stonington."
11
1.3 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS AND
LOANS.
A. ALLOCATION OF REVOLVING LOAN COMMITMENTS; NOTICES OF
ALLOCATION. Subsection 2.1A(i)(b) of the Credit Agreement is hereby amended by
deleting the reference to "$175,000,000" contained therein and substituting "the
Maximum Letter of Credit Amount" therefor.
B. LIMITATION ON REVOLVING LOANS. Subsection 2.1A(i)(c) of the
Credit Agreement is hereby amended by deleting it in its entirety and
substituting the following therefor:
(c) LIMITATION ON REVOLVING LOANS. Anything contained in this
Agreement to the contrary notwithstanding, the Revolving Loans and the
Revolving Loan Commitments shall be subject to the limitations that:
(1) in no event shall the Total Utilization of
Commitments for all Borrowers then in effect exceed the
Maximum Revolving Loan Commitments for all Borrowers then in
effect;
(2) in no event shall the Total Utilization of
Commitments for any Borrower then in effect exceed the Maximum
Revolving Loan Commitments for such Borrower then in effect;
(3) in no event shall the Total Utilization of
Commitments for all Borrowers then in effect exceed the
Borrowing Base for all Borrowers then in effect; and
(4) with respect to any Borrower, in no event shall
the Dollar Equivalent of the sum of (x) the aggregate
principal amount of all outstanding Revolving Loans made to
such Borrower (other than Revolving Loans made for the purpose
of repaying any Refunded Swing Line Loans in the case of
Company, or reimbursing the applicable Issuing Lender for any
amount drawn under any Letter of Credit but not yet so applied
in the case of all Borrowers) PLUS (y) in the case of Company,
the aggregate principal amount of all outstanding Swing Line
Loans made to Company, exceed the Revolving Loan Suballocation
for such Borrower then in effect."
C. SWING LINE LOANS. Subsection 2.1A(ii) of the Credit
Agreement is hereby amended by deleting the second paragraph contained therein
in its entirety and substituting the following therefor:
"Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan
Commitment shall be subject to the limitations that:
12
(1) in no event shall the Total Utilization of
Commitments for all Borrowers then in effect exceed the
Maximum Revolving Loan Commitments for all Borrowers then in
effect;
(2) in no event shall the Total Utilization of
Commitments for Company then in effect exceed the Maximum
Revolving Loan Commitments for Company then in effect;
(3) in no event shall the Total Utilization of
Commitments for all Borrowers then in effect exceed the
Borrowing Base for all Borrowers then in effect; and
(4) in no event shall the Dollar Equivalent of the
sum of (x) the aggregate principal amount of all outstanding
Revolving Loans made to Company (other than Revolving Loans
made for the purpose of repaying any Refunded Swing Line
Loans, or reimbursing the applicable Issuing Lender for any
amount drawn under any Letter of Credit but not yet so
applied) PLUS (y) the aggregate principal amount of all
outstanding Swing Line Loans made to Company, exceed the
Revolving Loan Suballocation for Company then in effect."
D. RATE OF INTEREST. Subsection 2.2A of the Credit Agreement
is hereby amended by deleting the last paragraph contained therein in its
entirety and substituting the following therefor:
"Upon delivery of the Margin Determination Certificate by
Company to Administrative Agent pursuant to subsection 6.1(xvii), each
of the Applicable Base Rate Margin and the Applicable Offshore Rate
Margin shall automatically be adjusted in accordance with such Margin
Determination Certificate, such adjustment to become effective on the
first day of the Fiscal Quarter immediately succeeding the Fiscal
Quarter in which Administrative Agent receives such Margin
Determination Certificate; PROVIDED that if a Margin Determination
Certificate is not delivered at the time required pursuant to
subsection 6.1(xvii), the highest "Applicable Base Rate Margin" and
"Applicable Offshore Rate Margin", as the case may be, shall be
applicable from such time until delivery of the succeeding Margin
Determination Certificate; PROVIDED FURTHER that if a Margin
Determination Certificate erroneously indicates an applicable margin
more favorable to Borrowers than should be afforded by the actual
calculation of the Consolidated Leverage Ratio, each Borrower shall
promptly pay additional interest, letter of credit fees and all other
applicable fees, as the case may be, to correct for such error."
E. PREPAYMENTS AND REDUCTIONS FROM NET ASSET SALE PROCEEDS.
Subsection 2.4A(iii)(a) of the Credit Agreement is hereby amended by deleting
the proviso contained therein in its entirety and substituting the following
therefor:
13
"PROVIDED, HOWEVER, that up to $10,000,000 of Net Asset Sale
Proceeds received by Borrowers and their respective Subsidiaries from
Asset Sales permitted under subsection 7.7(iv) shall be used to prepay
Loans, but shall not be required to be used to permanently reduce
Revolving Loan Commitments pursuant to this subsection 2.4A(iii)(a), so
long as such proceeds are reinvested by Borrowers or their Subsidiaries
within 180 days after receipt of such proceeds in similar assets of
similar fair market value."
F. PREPAYMENTS AND REDUCTIONS DUE TO ISSUANCE OF EQUITY
SECURITIES. Subsection 2.4A(iii)(d) of the Credit Agreement is hereby amended by
deleting the "." at the end of the first sentence contained therein and
substituting the following therefor:
"; PROVIDED, HOWEVER, that the Net Equity Proceeds from the
equity contribution made to Company by Stonington Equity Sub pursuant
to subsection 6.12(i) shall be excluded from the provisions of this
subsection 2.4A(iii)(d)."
G. PREPAYMENTS DUE TO RESTRICTIONS OF REVOLVING LOAN
COMMITMENTS OR CURRENCY FLUCTUATIONS. Subsection 2.4A(iii)(g) of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting the
following therefor:
(g) PREPAYMENTS DUE TO RESTRICTIONS OF REVOLVING LOAN
COMMITMENTS OR CURRENCY FLUCTUATIONS. If (I) on any Computation Date
Administrative Agent shall have determined that the Total Utilization
of Commitments exceeds the Maximum Revolving Loan Commitments (whether
for a particular Borrower or all Borrowers) because of a change in
applicable rates of exchange between Dollars and Offshore Currencies,
(II) at any time the Total Utilization of Commitments for all Borrowers
exceeds the Maximum Revolving Loan Commitments for all Borrowers then
in effect, (III) the Total Utilization of Commitments for any Borrower
exceeds the Maximum Revolving Loan Commitments for such Borrower then
in effect, or (IV) the Total Utilization of Commitments for all
Borrowers exceeds the Borrowing Base for all Borrowers then in effect,
then Administrative Agent shall give notice to the applicable
Borrower(s) that a prepayment is required under this subsection
2.4A(iii)(g), and (1) in the case of Company, Company shall promptly
(x) prepay FIRST its Swing Line Loans and SECOND its Revolving Loans
and/or (y) cash collateralize its outstanding Letters of Credit, and
(2) in the case of a Borrower other than Company, such Borrower shall
promptly (x) prepay its Revolving Loans and/or (y) cash collateralize
its outstanding Letters of Credit, in each case to the extent necessary
so that the Total Utilization of Commitments shall not exceed the
Maximum Revolving Loan Commitments (whether for such Borrower or all
Borrowers) then in effect or the Borrowing Base for all Borrowers then
in effect, as the case may be."
1.4 AMENDMENTS TO SECTION 3: LETTERS OF CREDIT.
14
A. Subsection 3.1A(i) of the Credit Agreement is hereby
amended by deleting it in its entirety and substituting the following therefor:
(i) any Letter of Credit if, after giving effect to such
issuance, (I) the Total Utilization of Commitments for all Borrowers
would exceed (x) the Maximum Revolving Loan Commitments for all
Borrowers then in effect or (y) the Borrowing Base for all Borrowers
then in effect, or (II) the Total Utilization of Commitments for any
Borrower would exceed the Maximum Revolving Loan Commitments for such
Borrower then in effect;"
B. Subsection 3.1A(ii) of the Credit Agreement is hereby
amended by deleting the reference to "$175,000,000" contained therein and
substituting "the Maximum Letter of Credit Amount" therefor.
1.5 AMENDMENTS TO SECTION 6: BORROWERS' AFFIRMATIVE COVENANTS.
A. MONTHLY FINANCIALS. Subsection 6.1(i) of the Credit
Agreement is hereby amended by (1) deleting the reference to "45 days" contained
therein and substituting "30 days" therefor, (2) deleting the reference to "and"
immediately after clause (a) contained in such subsection 6.1(i), and (3)
deleting the ";" at the end of clause (b) contained therein and substituting the
following:
, and (c) a report comparing the achievements of Company with
respect to contract margin improvement, collection of Accounts and
disposition of stale Inventory against the corresponding figures from
the Financial Plan for the current Fiscal Year;"
B. QUARTERLY FINANCIALS. Subsection 6.1(ii) of the Credit
Agreement is hereby amended by:
(1) deleting the reference to "within 45 days after
the end of each Fiscal Quarter" contained therein and substituting the following
therefor:
"within (x) 45 days after the end of each Fiscal Quarter
(other than the Fiscal Quarter ended on September 30, 1999) and (y) 31
days after the end of the Fiscal Quarter ended on September 30, 1999";
and
(2) adding at the end of such subsection 6.1(ii) the
following as a new proviso:
"PROVIDED, HOWEVER, that Company will deliver to
Administrative Agent and Lenders, as soon as available and in any event
within 30 days after August 31, 1999, the consolidated and
consolidating (by Region and by product line) balance sheets of each
Borrower and its Subsidiaries as at the end of the eight-consecutive
month period ended on August 31, 1999 and the related consolidated and
consolidating (by Region and by product line) statements of income,
stockholders' equity and cash flows of such Borrower and its
Subsidiaries for the eight-consecutive month period ended on August 31,
1999, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects,
the financial condition of such Borrower and its Subsidiaries as at
August 31, 1999 and the results of their operations and their cash
flows for the eight-consecutive month period ended August 31, 1999,
subject to changes resulting from audit and normal year-end
adjustments."
15
C. BORROWING BASE CERTIFICATES. Subsection 6.1 of the Credit
Agreement is hereby amended by (1) renumbering the existing subsection 6.1(xx)
as subsection 6.1(xxii) and (2) adding a new subsection 6.1(xx) and a new
subsection 6.1(xxi) as follows:
(xx) BORROWING BASE CERTIFICATE: (a) as soon as available and
in any event within thirty (30) days after the last Business Day of
each month ending after the Second Amendment Effective Date or (b) as
soon as available and in any event within three (3) Business Days after
a written request from Administrative Agent, a Borrowing Base
Certificate dated as of the last Business Day of such month or such
date of request, as applicable, together with any additional schedules
and other information as Administrative Agent may reasonably request,
and such Borrowing Base Certificate shall, with respect to Equipment,
Real Property Assets and Intellectual Property, use the most recently
available appraised values for Equipment, Real Property Assets and
Intellectual Property;
(xxi) PAYMENTS RELATING TO THE SENIOR SUBORDINATED NOTES: five
(5) days prior to Company, directly or indirectly, declaring, ordering,
paying, making or setting apart any sum for any Restricted Junior
Payment in respect of the Senior Subordinated Notes a written notice
from Company specifying its intent to declare, order, pay, make or set
apart such sum for such Restricted Junior Payment, the amount of such
Restricted Junior Payment and the date such payment is to be made; and"
D. INSPECTION; AUDITS; APPRAISALS; LENDER MEETING. Subsection
6.5 of the Credit Agreement is hereby amended by deleting it in its entirety and
substituting the following therefor:
6.5 INSPECTION; AUDITS; APPRAISALS; LENDER MEETING.
A. INSPECTION RIGHTS. Each Borrower shall, and shall cause
each of its Subsidiaries to, permit any authorized representatives
designated by Administrative Agent (which may include representatives
of any Lender at such Lender's expense) to visit and inspect any of the
properties of such Borrower or any of 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
(provided that such Borrower may, if it so chooses, be present at or
participate in any such discussion).
16
B. AUDITS AND APPRAISALS. Upon the request of Administrative
Agent, each Borrower shall, and shall cause each of its Subsidiaries
to, permit any authorized representatives designated by Administrative
Agent to conduct one or more audits of all Accounts and Inventory of
Loan Parties and one or more appraisals of all Equipment, Real Property
Assets and Intellectual Property of Loan Parties, in each case during
each twelve-month period after the Second Amendment Effective Date
(exclusive of any audits or appraisals required under subsection
6.12(ii) (the "BASE AUDITS AND APPRAISALS")), or upon the occurrence
and during the continuation of an Event of Default, such additional
audits of Accounts and Inventory and appraisals of Equipment, Real
Property Assets and Intellectual Property as Administrative Agent may
require, each such audit and/or appraisal to be substantially similar
in scope and substance to the Base Audits and Appraisals, all upon
reasonable notice and at such reasonable times during normal business
hours and as often as may be reasonably requested.
C. LENDER MEETING. Without in any way limiting the foregoing,
each Borrower will participate in a meeting of Administrative Agent and
Lenders at least once during each Fiscal Year to be held at such
Borrower's corporate offices (or such other location as may be agreed
to by such Borrower and Administrative Agent) at such time as may be
agreed to by such Borrower and Administrative Agent."
E. MATTERS RELATING TO SECOND AMENDMENT. Section 6 of the
Credit Agreement is hereby amended by adding at the end of said Section 6 a new
subsection 6.12 as follows:
6.12 MATTERS RELATING TO SECOND AMENDMENT.
(i) EQUITY CONTRIBUTION; INVESTMENT AGREEMENT. No later than
January 29, 1999, Stonington Equity Sub shall have contributed the
Stonington 1999 Equity Contribution to Company through Holdings.
Stonington Equity Sub and Holdings shall have executed and delivered
the Investment Agreement and none of the parties thereto shall enter
into any agreement which purports to materially amend, supplement or
otherwise modify such Investment Agreement without the written consent
of Requisite Lenders, as contemplated under the Investment Agreement.
In the event that Company has not collected the full amount of the
Contributed Accounts on or before July 28, 1999, Holdings shall deliver
the Notice of Investment Date and Amount (as defined in the Investment
Agreement) to Stonington Equity Sub within the times specified in the
Investment Agreement and Stonington Equity Sub shall invest in Holdings
an amount in Cash of up to $5,000,000 (the "INVESTMENT AMOUNT") within
the times specified in the Investment Agreement, but in any event no
later than September 15, 1999, in each case pursuant to the Investment
Agreement; PROVIDED, HOWEVER, that in the event that Company, through
Holdings, exchanges uncollected or deficient Contributed Accounts for
such Investment Amount, the face value of such uncollected or deficient
Contributed Accounts so exchanged shall not exceed the Investment
Amount. Upon receipt of the Investment Amount, Holdings shall
immediately contribute, as common equity, the Investment Amount to
Company.
17
(ii) AUDITS AND APPRAISALS OF CERTAIN ASSETS OF BORROWERS.
Administrative Agent shall have received (x) no later than 30 days
after the Second Amendment Effective Date, completed audits of Accounts
and Inventory of Borrowers located in North America from
PricewaterhouseCoopers LLP or such other independent auditors
satisfactory to Administrative Agent, (y) no later than 60 days after
the Second Amendment Effective Date, completed audits of Accounts and
Inventory of Borrowers located outside of North American from one or
more independent auditors satisfactory to Administrative Agent, and (z)
no later than 120 days after the Second Amendment Effective Date,
completed appraisals from one or more independent appraisers
satisfactory to Administrative Agent with respect to (1) all Equipment
of Borrowers and (2) such other assets of Borrowers deemed by
Administrative Agent to require appraisals, in each case such audits or
appraisals shall be in form, scope and substance satisfactory to
Administrative Agent and, with respect to the appraisals, satisfying
the requirements of, and to the extent required under, any applicable
laws and regulations. Notwithstanding any other provision contained
herein to the contrary, Borrowers shall pay all costs and expenses of
PricewaterhouseCoopers LLP and any other independent auditors or
appraisers relating to the audits and appraisals referenced in this
subsection 6.12(ii)."
F. CASH MAINTENANCE. Section 6 of the Credit Agreement is
hereby further amended by adding at the end of said Section 6 a new subsection
6.13 as follows:
6.13 CASH MAINTENANCE.
Each Borrower shall, and shall cause each of its
Subsidiaries to, (x) deposit, transfer and otherwise maintain all Cash
in Deposit Accounts established and maintained with Lenders and (y)
maintain all Cash Equivalents with Lenders. Any Cash of a Borrower not
on deposit or otherwise maintained in a Deposit Account established and
maintained with a Lender and any Cash Equivalents not maintained with a
Lender, in each case as of the Second Amendment Effective Date, shall
be transferred by such Borrower to a Deposit Account established and
maintained with a Lender or to a Lender, as the case may be, no later
than thirty (30) days after the Second Amendment Effective Date. In the
event that a Lender is replaced pursuant to subsection 2.8 or a
financial institution is no longer a Lender under this Agreement, then
all Cash and Cash Equivalents maintained with such former Lender shall
be transferred to a Lender no later than thirty (30) days after such
former Lender is replaced or is no longer a Lender, as the case may
be."
1.6 AMENDMENTS TO SECTION 7: BORROWERS' NEGATIVE COVENANTS.
A. INDEBTEDNESS. Subsection 7.1(ix) of the Credit Agreement is
hereby amended by deleting the reference to "$25,000,000" contained therein and
substituting "$7,500,000" therefor.
B. INVESTMENTS; JOINT VENTURES. Subsection 7.3(vii) of the
Credit Agreement is hereby amended by deleting the reference to "7.7(v)"
contained therein and substituting "7.7(iv)" therefor.
18
C. RESTRICTED JUNIOR PAYMENTS. Subsection 7.5 of the Credit
Agreement is hereby amended by deleting in its entirety clause (i) set forth in
the proviso contained in such subsection 7.5 and substituting the following
therefor:
(i) Company may make payments of regularly scheduled interest
in respect of the Senior Subordinated Notes, in accordance with the
terms of and to the extent required by, and subject to the
subordination provisions contained in, the Senior Subordinated Note
Indenture (PROVIDED that Company may make such regularly scheduled
interest payments only on the scheduled interest payment dates
specified in the Senior Subordinated Notes and Senior Subordinated Note
Indenture and Company may not prepay or otherwise pay in advance any
amounts payable under the Senior Subordinated Notes or the Senior
Subordinated Note Indenture on a date other than the applicable
scheduled payment date specified in the Senior Subordinated Notes or
Senior Subordinated Note Indenture, as the case may be);"
D. MINIMUM FIXED CHARGE RATIO. Subsection 7.6A of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting the
following therefor:
A. MINIMUM FIXED CHARGE RATIO. Company shall not permit the
ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Fixed
Charges for any four-Fiscal Quarter period ending on any of the dates
set forth below to be less than the correlative ratio indicated:
PERIOD MINIMUM FIXED CHARGE RATIO
December 31, 1999 0.75:1.00
March 31, 2000 0.90:1.00
June 30, 2000 0.95:1.00
September 30, 2000 1.05:1.00
December 31, 2000 1.15:1.00
March 31, 2001 1.20:1.00
June 30, 2001 1.25:1.00
September 30, 2001 1.30:1.00
December 31, 2001 1.40:1.00
March 31, 2002 1.50:1.00
June 30, 2002 1.50:1.00
September 30, 2002 1.50:1.00
December 31, 2002 1.50:1.00
and thereafter
19
; PROVIDED that Company shall not be subject to a minimum ratio of (i)
Consolidated Adjusted EBITDA to (ii) Consolidated Fixed Charges for the
four-Fiscal Quarter periods ending on March 31, 1999, June 30, 1999 and
September 30, 1999 only."
E. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Subsection 7.6B of the
Credit Agreement is hereby amended by deleting it in its entirety and
substituting the following therefor:
B. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Company shall not
permit its Consolidated Leverage Ratio for any four-fiscal Quarter
period ending on any of the dates set forth below to exceed the
correlative ratio indicated:
MAXIMUM CONSOLIDATED
PERIOD LEVERAGE RATIO
March 31, 2000 10.00:1.00
June 30, 2000 9.00:1.00
September 30, 2000 8.00:1.00
December 31, 2000 6.75:1.00
March 31, 2001 6.75:1.00
June 30, 2001 6.50:1.00
September 30, 2001 6.00:1.00
December 31, 2001 5.50:1.00
March 31, 2002 5.50:1.00
June 30, 2002 5.50:1.00
September 30, 2002 5.00:1.00
December 31, 2002 4.75:1.00
and thereafter
; PROVIDED that Company shall not be subject to a maximum Consolidated
Leverage Ratio for the four-Fiscal Quarter periods ending on March 31,
1999, June 30, 1999, September 30, 1999 and December 31, 1999 only;
PROVIDED, HOWEVER, that Company shall not permit its Consolidated Total
Debt as of the last day of any Fiscal Quarter ending on any dates set
forth below to exceed the correlative amount indicated:
MAXIMUM CONSOLIDATED
PERIOD TOTAL DEBT
March 31, 1999 $475,000,000
June 30, 1999 $475,000,000
September 30, 1999 $475,000,000
December 31, 1999 $450,000,000"
20
F. MINIMUM CONSOLIDATED ADJUSTED EBITDA. Subsection 7.6C of
the Credit Agreement is hereby amended by deleting it in its entirety and
substituting the following therefor:
C. MINIMUM CONSOLIDATED ADJUSTED EBITDA.
(i) Company shall not permit Consolidated Adjusted
EBITDA for any four-Fiscal Quarter period ending as of the last day of
any Fiscal Quarter ending on any of the dates set forth below to be
less than the correlative amount indicated:
MINIMUM CONSOLIDATED
PERIOD ADJUSTED EBITDA
March 31, 1999 $(5,000,000)
June 30, 1999 $ 7,000,000
September 30, 1999 $20,000,000
December 31, 1999 $38,000,000
March 31, 2000 $45,000,000
June 30, 2000 $50,000,000
September 30, 2000 $55,000,000
December 31, 2000 $63,000,000
March 31, 2001 $64,000,000
June 30, 2001 $66,000,000
September 30, 2001 $69,000,000
December 31, 2001 $73,000,000
March 31, 2002 $74,000,000
June 30, 2002 $75,000,000
September 30, 2002 $76,000,000
December 31, 2002 $78,000,000
and thereafter
; PROVIDED that, for purposes of this subsection 7.6C only, (i) with
respect to the Fiscal Quarter ended on March 31, 1999, Consolidated
Adjusted EBITDA shall be for the immediately preceding one Fiscal
Quarter period; (ii) with respect to the Fiscal Quarter ended on June
30, 1999, Consolidated Adjusted EBITDA shall be for the immediately
preceding two-consecutive Fiscal Quarter period; (iii) with respect to
the Fiscal Quarter ended on September 30, 1999, Consolidated Adjusted
EBITDA shall be for the immediately preceding three-consecutive Fiscal
Quarter period; and (iv) for each subsequent Fiscal Quarter after the
Fiscal Quarter ended on September 30, 1999, Consolidated Adjusted
EBITDA shall be for the immediately preceding four-consecutive Fiscal
Quarter period ending as of the last day of any Fiscal Quarter ending
on any of the dates set forth above.
21
(ii) Company shall not permit Consolidated Adjusted
EBITDA for the eight-consecutive month period ended on August 31, 1999
to be less than $13,500,000; PROVIDED that if (a) Company fails to
comply with this subsection 7.6C(ii) and Administrative Agent, on
behalf of Lenders, delivers to the trustee under the Senior
Subordinated Note Indenture (the "TRUSTEE") a Blockage Notice (as
defined in the Senior Subordinated Note Indenture), such notice to be
delivered in accordance with the terms of the Senior Subordinated Note
Indenture, (b) Administrative Agent and Lenders receive from Company on
or before October 31, 1999 the financial statements required to be
delivered under subsection 6.1(ii) for the Fiscal Quarter ended on
September 30, 1999, (c) such financial statements demonstrate that
Company is in compliance with the provisions of subsection 7.6 for the
period ended on September 30, 1999, and (d) no other Event of Default
or Potential Event of Default shall have occurred and be continuing,
then Administrative Agent, on behalf of Lenders, shall send to the
Trustee no later than November 10, 1999 a notice terminating the
Payment Blockage Period (as defined in the Senior Subordinated Note
Indenture) resulting from the Blockage Notice delivered pursuant to the
immediately preceding proviso."
G. MINIMUM CONSOLIDATED NET WORTH. Subsection 7.6D of the
Credit Agreement is hereby amended by deleting it in its entirety.
H. MINIMUM ASSET COVERAGE. Subsection 7.6E is hereby amended
by deleting subsection 7.6E in its entirety.
I. RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND
ACQUISITIONS. Subsection 7.7 of the Credit Agreement is hereby amended by (1)
deleting in its entirety the reference to "all or any part of its business,
property or fixed assets" in the introductory paragraph of such subsection 7.7
and substituting "all or any part of its business, property or fixed assets
(including without limitation any Accounts or other accounts receivables)"; (2)
deleting clause (iii) of such subsection 7.7 in its entirety; and (3)
renumbering clauses (iv) and (v) as clauses (iii) and (iv) respectively.
J. CONSOLIDATED CAPITAL EXPENDITURES. Subsection 7.8 of the
Credit Agreement is hereby amended by deleting it in its entirety and
substituting the following therefor:
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
No Borrower shall nor shall any Borrower permit any
of its Subsidiaries to make or incur Consolidated Capital Expenditures,
in any Fiscal Year indicated below, in an aggregate amount in excess of
the corresponding amount set forth below opposite such Fiscal Year:
22
MAXIMUM CONSOLIDATED
FISCAL YEAR CAPITAL EXPENDITURES
Fiscal Year 1999 $15,000,000
Fiscal Year 2000 and each
Fiscal Year thereafter $20,000,000
K. DISPOSAL OF SUBSIDIARY STOCK. Subsection 7.11 of the Credit
Agreement is hereby amended by deleting the reference to "7.7(i) and (v)"
contained therein and substituting "7.7(i) and (iv)" therefor.
1.7 AMENDMENTS TO SECTION 8: EVENTS OF DEFAULT.
A. BREACH OF CERTAIN COVENANTS. Subsection 8.3 of the Credit
Agreement is hereby deleted in its entirety and substituting the following
therefor:
8.3 BREACH OF CERTAIN COVENANTS.
Failure of any Borrower to perform or comply with any
term or condition contained in subsection 2.5 or 6.2 or Section 7 of
this Agreement; or failure of Company to deliver at the times specified
in subsection 6.1(ii) the financial statements required under the
proviso set forth in subsection 6.1(ii) or the financial statements for
the Fiscal Quarter ended on September 30, 1999 required under
subsection 6.1(ii); or"
B. FAILURE TO MAKE STONINGTON 1999 EQUITY CONTRIBUTION;
FAILURE TO PERFORM UNDER INVESTMENT AGREEMENT. Section 8 of the Credit Agreement
is hereby amended by (i) deleting the ":" at the end of subsection 8.16
contained therein and substituting "; or" therefor, and (ii) adding immediately
after subsection 8.16 the following as a new subsection 8.17 and new subsection
8.18:
8.17 FAILURE TO MAKE XXXXXXXXXX 0000 EQUITY CONTRIBUTION.
Stonington Equity Sub shall have failed to contribute
to Company the Xxxxxxxxxx 0000 Equity Contribution on or before January
29, 1999; or
8.18 FAILURE TO PERFORM UNDER INVESTMENT AGREEMENT.
Holdings shall have failed to deliver the Notice of
Investment Date and Amount (as defined in the Investment Agreement) to
Stonington Equity Sub within the times specified in the Investment
Agreement or Holdings shall have failed to perform its other
obligations under the Investment Agreement, or Stonington Equity Sub
shall have failed to invest in Holdings, within the times specified in
the Investment Agreement, the full amount of the Investment Amount (as
defined in subsection 6.12(i)) in Cash:"
23
1.8 AMENDMENTS TO EXHIBITS.
A. COMPLIANCE CERTIFICATE. ATTACHMENT I to EXHIBIT VI to the
Credit Agreement is hereby amended by deleting it in its entirety and
substituting therefor a new ATTACHMENT I substantially in form of ANNEX A
annexed hereto.
B. BORROWING BASE CERTIFICATE. The Exhibits to the Credit
Agreement are hereby amended by adding a new EXHIBIT XXVI (Form of Borrowing
Base Certificate) thereto substantially in the form of ANNEX B annexed hereto.
1.9 AMENDMENTS TO SCHEDULES.
The Schedules to the Credit Agreement are hereby amended by
adding a new SCHEDULE 1.1(B) (Contributed Accounts) thereto substantially in the
form of ANNEX C annexed hereto.
1.10 AMENDMENTS TO SECURITY AGREEMENT EXECUTED BY HOLDINGS.
The Security Agreement executed and delivered by Holdings on
the Effective Date (the "HOLDINGS SECURITY AGREEMENT") is hereby amended by
deleting SCHEDULE I annexed thereto in its entirety and substituting therefor a
new SCHEDULE I substantially in the form of ANNEX D annexed hereto.
1.11 AMENDMENTS TO SECURITY AGREEMENT EXECUTED BY COMPANY.
The Security Agreement executed and delivered by Company on
the Effective Date (the "COMPANY SECURITY AGREEMENT") is hereby amended as
follows:
(i) by deleting the reference to "Secured Party"
contained in Section 1(e) of such Company Security Agreement and
substituting "Secured Party or any Lender" therefor; and
(ii) by deleting SCHEDULE I annexed thereto in its
entirety and substituting therefor a new SCHEDULE I substantially in
the form of ANNEX E annexed hereto.
SECTION 2. LIMITED WAIVER.
A. LIMITED WAIVER. Subject to the terms and conditions set
forth herein and in reliance on the representations and warranties of Borrowers
herein contained, Lenders hereby waive compliance with the provisions of
subsections 7.6 and 7.8 of the Credit Agreement to the extent, and only to the
extent, necessary to permit:
24
(i) the ratio of Consolidated Adjusted EBITDA to Consolidated
Fixed Charges for the four-Fiscal Quarter period ending on September
30, 1998 and the four-Fiscal Quarter period ending on December 31, 1998
to be less than the correlative ratios set forth in the table contained
in subsection 7.6A;
(ii) the Consolidated Leverage Ratio for the four-Fiscal
Quarter period ending on September 30, 1998 and the four-Fiscal Quarter
period ending on December 31, 1998 to be higher than the correlative
ratios set forth in the table contained in subsection 7.6B;
(iii) the Consolidated Adjusted EBITDA for the four-Fiscal
Quarter period ending on September 30, 1998 and the four-Fiscal Quarter
period ending on December 31, 1998 to be lower than the correlative
amounts set forth in the table contained in subsection 7.6C;
(iv) the Consolidated Net Worth for the period ending on
September 30, 1998 and the period ending on December 31, 1998 to be
lower than the correlative amounts set forth in the table contained in
subsection 7.6D; and
(v) the Consolidated Capital Expenditures for Fiscal Year 1998
to be higher than the correlative amount set forth in the proviso
contained in subsection 7.8.
B. LIMITATION OF WAIVER. Without limiting the generality of
the provisions of subsection 10.6 of the Credit Agreement, the waiver set forth
above shall be limited precisely as written and relates solely to the
noncompliance by Company with the provisions of subsections 7.6 and 7.8 of the
Credit Agreement in the manner and to the extent described above, and nothing in
this Amendment shall be deemed to:
(a) constitute a waiver of compliance by Borrowers with
respect to (i) subsections 7.6 and 7.8 of the Credit Agreement in any
other instance or (ii) any other term, provision or condition of the
Credit Agreement or any other instrument or agreement referred to
therein (whether in connection with the noncompliance of Borrowers of
the financial covenants described above or otherwise); or
(b) prejudice any right or remedy that Administrative Agent or
any Lender may now have (except to the extent such right or remedy was
based upon existing defaults that will not exist after giving effect to
this Amendment) or may have in the future under or in connection with
the Credit Agreement or any other instrument or agreement referred to
therein.
Except as expressly set forth herein, the terms, provisions
and conditions of the Credit Agreement and the other Loan Documents shall remain
in full force and effect and in all other respects are hereby ratified and
confirmed.
25
SECTION 3. CONDITIONS TO EFFECTIVENESS
Sections 1 and 2 of this Amendment shall become effective only
upon the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "SECOND
AMENDMENT EFFECTIVE DATE"):
A. BORROWER DOCUMENTS. On or before the Second Amendment
Effective Date, each Borrower shall deliver to Lenders (or to Administrative
Agent for Lenders) the following, each, unless otherwise noted, dated the Second
Amendment Effective Date:
1. Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Amendment,
certified as of the Second Amendment Effective Date by its corporate
secretary or an assistant secretary as being in full force and effect
without modification or amendment;
2. Signature and incumbency certificates of their respective
officers executing this Amendment; and
3. Six executed copies of this Amendment.
B. EXECUTION OF AMENDMENT BY REQUISITE LENDERS. On or before
the Second Amendment Effective Date, Requisite Lenders shall have executed and
delivered copies of this Amendment to Administrative Agent.
C. INVESTMENT AGREEMENT. On or before the Second Amendment
Effective Date, Company shall have delivered to Administrative Agent a fully
executed or conformed copy of the Investment Agreement.
D. BORROWING BASE. On or before the Second Amendment Effective
Date, Borrowers shall have delivered to Administrative Agent a Borrowing Base
Certificate, substantially in the form of ANNEX B annexed hereto, prepared as of
a recent date prior to the Second Amendment Effective Date. For purposes of
calculating the Eligible Equipment, Eligible Real Property and Eligible
Intellectual Property for such Borrowing Base Certificate delivered pursuant to
this Section 3D, Borrowers may use the appraised values for Equipment, Real
Property Assets and Intellectual Property as determined in August 1996, which
values are set forth on SCHEDULE I annexed hereto.
E. FEES. On or before the Second Amendment Effective Date,
Company shall pay (x) an amendment fee, for each Lender which executes this
Amendment on or before the Second Amendment Effective Date, equal to each such
Lender's Pro Rata Share of 0.500% of the Revolving Loan Commitments, all such
amendment fees to be paid to Administrative Agent for distribution to the
applicable Lenders, and (y) such other fees payable on or before the Second
Amendment Effective Date.
F. OTHER PROCEEDINGS. On or before the Second Amendment
Effective Date, all corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by Administrative Agent,
acting on behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Administrative Agent and such counsel, and Administrative Agent and
such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent may reasonably request.
26
SECTION 4. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, each Borrower
represents and warrants to each Lender that the following statements are true,
correct and complete:
A. CORPORATE POWER AND AUTHORITY. Each Borrower has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under,
the Credit Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of each Borrower.
C. NO CONFLICT. The execution and delivery by each Borrower of
this Amendment and the performance by each Borrower of the Amended Agreement do
not and will not (i) violate any provision of any law or any governmental rule
or regulation applicable to such Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of such Borrower or any of
its Subsidiaries or any order, judgment or decree of any court or other agency
of government binding on such Borrower or any of its Subsidiaries, (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 such Borrower or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of such Borrower or any of its Subsidiaries
(other than Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of such Borrower or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each
Borrower of this Amendment and the performance by such Borrower of the Amended
Agreement 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.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by each Borrower and are the
legally valid and binding obligations of such Borrower, enforceable against such
Borrower in accordance with their respective terms, except 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.
27
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Amendment Effective 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 they were true,
correct and complete in all material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. Other than the Events of Default waived
pursuant to Section 2 hereof, no event has occurred and is continuing, and no
event will result from the consummation of the transactions contemplated by this
Amendment, in each case that would constitute an Event of Default or a Potential
Event of Default. Neither Holdings nor Company nor any of their respective
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any of its Contractual
Obligations, 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 indirect, of such default or defaults, if any,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Company is a party to certain Guaranties and each Borrower is
a party to certain Collateral Account Agreements, Security Agreements, Pledge
Agreements, Trademark Security Agreements, Patent Security Agreements and
Mortgages pursuant to which such Borrower has created Liens in favor of
Administrative Agent on certain Collateral to secure the Obligations. Holdings
is a party to a Guaranty and certain Security Agreements and Pledge Agreements
pursuant to which Holdings has (i) guarantied the Obligations and (ii) created
Liens in favor of Administrative Agent on certain Collateral to secure its
obligations under the Guaranty. Xxxx Realty, L.L.C., a Delaware limited
liability company ("XXXX REALTY") is a party to a Subsidiary Guaranty pursuant
to which Xxxx Realty has guarantied the Obligations. Each Borrower, Holdings and
Xxxx Realty are collectively referred to herein as the "CREDIT SUPPORT PARTIES",
and all such Guaranties and Collateral Documents referred to above are
collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral encumbered
thereby will continue to guarantee or secure, as the case may be, to the fullest
extent possible the payment and performance of all "Obligations," "Guarantied
Obligations" and "Secured Obligations," as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Obligations," "Guarantied
Obligations" or "Secured Obligations," as the case may be, in respect of the
Obligations of the Borrowers now or hereafter existing under or in respect of
the Amended Agreement.
28
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Second Amendment Effective 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 they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party (other than the Borrowers)
acknowledges and agrees that (i) notwithstanding the conditions to effectiveness
set forth in this Amendment, such Credit Support Party is not required by the
terms of the Credit Agreement or any other Loan Document to consent to the
amendments to the Credit Agreement effected pursuant to this Amendment and (ii)
nothing in the Credit Agreement, this Amendment or any other Loan Document shall
be deemed to require the consent of such Credit Support Party to any future
amendments to the Credit Agreement.
SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(i) On and after the Second Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of any Agent or any Lender under, the Credit Agreement or any
of the other Loan Documents.
29
B. FEES AND EXPENSES. Each Borrower acknowledges that all
costs, fees and expenses as described in subsection 10.2 of the Credit Agreement
incurred by Administrative Agent and its counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of the Borrowers.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.
XXXX GRAPHIC SYSTEMS, INC.,
as a Borrower
By:
Title:
XXXX GRAPHIC SYSTEMS LIMITED,
as a Borrower
By:
Title:
XXXX SYSTEMES GRAPHIQUES NANTES S.A.,
as a Borrower
By:
Title:
XXXX GRAPHIC SYSTEMS JAPAN
CORPORATION, as a Borrower
By:
Title:
GGS HOLDINGS, INC.,
as a Credit Support Party
By:
Title:
XXXX REALTY, L.L.C.,
as a Credit Support Party
By:
Title:
LENDERS:
BANKERS TRUST COMPANY,
as Administrative Agent and as a
Lender
By:
Title:
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent and as a Lender
By:
Title:
By:
Title:
THE BANK OF NOVA SCOTIA,
as a Lender
By:
Title:
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION, as a Lender
By:
Title:
THE BANK OF NEW YORK,
as a Lender
By:
Title:
NATIONSBANK, N.A.,
as a Lender
By:
Title:
CREDIT AGRICOLE INDOSUEZ,
as a Lender
By:
Title:
By:
Title:
DEUTSCHE FINANCIAL SERVICES
CORPORATION, as a Lender and
as an Indemnifying Lender
By:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as a Lender
By:
Title:
THE FUJI BANK, LIMITED,
as a Lender
By:
Title:
XXXXXX TRUST AND SAVINGS BANK,
as a Lender
By:
Title:
THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY, as a Lender and as an
Indemnifying Lender
By:
Title:
LASALLE NATIONAL BANK,
as a Lender
By:
Title:
NATIONAL BANK OF CANADA, A CANADIAN
CHARTERED BANK, as a Lender
By:
Title:
By:
Title:
THE SANWA BANK, LIMITED, CHICAGO
BRANCH, as a Lender
By:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By:
Title:
NATIONAL WESTMINSTER BANK PLC, as a
Lender
By:
Title: Manager
BARCLAYS BANK PLC,
as a Lender
By:
Title:
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES, as a Lender
By:
Title:
By:
Title:
CIBC INC., as a Lender and
as an Indemnifying Lender
By:
Title:
